Biologics

Market Trends

2020 proved to be a significant financial year for the biopharmaceutical market, with worldwide sales at USD 284 billion and expected to grow at 10% CAGR over the next five years to reach USD 461 billion in 2025 1.

The growth in biopharmaceutical sales and pipeline drive the overall need for biologics clinical development and manufacturing services across the whole spectrum from pre-clinical services to commercial manufacturing. Simultaneously, the product landscape is changing rapidly and is becoming more challenging from a regulatory perspective with increased pressure for speed to market, alongside accelerated development pathways and timelines.

Overall, there are more than 3,500 recombinant proteins and antibodies in pre-clinical and clinical trials and launched treatment 2. A growing number of molecules in the pipeline are being developed by small and virtual biotech companies. Those do not normally have the in-house manufacturing capacity and expertise to bring their candidates to market and therefore have a higher propensity to outsource. Currently, these emerging biopharma companies constitute approximately 80% of the development pipeline 3

Strong venture capital (VC) funding for biotechs has supported this healthy growth in development 4 and has had a positive impact on outsourcing to contract manufacturers like Lonza. Biotech companies are outsourcing more than 70% of their development and manufacturing service needs to external partners. Among smaller biotechs, this number reaches between 90 and 100%, as secured funding is used for developing therapies in preference to building in-house manufacturing for clinical stage trials 5.

Biotech companies with a strong manufacturing partner can receive improved funding, setting up a positive feedback loop. VC funds have also begun to establish their own virtual biotech companies. Such virtual companies have a lean team of managers, meaning close partnerships with manufacturing companies such as contract development and manufacturing organizations (CDMOs) are critical to deliver successfully outsourced projects. Additionally, there is a burgeoning ecosystem of smaller pharma companies in China, supported by strong access to funding and bolstered by expectations of biologics growth.

Within biologics, mammalian remains the preferred production technology within the industry 5 and has the highest growth potential due to pipeline increase and improvements in technology 6,7. These drive the need for new molecule design, manufacturing technologies and process improvement capabilities for biologics. The pipeline of molecules in development and launched drugs will drive the demand for mammalian manufacturing capacity in an already tight market 8. While there has been a sustained need for large-scale manufacturing capacity, there is a trend towards small-scale bioreactors and single-use technologies for newer therapies, which are largely focused on smaller patient subgroups 9. Additionally, growth in China, biosimilars, COVID-19 related projects, innovation and potentially the launch of new therapies for large patient populations with unmet needs may further increase demand 9,16. Today’s total estimated installed capacity in the industry (5.8 million liters) will increase to more than 7.7 million liters by 2024 10.

The microbial segment is an attractive additional technology to mammalian and provides further possibilities for biopharma companies who have molecules with both technologies. In contrast to mammalian, microbial manufacturing capacity is expected to expand comparatively moderate, despite the attractiveness and growth potential of the segment 11. More than three-quarters of the biotherapeutics development pipeline are from emerging biopharma companies with an increasing number of complex molecules produced in microbial expression systems 12.

Bioconjugates are a growing class of biopharmaceuticals with antibody drug conjugates (ADCs) molecules being the biggest segment, representing 40% of the bioconjugate molecules pipeline. In 2020, two new ADCs were approved, leading to a total of nine commercialized drugs. There are moderate facility and capacity expansions required. The innovation pipeline is solid, with more than 240 ADCs currently under development across various clinical stages in around 550 trials. Due to rising demand and further expected approvals, there is a consistent trend for outsourcing of ADC manufacturing 13.

The market for biologics is growing in all segments, including drug product services. The large and growing pipeline, and the fact that biologics must be delivered parenterally 14 when systemic exposure is needed for treatment, is driving the growing need for drug product services. Vials currently dominate, but alternative delivery technologies are increasing 15 for commercial target product profiles, especially for indications where self-administration by the patient is beneficial.

Due to accelerating timelines for market readiness, increased competition and market opportunities, biotech companies are looking at flexible and integrated solutions that correspond to their development, clinical and commercial needs. Innovative business models, new modalities and strong partnerships play a critical role in accelerating the clinical development process and speeding up patients’ access to essential drugs.

