How To Find the Best CDMO

Feel free to skip ahead if you like, but we often find that seasoned industry veterans will make inaccurate assumptions about CDMOs and what they do (and don’t do)! So, for review… not all CDMOs provide the same services or offer the same capabilities, but in essence, a CDMO is an organization that provides services within the pharmaceutical industry. You’ll often hear a CDMO partnership referred to as “pharmaceutical outsourcing.”

Services Provided by CDMOs

Some full-service CDMOs will provide everything that’s needed to develop and ultimately launch a new drug product. Others will choose to specialize in a particular phase of the drug development process.

Common services include:

• Manufacturing and packaging — small-scale, large-scale commercial manufacturing, or both
• Formulation development
• Analytical services
• Technical transfer and dossier reports
• Clinical trial materials

Less common services include:

• Early-stage development services
• API (active pharmaceutical ingredient) manufacturing
• Stability testing
• Bioanalytical services

What Does CDMO Stand For?

CDMO stands for contract development and manufacturing organization, and it is sometimes used interchangeably with another acronym — CMO (contract manufacturing organization). However, as the name suggests, a CMO only focuses on manufacturing services. 

While many read the following statistics and conclude that high rates of failure in our industry are inevitable, they actually tell a very different story.

Recent Drug Development Statistics

There may always be an element of risk involved in drug development, but these common problems should be identified earlier on in the process before too much time and money are wasted.

Unfortunately, recent data also suggests that’s not what’s happening.

What this data suggests is that many companies without skilled teams try to do too much in-house, partner with CDMOs that aren't up to the challenge, or start partnerships too late in the process to avoid significant setbacks.

However, outsourcing can bring its own challenges, so let's explore them.

Sometimes the choice to partner with a skilled CDMO is an obvious one: you lack the skills or the resources necessary to complete a drug development project internally. But larger pharmaceutical companies will sometimes choose to outsource some or all of the work involved because, among other reasons, a smaller CDMO can often work faster than an organization with a large bureaucracy.

Before we explore the many benefits of pharmaceutical outsourcing in more detail, let’s talk about a few drawbacks — or at least, perceived drawbacks.

2 Potential Drawbacks of Working With a CDMO

Every CDMO is different, but here are the two frustrations we frequently hear when clients discuss their past partnerships.

1. Outsourcing Costs

Drug development is expensive. There’s no way around that. But the potential rewards can be game-changing for biotech companies and life-saving for many patient populations. So, while it’s understandable that a “cheaper” CDMO might be attractive, unless that CDMO has a consistent track record, then the odds are high that they’ll end up costing you far more in the long run.

In this business, you tend to get what you pay for. But a good CDMO can also add significant value to your project if you bring them in early — before common pitfalls in drug development start racking up a bill.

2. Loss of Control

The drug development process is long and challenging. And like every long-term relationship, little problems can eventually turn into much bigger ones. Depending on the CDMO you hire, you might not have as much control over how their teams work, how they make decisions, how they prioritize your project, and how they communicate with you.

Compatibility, flexibility, and trust go a long way, but it’s important not to underestimate the issues poor communication and incompatible cultures can cause, especially when a great deal of money is on the line.

10 Benefits of Partnering With a Contract Development and Manufacturing Organization

A few of these will be fairly obvious. However, because many biotechs still underestimate what a good CDMO can bring to the table, our team wanted to offer a comprehensive list.

1. Save More Money Over Time

Yes! Cost savings is actually a benefit of pharmaceutical outsourcing, even though cost is often perceived as a drawback. This is just one of the many reasons we’d advise any biotech company not to make their decision solely on a CDMO’s rates. When you outsource, there’s no need to purchase additional equipment or facilities or add highly skilled staff. And in many cases, a CDMO can help you avoid expensive setbacks throughout the life of your project.

2. Ease Funding Challenges

While overall investment in the pharmaceutical industry has seen a notable market correction since the pandemic, a CDMO with a proven track record can boost investor confidence, and therefore, help you attract additional funding.

3. Add Scalability

Drug development requires specialized formulation and manufacturing equipment and quite a bit of space. Outsourcing some or all of this process allows you to scale your own operations up or down as needed.

