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24 Pharmaceutical Technology Europe BIO/PHARMA OUTSOURCING INNOVATION eBOOK 2022 P h a r mTe c h . c o m "Hence, specialized providers, such as ten23 health, may pro- vide significant advantages for [such companies], contributing to faster development timelines whilst minimizing and derisk- ing any R&D obstacles that can be anticipated by the Experts," Mahler states. "Finally, even in existence of internal assets and internal experts, there may be insufficient capacity in house." Focusing somewhat on internal capacities and the fact that the outside economic environment is encouraging. Ramesh Subramanian, chief commercial officer, Aragen, believes it is a buoyant time for R&D outsourcing at the moment. He spec- ifies that this buoyancy can be attributed primarily to three reasons, "increased fund flowing into [the R&D outsourcing] space, a high number of targets in the pipeline, and renewed interest in pharma R&D due to the COVID-19 pandemic." "In fact, as a direct consequence of this better funding environment, we are seeing increasing number of biotechs pursuing their research programs with renewed vigour," Subramanian adds. "In the past, those companies that were quite conser vative in advancing t heir discover y programmes are now focusing on advancing their assets quickly through the development continuum to reach the proof-of-concept milestone. With this shift, we see more biotechs approaching us for more end-to-end integrated solution offerings, from discovery through to Phase IIb— where their assets get them better valuations. Venture cap- italists are also open to a longer-term view on development and willing to take risks for such potential upsides from valuation of successful programmes. For Big Pharma, out- sourcing of all but core activity is the de rigour approach to achieve fastest development timelines." Sy Pretorius, MD, president, Clinical Development, and chief medical officer at Parexel, points to the need to focus on and build a lasting relationship when partnering. "To meet complex industry challenges, successful outsourcing partnerships are essential," he asserts. "This is necessitated by increasing pressures to reduce the cost of drug develop- ment and to bring therapies to market sooner. Rather than purely transactional in nature, these partnerships should be truly collaborative. Strong relationships can foster innova- tion beyond contractual obligations and typically leads to higher levels of staff engagement and better quality. The rea- son for continued demand for outsourced services can be at- tributed to a variety of factors including a burgeoning drug pipeline, record levels of funding, lack of in-house resources or expertise, and increased operational complexities." Many different shades "Outsourcing happens in many different shades," notes Mahler. "Outsourcing can include full technical programmes including drug substance and drug product, it can include only specific studies. It could be only for early-stages of a pro- gramme or the opposite, just for the commercialization stage. In the end, the outsourcing model needs to fit to the needs of the pharma and biotech company, their own expertise and knowledge base and their preference on either working with the most qualified outsourcing partners for specific studies, versus the preference on working with just one partner." Subramanian ref lects that the focus of Big Pharma has now shifted to ensure they can retain their core activities in-house. "[Big Pharma's] definition of core has become a lot smaller as they look to CDMOs to be their R&D engines. We are seeing these emerging trends in R&D outsourcing," he says. "Pharma/biotechs are looking for more integrated discovery service offerings to leverage on the efficiencies and synergies of chemistry and biology offerings from one service provider/co-location of these capabilities. In the outsourcing of development services, pharma/biotech com- panies still prefer to have the final drug substance being manufactured closer to their locations in the United States/ European Union. Given the greater demand for access to capacities, a large number of these biotechs leverage the ca- pacities/expertise available in Asia to execute the initial steps and the final steps in US/EU." The range of relationships is large, encompassing full-ser- vice outsourcing (FSO) to functional provider (FSP) type ar- rangements, Pretorius states. "Likewise, these [relationships] range from tactical/per study outsourcing to more strategic programmatic outsourcing," he notes. "Landing on the right outsourcing model requires an assessment of each individual organization's needs. Functional service provision contin- ues to be a core outsourcing model allowing the vendor to provide embedded teams that support sponsors for specific services and work directly with their client's systems and infrastructure. In other instances, a hybrid, more limited scope might work best". COVID-19 impact Pretorius observes that the pandemic forced industry to re- examine how research studies are designed and conducted, while also demanding record-breaking speed of innovation. "As a result, digital medicine was embraced in ways never seen previously. Decentralized clinical trials (DCTs) became embedded in the overall clinical development ecosystem and part of the new norm in how we operate," he empha- sizes. "At Parexel, DCTs are now being woven into 80% of Phase II/III trials and 100% of real-world evidence new trial proposals include DCT elements." However, Pretorius cautions this movement is not with- out obstacle. "A challenge is the lack of industry-wide data standards and how best to manage more and more data from disparate and diverse sources across multiple platforms while ensuring quality," he says. Mahler adds that downstream manufacturing and the supply chain were af fected by the pandemic. "The sig- Decisions often boil down to embracing instead of eschewing risk... Development