  1. Source: EvaluatePharma® World Preview (2020), Outlook to 2026

  2. Source: Citeline® Pharmaprojects™ Database (rec. protein & antibody)

  3. Source: IQVIA® 2019 “Emerging Biopharma’s Contribution to Innovation”

  4. Source CB Insights & Biotechgate (2020)

  5. Source: HighTech Business Decisions (HTBD) Report: Biopharmaceutical Contract Manufacturing (2020)

  6. Source: Roots Analysis Research report Biopharma contract Manufacturing Market (3rd Edition) (2019)

  7. Source: Informa Citeline® Pharmaprojects® database (2020)

  8. Source: UBS “Biologics Manufacturing” (2020)

  9. Sources: BDO/BPTC bioTRAK® Report Mammalian Supply (2020); UBS “Biologics Manufacturing” (2019)

  10. Source: Internal Analysis

  11. Source: BDO/BPTC bioTRACK® database (2020) Mammalian though 2024 & Microbial through (2022)

  12. IQVIA® Report: Emerging Biopharma’s Contribution to Innovation (2019), Informa Citeline® Pharmaprojects™ Database (2020)

  13. Sources: Roots Analysis Report: ADC Contract Manufacturing Market, 4th Edition (2020), Roots Analysis Report: Antibody Drug Conjugates Market,5th Edition (2019), Informa Citeline® Pharmaprojects™ Database (2020)

  14. Source: Citeline Pharmaprojects Database (2020); HighTech Business Decisions (HTBD) Report: Biopharmaceutical Contract Fill-and-Finish: Best Practices Study (2018)

  15. Source: HighTech Business Decisions (HTBD) Report: Biopharmaceutical Contract Fill-and-Finish: Best Practices Study (2018)

  16. Informa Citeline® Pharmaprojects® database (2020)

Our Offerings

We are a leading contract development and manufacturing partner for biopharmaceuticals, serving our customers for all clinical and commercial manufacturing needs throughout the product lifecycle. We work in partnership with customers of all sizes, from start-ups to large biotechs and major pharmaceutical companies.

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Pre-clinical and Clinical Large Molecules 1

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Commercial Large Molecules 1

  1. Including mammalian, microbial, cell & gene therapy products and bioconjugates (applied protein services and drug product services are included for pre-clinical and clinical molecules only)

Our modalities across Biologics include mammalian and microbial expression systems, covering both drug substance and parenteral drug product services, as well as bioconjugates and mRNA.

Throughout our biological modalities, we are uniquely positioned to offer customers a truly global development and manufacturing network. With an agile supply chain to address changing and uncertain market dynamics and security of supply, to eventually overcome any potential product shortages or eliminate macro-economic burden (e.g. trade restrictions), this distinctive offering is appreciated by both customers and the wider industry.

Mammalian

The mammalian cell culture derived molecules are the largest segment within Biologics. They represent over two-thirds of total global biologic products sales 1.

We have a strong global mammalian network with late-stage discovery, pre-clinical, clinical and commercial capabilities. With more than 30 years of experience in mammalian cell culture, our offering starts right after the late-stage discovery phase with our Applied Protein Services. This includes technologies and programs designed to assess and mitigate risks, reduce attrition and improve the quality and safety of therapeutic proteins in a cost-efficient and timely manner. These technologies include our Epibase® in silico and in vitro, immunogenicity screening, and our antibody humanization and de-immunization services.

We offer a wide range of contract development and manu-facturing services from vector construction, cell line and process development, characterization, process optimization, and clinical and commercial manufacture from small to large scale. We use industry-leading technologies, such as our proprietary GS Xceed® Gene Expression System for mammalian expression. This expression manufacturing platform enables the production of high-quality products under current good manufacturing practices (cGMP) in a time- and cost-effective way. This can help improve speed to the clinic or market while helping to reduce the costs and delays associated with low yields and poor batch quality. The system now underpins dozens of commercially available products, plus hundreds of others in clinical trials.   

Microbial

Microbial expression of biological molecules represents the second largest segment in the Biologics market after mammalian. With more than 30 years of experience in microbial fermentation for biopharmaceuticals, we cover a complete line of service offerings from strain development to large-scale commercial manufacturing. The microbial cell-based derived molecules are produced exclusively in Visp (CH).

Specific services that enhance our microbial offering include supporting analytical development with a wide range of testing expertise in microbial products, and drug-product development services for parenteral formulations.

We have extensive experience in microbial processes using advanced engineering and process development capabilities. Our toolbox contains well-established technologies for efficient, scalable and regulatory compliant processes. Our XS Technologies® platform for microbial expression includes Escherichia coli, Pichia pastoris and Bacillus subtilis expression systems.

Bioconjugates

Bioconjugates are a growing class of biopharma-ceuticals. Our bioconjugates business reflects our broad and established capability in manufacturing complex molecules.

