Interview Partner:
Mark Kontny
President, PDS
Patheon, Inc.
1. Please describe your company and the types of contract services it offers.
Patheon is a contract development and commercial manufacturing company that focuses on the drug product. Our service offerings support early phase development where the client is driving toward proof of concept, through full development, followed by commercial manufacturing. Patheon has full capabilities to support small molecule and biologic drug product development with service offerings ranging from preformulation, formulation, process development and scale-up, analytical method development, clinical trial supply manufacture and stability testing. Patheon develops and manufactures approximately 40 dosage forms, including standard oral solid dose, controlled/sustained release, sterile liquid and lyophilized dosage forms.
2. What has had the greatest impact on pharma contract services in the last 10 years and why?
The increased challenge for pharma Discovery to identify new targets and potential new drugs coupled with the intense pressure on Big Pharma to manage its costs has created new opportunities for many startup and biotech companies to advance compounds into development (through venture capital funding) with a target toward out-licensing to Big Pharma. With limited funding in the smaller companies and their primary focus on biology and clinical testing, the opportunity has been created for CMCbased drug product development firms to offer broad-based ‘solutions’ to characterize and develop the full range of services necessary to bring a potential drug into the clinic and on to commercialization. Furthermore, the improved scientific understanding of the key factors that lead to drug attrition and the wide dissemination in this Age of Information have culminated in product development service companies like Patheon being able to deliver the quality of drug product development previously only found in large pharma.
3. In your particular niche of contract services, what do you view as the biggest challenge and how is this challenge being overcome?
The greatest challenge remains being able to provide the optimal solution for the specific drug being developed. Each drug has unique physical, chemical, biologic and pharmacokinetic properties, and while multiple solutions may be possible, it is critical to be able to provide the client with the best solution for their drug that delivers a dosage form that is stable, manufacturable, and exerts its intended effects in patients. With time pressure to move quickly while managing costs, it is imperative to manage product development risks by conducting the appropriate experimental studies at the right time in development. Reformulation can be costly in expense and timing and needs to be avoided through well conceived development programs that link the technology development to the clinical studies and through the regulatory process. We minimize this through hiring exceptionally talented scientists and project managers that can characterize the drug and drug product at hand and work with the client to meet their timelines.
4. How has this challenge affected the market for your contract service?
This challenge has markedly increased the market for our services. As many smaller firms are not able to provide the full range of necessary services that cover the entire development process from early development right through
to commercialization, our customers enjoy the advantages of seamless scale-up right into commercial manufacturing that Patheon provides.
5. What has changed in terms of the services that pharma expects fromcontract providers over the years and how do you see this evolving in the future? What are the new pharma demands on contract providers in your niche?
Pharma expectations have evolved to demand that a service provider has the full range of capabilities to completely bring a drug product through the development process. In years past, niche providers were often sought for a particular expertise or service offering. Today, where more programs are completely outsourced, missing key elements in the development process (e.g., characterization, analytical, formulation, process development/scale-up) can be detrimental to bringing a drug through the clinical, regulatory and manufacturing hurdles in the fastest time possible. Pharma will continue to expect development of a full understanding of their drug product without delays and at fair prices. Pharma will also seek out those firms that are fee-for-service based and do not expect downstream royalties from their product revenues as well.
6. How have contract service companies had to redefine themselves to meet the needs of the pharma industry?
Many firms have had to move away from being developers of drug delivery technologies to being broad-based service providers. Coincident with this, they have had to broaden the range of services they offer. Pharma expects the optimal solution for their drug, the capability to conduct the appropriate work at all scales of development and manufacturing and a service mentality that can adapt to the changes that routinely occur in drug development programs.
7. What events have you seen plague the contract service market and how will these events affect the future of contract services?
The ever-increasing number of contract developers in North America, Europe, India and China has resulted in a very cost-competitive market. As new firms enter and attempt to establish themselves, they often choose to compete based on cost. When minimizing expense results in cutting corners around quality and lack of understanding of the technology, development programs can be impacted with delays and additional costs that no company can afford. Working at little to no margin also is not sustainable for any company, and the end result in these cases also has a
negative impact to the client and their drug development program. While this business behavior will be difficult to curtail completely, I see those service providers with excellent financial health, robust quality systems, and the scientific/experienced staff that can handle an array of development challenges as the desired partner of choice for the long term.