JPM2024: Manufacturing outlook for transformative technologies

The annual J.P. Morgan Healthcare Conference (JPM) provides a unique opportunity to make connections among life sciences and health care emerging companies, pharma/biotech companies, investors, and advisors. This is an article in our “Life Sciences Transactional Insights” series, which aims to provide key practical takeaways for our transactional colleagues by anticipating the needs of their regulatory, intellectual property, and business stakeholders.

Cell, tissue, and gene therapies (CTGT) have for years offered the potential for truly personalized medicine for many near-incurable disease indications. In addition, radiopharmaceuticals and custom medical device deliverables have recently shown to have great promise for patients but leave little margin for error due to the time-sensitive nature of their manufacture and delivery. There continues to be keen interest in these technologies despite the steep costs and logistical challenges of product development, launch, and manufacturing. These processes raise a number of challenges with respect to the manufacturing and partnering relationships required to develop specialized therapies, as well as ensuring safety in this unique point of service supply chain, which requires an integrated approach to distribution and manufacturing.

Advanced manufacturing methods are providing new opportunities for producing therapeutics, including CTGTs, radiopharmaceuticals, and medical devices

Over the past decade, industry has been developing and applying advanced manufacturing methods to technologies when and where they make sense, or in some cases, where they are the only way to bring certain therapies to market. Regulators across the globe are adopting and embracing advanced manufacturing models for CTGTs, radiopharmaceuticals, medical devices and other technologies, thereby recognizing the potential they hold to delivering transformative therapies to patients, address quality issues and reduce the potential for shortages/delay. For example, the U.S. Food and Drug Administration (FDA) has created an Advanced Manufacturing Program, designed to increase FDA’s knowledge base of lessons learned, regulatory science, and cross-industry best practices that can be leveraged for FDA-regulated products, especially in the areas of medical countermeasures and supply chain resilience for drugs, biologics and medical devices. 

The UK Government is also focusing on building a specialism in advanced manufacturing, extending to a capital investment/allowance program which is among the most generous in the Organization for Economic Co-operation and Development (OECD) and setting a goal for the UK to have the highest level of R&D investment as a proportion of gross domestic product in the Group of Seven (G7). This has spawned an increase in start-ups and significant investment opportunities. It also was the first country to propose a tailored framework for the regulation of innovative products manufactured at the point where a patient receives care to ensure there are no regulatory barriers to innovative manufacturing and that products made via such routes have the same assurances of safety, quality, and effectiveness as those for conventional medicinal products. A draft framework has been published.

Manufacturing relationships underlying transformative technologies

The manufacture and supply of CTGT increasingly involves multiple players, including those involved in harvesting donor cells or tissue, isolating cells of interest, activating or otherwise reprogramming the cells to express one or more desired cell products, transporting the desired product to a patient care site, and finally, and administering the therapy to the same (autologous) or another (allogenic) patient. The same can be said for custom medical devices where patient specific devices need to be designed, developed and manufactured for a specific patient’s needs. Somewhat analogously, radiotherapeutics, and similar point of service deliveries are themselves bespoke patient therapeutics but have the increased challenge in that the active ingredients have very limited time windows between creation/activation and delivery. Manufacturers again face tough choices on how much of the delivery process can be centralized or brought in-house, often at a very high cost, versus partnering with a specialist, which may increase logistical hurdles. Additionally the potential geographical footprint of the manufacturing/delivery system requires careful analysis where robust access to radioisotope supply, GMP capacity and a distribution/logistics system that meets local nuclear legislative requirements (as to safe transport and waste disposal) is essential.

In all three scenarios, manufacturers seek to compress the timeline from production to patient delivery. It is with these goals and challenges in mind that new methods for advanced manufacturing provide the greatest promise and for which regulators are embracing the adoption of processes that would have been inconceivable even 10 years ago.

Increasingly, many of these steps are carried out by one or more specialty contract manufacturing or contract development and manufacturing organizations (CMO/CDMO) and creating or utilizing distribution and treatment centers in close proximity to large patient populations (e.g., near major hospital systems), raising important considerations in the contractual terms governing relationships between the “legal” product manufacturer and these partners.