We produce bioconjugates exclusively in Visp (CH) where we have manufacturing assets to produce all the individual elements needed for bioconjugate constructs including customers’ novel payload and linkers. Our experience spans a broad range of bioconjugation technologies, including commercial antibody drug conjugates (ADCs), radio-immunoconjugates (mAb conjugated to chelating agents), vaccines (haptens conjugated to carrier proteins), PEGylation and cross-linking antibodies conjugated to nanoparticles (TNPs) and non-cytotoxic drugs (including peptides).

We were among the first CDMOs to support commer-cialization of bioconjugates and currently manufacture the majority of leading ADC therapeutics, which are approved in more than 60 countries.

Parenteral Drug Product Services

Our Drug Product Services (DPS) team focuses on parenteral dosage forms and offers solutions for customers developing therapeutic proteins, peptides and cell and gene therapies, as well as small molecules that require a parenteral dosage form. These products are designed for injection, infusion, intravenous, subcutaneous and intraocular routes of administration.

The DPS team provides a complete portfolio of services for parenteral dosage forms, including formulation development, simulated clinical administration set-up and testing, analytical method development and quality control. Further services include primary packaging and device design and integration, drug product process development, and manufacturing of parenteral dosage forms for stability testing and pre-clinical or clinical testing. Our resources and expertise provide comprehensive support for large customer portfolios and complex biopharmaceuticals.

Our customers benefit from seamless integration of pharmaceutical ingredients and drug substance development for rapid and reliable entry into the clinic and for robust late-stage development. In addition, our DPS team offers best-in-class analytical and specialized services for routine processes and troubleshooting in pharmaceutical manufacturing.

Ibex® Solutions

Ibex® Solutions

Ibex® Solutions consists of three innovative offerings that span the complete product lifecycle of a biopharmaceutical – from preclinical to commercial stages, from drug substance to drug product, all in one location. The goal is to get new medicines to patients faster and give customers flexibility to manage supply addressing drug development uncertainty and market demand changes.

The three offerings Ibex® Design, Ibex® Develop, and Ibex® Dedicate have been developed in response to a highly dynamic market with rapidly evolving customer needs. The home for Ibex® Solutions is our biopark in Visp (CH), which leverages our existing infrastructure, support networks and a stable and highly skilled workforce.

Ibex® Design and Develop

Ibex® Design and Ibex® Develop cover the development and clinical manufacturing phases, supporting companies preparing for clinical trials, up to the launch of their product. Due for completion in H1 2021, the facility that will house these offers will be highly automated and use single-use technology (1,000L and 2,000L bioreactors). They will deliver clearly defined packages and timelines, essential for small companies with limited time and funds. They will provide drug product for clinical trials within 12 months, with an option to supply drug product for toxicology studies in only nine months, and from the start of process characterization to BLA submission in 22 months.

Ibex® Dedicate

Ibex® Dedicate is a fully customizable and flexible manufacturing solution, tailored to the customer precise operational and business needs. The offering enables companies with products in late clinical and commercial stages to respond quickly to changes in market demand, de-risk their programs and simplify their supply chain.

Ibex® Dedicate is integrated into our existing Visp (CH) site. Based on a modular, technology-agnostic concept with prebuilt shells and infrastructure, Ibex® Dedicate saves time to market and provides solutions to multiple technologies, including drug substance and drug product. Our flexible ownership and operating models help our customers to reduce investment risk by providing speed, flexibility and customization opportunities.

Sanofi Joint Venture (JV) Facility

The Sanofi JV facility is due for completion in H1 2021. This large-scale commercial facility (20,000L bioreactors) provides a new model for CDMO-sponsor relations. Both Sanofi and Lonza have 50% of the available capacity, giving them substantial flexibility within the collaboration.

Our Global Development and Manufacturing Footprint

We offer manufacturing services for clinical and commercial material across our sites globally, from small-scale (1,000–2,000L) through mid-scale (6,000L) to large-scale (10,000L, 15,000L 1 and 20,000L). We leverage our expertise in stainless steel, single-use and hybrid technologies to de-risk the path to market for our customers.

  1. Refers to microbial capacity

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  1. mRNA suites and microbial 3KL
  2. 50:50 Sanofi-Lonza joint venture
  3. Operational in Q2/Q3 2021

Highlights and Initiatives

In 2020, our Biologics business experienced some limited supply and manufacturing risks arising from the pandemic, but has continued to manage the situation. We saw an increase in new customers and programs, a number of which were focused on new drug candidates for COVID-19. There was high utilization across clinical and commercial – from small to large scale. We reported strong financials for 2020, with sales growth in the mid-teens, but lower operating margin as a result of the operational expenses arising from growth projects 1.

