Why You Shouldn’t Rely On One Raw Materials Partner, But Most Developers Still Do
Raw materials are an increasing area of attention for advanced therapy developers, particularly as therapies hurtle towards commercialisation and face the accompanying scale-up requirements.
As a centre of translational excellence in the UK, the CGT Catapult is progressing a portfolio of projects with the UK and international communities. The UK preclinical research database is a valuable tool for tracking cell and gene therapy trends and enables us to plan activities appropriately and identify needs for the sector going forward. The purpose of the database is to be a tool for academics, commercial organisations and investors operating in the cell and gene therapy space and to demonstrate the rich science base in the UK. It also provides an indication of the likely future directions of cell, gene and other advanced therapies.
A large volume of data projects was collected across a wide range of therapeutic agents and disease areas. The technology readiness level of the projects captured varies from early-stage research to projects in which clinical trials are expected to be undertaken in the coming years.
However, the availability and quality of raw materials are a potential bottleneck in the commercialisation game and can ‘make or break’ the success of a therapy. In particular, single sources of raw materials, where one company is the only supplier of a particular component, pose a significant risk to developers. A delay in the supply or an unexpected quality issue could leave a therapy’s entire supply chain vulnerable.
Adding more complexity to this challenge is the high variation found in the scale of raw materials suppliers. This can range from small, two-person operations to huge, global corporations. Both ends of the spectrum have risks, from insufficient capacity to lack of transparency and restrictions on due diligence requests.
Much of our industry relies on one partner for their raw and ancillary materials so we set out to find out how developers and CMOs can take a strategic approach to better manage the supply of raw materials and protect their supply chain. We teamed up with the experts at CellGenix and developed a survey with over 30 cell and gene therapy professionals to find out what the prominent challenges are with regards to raw materials and how the industry is approaching automation of raw materials processes. This article will present the results as well as some perspectives from bluebird bio, Cellex Cell Professionals and others.
The results are presented in this printable infographic.
Raw materials challenges
The survey showcased some interesting trends as to how the industry is approaching the automation of raw materials and how it’s dealing with overarching raw materials challenges.
As a benchmark, the majority of the industry are, or intend to automate:
- 37% are already automating all or part of their raw materials processes
- 47% plan to automate within five years
- only 16% said they do not plan to automate
Closed system connectivity and global standardisation came top of the list of characteristics that would enable automation of raw materials processes at 65% and 47%, respectively.
You can see the full results here
We decided to explore one of the questions further; what are your biggest raw material challenges? The image below shows the industry’s response.
61% of respondents said their biggest challenge is often the lack of a GMP grade being available
Dependence on a sole raw material supplier
The survey results show that the biggest raw materials challenge facing the cell and gene therapy industry is the lack of GMP grade materials available at 61%; an alarming statistic that has the potential to curb the growth of the industry and development of crucial treatments. Coming in at second place is ‘dependence on sole supplier’, which comes with a complex variety of risks and limitations.
We decided to dig deeper into this question and took the top four answers from the initial survey and put it to a wider LinkedIn poll. Phacilitate’s LinkedIn community deemed ‘dependence on a sole supplier’ to be the biggest challenge they faced. The question is…’why?’.
A LinkedIn poll presented slightly different results with ‘Dependence on a sole supplier’ being the greatest challenge.
Relying on one supplier for a particular raw material is a classic case of ‘putting all your eggs in one basket’, which could have some benefits, perhaps economies of scale or developing a more effective partnership with one supplier rather than having many relationships to manage. However, if this is one of the biggest headaches for cell and gene therapy manufacturers, what are the knock-on effects and, crucially, how can it be solved?
We went beyond the statistics and spoke directly to some of the leaders in our industry who took part in the poll and cited being dependent on a sole supplier as their biggest challenge, in order to get to the bottom of what is happening across the industry
Kai Schormann, Supply Chain Manager, Cellex Cell Professionals put the situation into context, stating that “compared to the other challenges, it seems that the question about sourcing strategies has taken a back seat. However, with cell and gene therapy’s fast-approaching, stellar magnitude and the global demand for scalability, the limitations of single sourcing get clearer and clearer. As we are talking about critical raw materials and very sensitive materials that are maybe listed as prescription drugs themselves or have short shelf lives and/or specific storage conditions, a change in the material specification might lead to an impactful and ‘unpleasant’ change process.”
Taking the bigger picture of commercialisation, scale-up needs and the overall maturity and growth of this industry, it’s clear to see how the challenge of having one critical materials supplier is now at the forefront and is keeping manufacturing and supply chain leaders awake at night.
It’s important to explore these risks and limitations further to be able to pinpoint hotspots of risk and vulnerability in the supply chain, with a view to mitigating those risks and strengthening the overall supply chain.
