Valentine's Day Heartbreak: How To Let Your (Underperforming) CMO Partner Go

This article originally appeared on BioProcess Online.

We read many articles about building relationships in the business environment to improve transactions, fortify the supply chain, and increase profits. These emphasize the hard work and transparency that each partner (license holder and CMO plant) need to exercise. But, what if the CMO has a deteriorating plant that directly impacts your production, or the personnel turnover creates an environment of never-ending deviations and senseless retraining? There are plenty of scenarios that evolve into a product introduction delay that will break the license holder’s company financially or ruin the product’s position (supply level or quality) in the market.

In these cases, you need to sever the relationship and engage a new CMO or insource the production. Your company cannot be damaged by the lack of performance of a supplier, even a CMO. Organizations need to know when to cut the cord and exit a relationship to save the product or company.

Like human relationships that are at an endpoint, we must be ready for alternative production and an exit strategy.

We will use our previous article “An Approach And Checklist For Engineering Due Diligence In Pharma M&As” as a basis for the technical content and to develop a systematic method for the analysis of the breakup.
 

Dear CMO Partner,

Over the last year, we have been working and struggling in our process tech transfer and to get our initial CTM batches made in your facility. The project has been plagued with problems, and we have concluded “it’s not us, it’s you!”

• Your facility is 30+ years old, and we knew that going in; however, we were led to believe it was well maintained. With our residency at the facility, we have become accustomed to frequent failures of the utility systems, outages, and extended shutdowns that delay our production runs. We have seen the lack of maintenance and the lack of reasonable investment.
• “Promises, promises” is all our organization hears when we need “line time” and production runs. We have a constant problem with commitment for line time due to priorities of another larger client.
• The production suites that we were promised at the sales presentation never came to fruition, and we are processing in a cramped space that was built in the 1990s and has had little to no upgrades on the gyp board walls, chipped floors, and faded ceilings with rouge on the HEPA frames.
• The HVAC zoning does not conform to Annex 1 or 2 because, instead of proper airlocks between grade changes, you use yellow tape on the floor to indicate the grade changes. We have repeatedly asked you to move our location or build proper airlocks, and you have discouraged us with the exorbitant cost, even though it would benefit you.
• When we asked for the HVAC zoning diagram, you initially refused to share it with us, stating it was “proprietary.” We understand why now, as it does not resemble the ISO 14644 standards called out in Annex 1 and 2. We believe the zoning issues, frequent humidity excursions, and the roof leak led to the mold contamination that shut our production suite down for a month.
• We have had multiple power failures, and the site’s backup generator does not have the capability to provide power to the processing space, only to the HVAC system. The worst outage was four days long, when a raccoon bit through the insulation on the transformer and the replacement and subsequent cleaning delayed our production yet another two weeks.
• We want to base our process entirely on single-use systems (SUS), but you could not accommodate that and forced us to use your old stainless-steel vessels and tanks. This caused severe delays in our tech transfer while you performed endless cleaning validation studies and charged us for them.
• The turnover of personnel at the scientist and engineer level has cost us significant time to get our facility modified and the batch record produced since we are frequently refamiliarizing a new team member of yours.
• The turnover of personnel at the operator level is nearly breathtaking, and every batch we have run requires training new personnel and running many “water batches” to familiarize them with the process.
• The workload for the staff in general seems very high, and our operators frequently seem fatigued.
• The HVAC system trips out and we are always writing deviations on loss of our Grade C area and the temperature and humidity excursions.
• The WFI system has twice been contaminated. The first time, you told us you replaced all the gaskets. Then when the contamination was detected again, you told us that all really meant less than 10 percent.

With all these problems, we have lost nearly a full year in our goal to get material into clinical trials and it has hurt the company’s valuation. Therefore, we have chosen to sever our relationship with you and cancel our contract.

Sincerely,

Your Former Biotech Client
 

As you read this, it is important to note the above-mentioned items are actually true, and they are the accumulation of our experiences with only two CMOs. These incidents included the raccoon, roof leaks, ice machine leaks, contamination of the critical utilities, and a mold contamination that never completely went away.

These CMOs had several characteristics in common:

• 30+ years of age
• Multiple changes of ownership over the years
• Poor to no preventive maintenance implementation (excellent SOP on paper, but not followed)
• Old HVAC that was never upgraded in 30 years
• The clients paid for any facility upgrades if they chose
• High turnover of personnel/not near a large city with pharma/biotech organizations or an ISPE chapter
• No investment
• Relationship with the FDA and EU not completely disclosed
• Several non-compliances to EU Annex 1 that the organization won’t address

If you have a CMO “partner” that resembles the above, start looking for a new partner and begin the transfer process before it impacts your company. Before signing up with a new CMO, make sure a complete engineering, process, and regulatory analysis is done using outside parties. Also, spend some time searching the various websites and services to uncover 483s, warning letters, and consent decrees. Never sign on with a CMO that has a warning letter, regardless of the price and perceived environment. Review our checklist (linked to above) and use all your resources to protect your process and production.