Forecasts for 2021 anticipate double-digit sales growth for the third consecutive year. This will be supported by key strategic growth initiatives across the business. In this context, we are confident that we can outperform the market and deliver the following growth rates on an annual basis for the next three years:

  • Mammalian – Lonza (10–14%) 6; Market (7–8%) 2
  • Microbial – Lonza (9–10%) 6; Market: (7–8%) 3
  • Bioconjugates – Lonza (10–12%) 6; Market: (6–8%) 4
  • Drug Product Services – Lonza (20%) 6; Market (7%) 5

To support market demand and our future growth, we are investing in new capacities across our global site network. As an example, by the end of 2020, we had installed mammalian capacity of around 330,000L. We are evaluating and planning additional capacities for small, mid- and large-scale in both 2023 and 2024.

In addition, we have invested in capacity expansion for bioconjugates, microbial development and manufacturing and single-use technology in Visp (CH), as well as an expansion of our parenteral drug product development and manufacturing services in Basel and Stein (CH). Furthermore, we continue to build capacity across our US and Asian sites. In Portsmouth (USA) we are adding mid-scale (6K) capacity for clinical and commercial monoclonal antibodies manufacturing, and in Hayward (USA) we are installing single-use technologies for mammalian clinical and commercial launch manufacturing. In Tuas (SG) we expanded our development services for mAb and in Guangzhou (CN), we are opening a new clinical mammalian manufacturing facility, to be operational in Q2/Q3 2021.

  1. Comparison versus 2019 at a constant exchange rate (CER)

  2. Based on volume; Source: Internal Analysis

  3. Based on volume; Source: Roots Analysis Research Report Biopharma Contract Manufacturing Market (2019)

  4. Based on volume; Source: Roots Analysis Research Report ADC contract manufacturing Market (2018)

  5. Based on volume; Source: HighTech Business Decisions (HTBD) Report: Biopharmaceutical Contract Fill-and-Finish: Best Practices Study (2018)

  6. Revenue growth

Personal Perspectives

Jean-Christophe Hyvert

Biologics

In 2020, we demonstrated the strength of our strategic direction and resilience of our business.

In addition to managing the day-to-day manufacturing activity and product delivery, we have made significant contributions to the development and commercialization of vaccines and therapies for COVID-19 pandemic, across multiple modalities.

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Expression Technologies

In 2020, we further enhanced the performance of our proprietary GS Gene Expression System® for optimized recombinant protein production with our newly-launched GSv9™ chemically defined media and feeds platform that maximizes cell concentration and protein yields while reducing production time. As a result, we are helping our customers to accelerate time to market for the next generation of therapeutics.

Since its introduction, there have been dozens of commercial products launched using our GS Xceed® Gene Expression System and we continue to support the development pipeline. As an example, we have partnered with Junshi Biosciences to produce a neutralizing antibody for COVID-19, expressed using our GS Xceed® Gene Expression System. This follows on from Junshi’s successful launch in China of the first domestic PD-1 targeting antibody using GS Xceed® in 2019. Together with the technical and regulatory expertise, this expression system is expected to provide valuable support for Junshi’s COVID-19 management program by helping to improve cell line development timelines and yields.

Clinical Development and Clinical Drug Substance Manufacturing

In 2020, we announced a collaboration with LamKap Bio Group to manufacture bispecific antibodies for cancer treatment. LamKap Bio Group develops fully human bispecific Kappa Lambda (κλ) antibodies targeting malignant cells in solid cancers. Within the collaboration, we have provided cell line development, drug substance and drug product services and current Good Manufacturing Practices (cGMP) for two programs. In addition, our LightPath™ cell line development program, optimized to ensure improved process yield and throughput, provides LamKap with material to enter Phase 1 clinical studies. LightPath™ is a Gene-to-Investigational New Drug (IND) cell line development program, designed to rapidly and cost effectively progress molecule candidates to a stable, commercially viable cell line. The program helps to reduce the time to IND filings, development of cGMP-compliant master and working cell banks.

Another example of collaboration within clinical development and manufacturing is with Surrozen Inc, to provide cell line development, drug substance and drug product (DP) process development and cGMP manufacturing, as well as regulatory support for its Investigational New Drug (IND) filing. Surrozen is developing first-in-class bispecific antibodies that selectively stimulate tissue regeneration. The agreement includes our Light Path™ cell line development program that will provide Surrozen with material to enter a Phase 1 clinical study.

In response to the urgent need for prevention and treatment of COVID-19, we have signed an agreement with AstraZeneca for the manufacture of a combination of two Long-Acting Antibodies (LAABs). The agreement enables AstraZeneca to leverage our extensive antibody manufacturing expertise, as well as QC testing, regulatory expertise, and experience with accelerated manufacturing campaigns. AstraZeneca will be one of the first companies to access our new mid-scale facilities in Portsmouth (USA).