David Karakas, Head of Global Procurement and Sourcing (GPS), bluebird bio gave us his perspective on this, commenting that “the single most important reason to avoid reliance on a single supplier lies in our ability to deliver our therapies to patients. Currently, the DPAS (Defense Priorities and Allocation System) has permitted those organisations making vitally important vaccines to be first in the queue for any and all inventory from suppliers. While prioritising response to the pandemic is vital and understandable, it can have a negative impact on our ability to gain access to necessary raw materials in a timely fashion so working with more than one supplier can potentially speed the delivery process.
The second is price gouging – this isn’t the case with all suppliers but unfortunately, we see it and relying on a single source can have an impact on budget vs a more competitive situation where we can seek best price from more than one supplier.”
Hisham Kamoun, formerly a bioprocess research associate at PBS has similar experience with competition from the mass production of the coronavirus vaccine, telling us that “we’ve faced unique challenges this year with Covid-19 and there were, of course, a lot of delays and back orders for several key materials that we needed.
As there are only a few distributors out there it can create many challenges. For example, this year one supplier decided to change the location of their manufacturing site and that caused multiple delays for us. On top of that I couldn’t find any distributors having the item that I needed.
In this instance, it would have been helpful if the manufacturer had taken the initiative to contact their customers and let them know ahead of time that would be happening so we could adjust our big experiments accordingly.”
Covid-19, high prices due to lack of competition, impact on patients, unexpected changes in circumstance of supplier are all identified as potential pain points in the supply of raw materials. These comments present a mix of long and short-term factors, the newest of which is the development of a vaccine in response to the coronavirus pandemic, which, although unforeseen, could now present as a long-term challenge for cell and gene therapy developers. As more and more is discovered about the behaviour of the virus, immune responses and the effect of vaccines on longer-term immunity, it is transpiring that regular vaccinations of the population may be required. As such, the capacity for supply of raw materials for these vaccines may compete with the needs of cell and gene therapy production for years to come, depending on how quickly raw material suppliers can scale up their operations and meet demand.
Lance Holland, Associate Director, External Vector Manufacturing, bluebird bio goes on to explain more about the implications of being restricted to a sole source of raw materials, i.e. the impact on production, along with some all-important thoughts on solutions to mitigate this risk.
“The simple reason why you don’t want to rely on a single source for anything (vendor, material, etc.) is the risky position it puts you in. A major issue can stop or significantly delay production and we never want to be in that position because that means we are not able to deliver to our patients in need. With single sourcing you expose yourself to risks due to quality issues with the material itself, supply constraint issues the raw materials partner may face for materials they rely on, quality issues from any vendors the raw material partner relies on, etc.
Other factors may not stop production, but can cause significant delays to the schedule and timelines. These challenges are varied, for example, quality, supply constraints, anything along the supply chain of the material, etc.
My thoughts on potential solutions for developers and raw material partners are as follows: developers need to perform risk analysis on their highest risk raw materials and, at a minimum, need to prioritise dual sourcing for their highest risk items wherever possible. Raw materials partners need to also do risk analysis on their highest risk items that would impact their ability to supply their raw materials and act accordingly. If they are utilising vendors as part of their manufacturing of raw materials, they should also prioritise dual sourcing of their own for their highest risk items wherever possible. The more they can mitigate their risks the better off they are (and then we are as a result).”
Reliance on one raw materials supplier is clearly a significant issue that can ultimately halt production, but how can this be overcome? In a nutshell, a more strategic approach to the raw materials supply chain is needed, this strategy can be broken down roughly into two elements; a) risk management and b) relationship with your supplier(s).
At the top of the list is identifying and qualifying a second supplier. While this may sound obvious, it is not always as straightforward as it seems. Bernd Leistler, Vice President Production at CellGenix’s advice is that “cell and gene therapy developers should have a second source available whenever possible, although this is not viable for customised products.
We also advise to think ahead in terms of quality. The quality of a raw material in use may be sufficient for early clinical trials, but you need to plan in terms of the quality needs for a licensed medical product and whether your supplier is prepared for that. You should also think about supply security and your needs a few years ahead. My recommendation would be to exchange rolling forecasts with your supplier on a regular basis.”
Regardless of how many suppliers you do have, developing an effective, working partnership rather than just a transactional relationship is the goal. Transparency, communication and exchanging forecasting information with your raw materials supplier are essential for de-risking your supply chain. It can be difficult to predict the required volumes of certain raw materials well in advance and, as such, there is often flux in the volumes requested by cell and gene therapy developer. Sharing this kind of information regularly and opening up communication will ensure the right supply at the right times.
Communication and transparency need to be a two-way street for the partnership to be a successful one. Developers should ask suppliers to mitigate risk further up the supply chain. Do you know what risk analysis your raw materials suppliers are performing on their supply chain?
Finally, it is a must to set up supply chain agreements at the start of your relationship with your supplier. As Bernd has mentioned, the selection of correct supplies that are of sufficient quality, i.e. GMP grade in order to futureproof your supply will prevent the need to switch at a later date causing delays and problems with sourcing new raw materials.
The supply chains for advanced therapies are complex and a one-size fits all answer is not possible. How will you apply this to protect your supply chain?