Additionally, these processes and relationships can raise tricky contractual issues, resulting in greater complexity in core license terms and potentially greater challenges in diligencing investment opportunities. The end result is greater scrutiny and intense negotiations around:

  • What is being licensed;
  • What are the potential costs associated with manufacturing, distribution, and possible commercial scaleup;
  • What is the available manufacturing and distribution capacity and geographical footprint and what impact will this have on the relationship with the contracted partner;
  • How comfortable are the regulators with new methods for manufacturing and distribution in all applicable jurisdictions;
  • What impact possible regulatory delays (including product approvals and/or facilities inspections) may have on manufacturing and distribution capabilities;
  • How to balance centralized versus decentralized delivery models; and
  • How best to partner with administering health care providers (HCPs) who ultimately have access to patients.

Overall, there is simply not enough manufacturing and distribution capabilities to meet product demand and the very nature of the products themselves limit the options that are available. Capacity, materials shortfalls, and delivery logistics continue to impact the bottom line for partners across the supply chain. Ultimately, planning for every eventuality and building controls and contingencies for every step are the key to successfully being able to deliver the therapies to patients. Early consideration at the development/clinical stage of an agile and efficient framework for commercial manufacturing/ logistics arrangements is advisable or a trigger to negotiate an early exit on satisfactory terms if a suitable outcome ceases to be achievable.

Blockchain applications for supply chain integrity

Moreover, as complex point of service therapies become more prevalent, “vein-to-vein” or “dose-to-delivery” supply chain integrity will be of paramount importance. There is an increasing recognition that blockchain could help to resolve many of the most significant challenges facing complex manufacturing supply chains. For example, blockchain offers the ability to store and transmit data in a decentralized and real-time manner and therefore could help resolve many challenges due to its inherent characteristics of: (i) consensus; (ii) provenance and immutability; (iii) finality; (iv) security and reliability; and (v) decentralization. Blockchain transactions are secure, authenticated and verifiable. This is relevant because:

  • Transformative therapies are often time and environmentally sensitive

Blockchain combined with other technologies can be used to verify temperature, geolocation, or other variables such as radioactivity, and provide real time updates to prepare for scheduling and resource allocation while ensuring compliance throughout the chain.

  • Transformative therapies are subject to complex regulatory requirements and oversight

Regulation of CTGTs, radiotherapeutics, and custom medical devices involve separate regulatory bodies governing different aspects of the entire supply chain; e.g., from donated cell or tissue, generated nuclear medicine, production of devices that are customized to a specific patient’s needs through to the resultant therapy. Integrating blockchain into the point of service supply chain could save time and expense by enabling regulators to: (i) access the blockchain platform; (ii) track products and coordinate with stakeholders in real time through the blockchain network; (iii) assess compliance via publication of zero-knowledge proofs; and (iv) have access to a permanent and immutable regulatory audit trail in the form of the blockchain ledger itself.

  • There are many players within transformative therapy supply chains

The lack of coordination and openness of data encountered when using existing technologies could be addressed through implementation of a blockchain network.

Key considerations when implementing a point of service supply chain blockchain network will include how to: (i) decide how the network will be operated, and by whom; (ii) form contracts between stakeholders including CMO/CDMOs; (iii) demonstrate regulatory compliance; and (iv) ensure security and privacy of data.

Next steps

It may seem daunting, but stakeholders need to recognize the importance of their manufacturing and distribution logistics – including CMO/CDMO relationships and supply chain integrity – at an early stage in their product development timelines in order to minimize potential disruptions in their commercialization goals. In addition, global stakeholders should stay apprised of regional developments that may impact their decisions on where to manufacture, conduct clinical trials, and/or generate other regulatory data, as we have also discussed here.

We routinely advise on supply chain and other complex transactional matters across the life sciences and health care sector. Please contact the authors or the Hogan Lovells attorneys with whom you regularly work for guidance on your specific product needs.

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Authored by Penny Powell, Jodi Scott, and Andrew Strong.


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