Our integrated end-to-end offering is designed to meet the unique needs of virtual biotechs and their investors. The partnership announced with Anthos Therapeutics Partners, a biotech created by Blackstone Life Sciences and Novartis, utilized our novel milestone business model and leveraged our global network of process development and cGMP manufacturing facilities across Europe and the USA. The partnership supports the development and manufacturing of Abelacimab - a novel, fully human, Factor XI and XIa antibody, which could, if approved, address a range of thrombotic disorders.

Commercial Drug Substance Manufacturing

During 2020, we continued to invest in key enablers including manufacturing assets and announced the expansion of our microbial manufacturing facility in Visp (CH). The new facility will provide mid-scale commercial manufacturing to multiple customers and in particular, will support Servier, a long-term Lonza partner, with drug substance for acute lymphoblastic leukemia (ALL) therapies. The new mid-scale (3,000L) microbial facility will tap into existing central utilities and labs to complement the existing small-scale (1,000L) and large-scale (15,000L) assets in Visp. The facility is expected to be operational in the second half of 2022 with plans to add 100 new staff to the existing, highly-experienced microbial team.

In response to the COVID-19 pandemic, we announced a collaboration with Humanigen to expand lenzilumab manufacturing capacity in advance of potential Emergency Use Authorization in 2020. Lenzilumab is an antibody with the potential to prevent and treat an immune hyper-response called a “cytokine storm” in COVID-19 patients. This collaboration provides Humanigen with additional capacity for cGMP production of lenzilumab with commercial manufacturing scheduled to begin in 2021 at Hayward (USA).

Ibex® Solutions

Our Ibex® Solutions concept has attracted widespread and sustained customer interest, resulting in a series of strategic contracts. As an example, three important deals have been signed for Ibex® Dedicate for microbial and bioconjugates, including with Moderna and Kodiak Sciences.

The long-term contract with Kodiak Sciences covers manufacturing of KSI-301, an Antibody Biopolymer Conjugate (ABC) for the treatment of retinal diseases. The agreement will provide Kodiak with a custom-built bioconjugation facility in our Ibex® Dedicate facility in Visp (CH) with the flexibility to increase or reduce capacities in response to market demand. The construction is targeted for completion in 2021 with plans to utilize our global network of facilities, including Nansha (CN) and Visp to produce the biopolymer, and Portsmouth (USA) to produce the antibody.

In addition, we announced a long-term, strategic collaboration for bioconjugation with a global biopharma company. Under the terms of the agreement, we will construct two new customer-dedicated conjugation suites for the commercialization of antibody-drug conjugates (ADCs) at our Visp site, totaling 1,500m2 of active manufacturing space and built out within a pre-existing shell. The high throughput bioconjugation suites will be capable of handling highly-potent materials for cancer therapies and will initially manufacture two therapies. The new dedicated facility will employ around 200 staff with operations expected to start from the end of 2022.

The Sanofi JV facility is due for completion in H1 2021, with our available large-scale capacity already contracted.

Parenteral Drug Product Services

Since setting up Parenteral Drug Product Services in November 2016, we have built a leading CDMO business for pharmaceutical development of sterile drug product, supporting more than 80 customers in 2020.

Many patients need to regularly receive significant numbers of injections or infusions. With the aim of improving patient convenience, we have entered into a development and manufacturing collaboration with Ypsomed to offer comprehensive patch injector-based solutions to the pharmaceutical and biotech industry. As part of the agreement, we will provide drug product formulation and process development, filling, final assembly and testing of the final drug/device combination product. The goal is to reduce the number of hospital visits required for therapy administration and provide patients with a wearable patch injector for self-administration into subcutaneous tissue in their own homes.

mRNA

The COVID-19 pandemic has highlighted the increased need for industry partnerships and coordination. We have entered into a ten-year global strategic collaboration with Moderna with a current focus on supporting the commercial manufacture of the drug substance for Moderna’s COVID-19 Vaccine using an mRNA-based technology platform.

While we are not a traditional vaccine manufacturer, we have the scientific and technical skills to produce mRNA, enhanced by our global network, which has the ability to produce the vaccine in USA, Europe and Asia. 

We have installed four production lines, one in Portsmouth (USA) and three in Visp (CH). Manufacturing of mRNA began in July 2020 at our site in Portsmouth and production commenced in Visp (CH) at the end of 2020. In addition, we use our Ibex® Solutions complex in Visp, which is ideally suited to this challenge because of its flexibility to install a broad range of manufacturing technology.