What, in your opinion, is currently the single largest trend with respect to high potency APIs?
The single largest trend impacting all APIs, high potent or not, is the return of business from Asia and other newly developed regions to the traditional pharmaceutical manufacturing regions of the world due to increased concerns about quality and a growing appreciation of the importance of the quality systems and culture that have been established in Japan, North America and Western Europe. As a representative of a North American contract research and manufacturing organization, I can cite numerous examples in the past two years where clients communicated that a piece of work being offered to us was being brought back from an Asian competitor or that the Request for Proposal we were being asked to bid on was only being offered to North American or Western European CMOs.
Is there a country or region of the world that is currently increasing their expertise and market share in high potency APIs?
Because containment technology is expensive and technology driven, the bulk of the growth activity I observe is associated with the traditionally strong regions of the world such as Japan, North America and Western Europe. Other regions may show a mathematical increase in market share but only because those regions are starting from a smaller base.
Where do you see the market for HPAPIs in 5 -10 years?
The growth rate will slow compared to what is being enjoyed today but the growth rate will still be better than what the overall pharmaceutical market experiences. Growth will probably be highest in the area of antibody drug conjugates and in traditional small molecule oncology drugs that offer more specific targeting, improved bioavailability, or some other advantage compared to what is available at present.
Can you talk about strategic partnering in relation to producing high potency APIs?
From my perspective representing a full service contract research and manufacturing organization, it is critically important to have a shared vision with clients who are strategic partners in regards to the management of high potency APIs through all stages of development. Strategic partners are those clients that engage us to research and manufacture high potency APIs over numerous years and involving numerous compounds. To provide prompt and cost efficient service to our strategic partners, mutual agreement on what constitutes adequate handling of high potency APIs at each development stage is essential. Ideally, this mutual understanding is achieved during the earliest assessment phases of the relationship. It costs both partners in the relationship time and money if the basic parameters of handling high potency APIs are reconsidered every time a new compound is introduced or a new project team is assembled.
What are the market challenges to working with high potency APIs?
From the perspective of a contract researcher and manufacturer who specializes in high potent APIs, the market challenge lies in the fact that past success and a higher than industry average growth rate for high potent APIs has led to an increased number of competitors and the construction of an increased amount of high potent API capacity. Some of this construction appears to have been ill advised and the companies involved have had difficulty in filling the equipment. A competitor with an empty facility to fill can be a formidable one. Much of the competition in the high potency API contract service market is first rate at handling high potent APIs. Unfortunately, some other competitors were drawn to offering high potent API services by the growth rate or the perception of higher prices without fully understanding what high potent API handling entailed. These latter competitors may lack the facilities, the expertise and the culture to be working with high potent APIs but such competitors can be a source of unrealistically low pricing for contract services. Therefore, the market challenges are two-fold 1) winning business in competitive environment with other certified first rate high potency API service providers, and 2) ensuring that potential clients have a clear understanding of what high potent API handling should entail at the various stages of development. It costs money to handle high potent APIs properly. An educated client is unlikely to choose a competitor solely on the basis of low cost.
Any additional or closing thoughts on this topic?
A significant trend with respect to APIs in general, high potent or not, is the ongoing transition in the operating model of large pharmaceutical companies. Many more activities are outsourced to contract researchers, contract manufacturers and other contract service providers than was done in the past. The large pharmaceutical companies have become more risk averse than in the past and are licensing new products from startups at a later stage in clinical development. Issues concerning high potency APIs are just one aspect of these significant industry wide changes. As a provider of contract research and manufacturing services, this outsourcing trend from large pharmaceutical companies is clearly beneficial. On the other hand, the reluctance of large pharmaceutical companies to acquire or make other financial arrangements with entrepreneurial startups until a new drug is in the late stages of development has created significant challenges. Venture capital funded innovators struggle to advance their products through more clinical stages than was the earlier norm. High potent APIs require additional time and cost, compounding the difficulty for these companies. A significant component of the traditional customer base for a high potent API contract service provider consists of the venture capital funded small innovator who needs our capabilities to bring their drug to a certain level of development and is reliant on a larger pharmaceutical company to commercialize the drug candidate. Such companies are being asked to fund their drug candidate to a later stage of development at a time when the availability of capital is constrained. The result is uneven progress of drug candidates while funding is acquired or the disappearance of drug candidates that would have advanced in an earlier period. This traditional model for new drug development is under considerable stress at present.
This article was printed in the September/October 2012 issue of Pharmaceutical Outsourcing, Volume 13, Issue 5. Copyright rests with the publisher. For more information about Pharmaceutical Outsourcing and to read similar articles, visit www.pharmoutsourcing.com and subscribe for free.