4. Eliminate Skill Gaps

Many seasoned pharmaceutical executives are guilty of underestimating the amount of solid science that goes into developing a new treatment. At Corealis, we specialize in oral solid dosage (OSD) products, so we perhaps see this kind of thinking more often. It’s very easy to underestimate what goes into formulating a pill. But formulating and manufacturing a new treatment can be very complicated, and every stage in the process introduces new areas of risk.

Many biotechs attempting this process in-house have a hard time knowing what they don’t know. Unfortunately, that lack of knowledge can affect their choices about who to hire. It’s not that CDMOs never experience setbacks or challenges. But because bringing products to market successfully is what they do day in and day out, a CDMO with an excellent track record — by sheer necessity — will have solved this problem.

5. Increase Speed to Market

We touched on this earlier, but many CDMOs are known for being remarkably agile and can use their established processes and regulatory expertise to accelerate your timelines.

6. Reduce Risk

Not every CDMO will have the same level of skill, and unfortunately, some will try to win business by inflating their capabilities. We’ll give some pointers for how to evaluate a CDMO’s reputation a bit later, but an excellent CDMO can reduce your risk throughout the course of their partnership.

7. Get Advanced Regulatory Support

A good CDMO will be well-versed in regulatory requirements and can help you avoid delays. Some will also use their knowledge of different regulatory requirements around the world to help you in other ways. For example, our quality systems undergo regular review by auditors and qualified quality persons (European QP), which can save our clients time and money during European clinical supply manufacturing campaigns.

8. Expand Your Product’s Market

This is somewhat related to the previous benefit, but it’s one that often gets missed, so we wanted to highlight it. A CDMO that understands different regional requirements or preferences will often be able to facilitate easier market entry throughout the world.

9. Optimize Your Resources

Outsourcing, when done well, allows you to focus on your core strengths. This is hardly unique to our industry, but many companies put quite a bit of their time and resources towards improving their weaknesses. While that’s an admirable goal, companies that focus on their core competencies tend to outperform their peers.

10. Pursue More Challenging Projects (Highly Potent APIs, etc.)

Working with certain substances requires specialized equipment, facilities, and skills. However, the demand for many treatments with challenging ingredients is growing, particularly in oncology.

If you’re considering working with any of these types of ingredients, unless you already have everything you need in-house, we’d encourage you to partner with a CDMO:

1. Cytotoxic compounds
2. Biologic products
3. Controlled substances
4. Radiopharmaceuticals
5. Gene therapy products
6. Sterile injectables
7. Nanoparticle-based drugs
8. Hormones
9. Antibiotics
10. Peptides and oligonucleotides
11. Live bacterial products
12. Photosensitive compounds
13. Hygroscopic or moisture-sensitive materials
14. Volatile organic compounds (VOCs)
15. Cryogenic materials

Some CDMOs’ value propositions include handling every aspect of the drug development journey, while others have distinguished themselves by perfecting a certain portion of the project. At face value, it might seem like a full-service CDMO would offer a faster, simpler overall process. However, just because a CDMO might be capable of handling an entire project from start to finish doesn’t mean it’s always capable of handling every part of the process equally well.

A full-service CDMO might be a better fit when:

• You want a single point of contact for all development and manufacturing needs
• Your project doesn’t require specialized skills

Consider a specialized CDMO when:

• Your project requires working with a niche technology
• You need cutting-edge expertise in a particular area
• Your product has unique manufacturing challenges
• You need best-in-class capabilities for a critical aspect of development
• You only need to outsource specific functions

An Additional Note About Tech Transfer

It’s a common assumption in our industry that using a specialized CDMO for part of the drug development process will cause delays. However, a specialized CDMO that’s worth their salt will understand that their technical transfer capabilities are critical to keeping processes moving, even as they change hands.

If you already know that a skilled partner will help your project succeed, the next step is to find the right one. But believe us when we say that no single CDMO is the right choice for every client or every product. At Corealis, if we’re not the right fit, we’ll be the first to let a potential client know. We’d always rather lose a project than a long-term relationship. But that sentiment isn’t universal.

Our industry has a reputation for being inscrutable to outsiders, and this lack of clarity is part of the reason why biotech companies often choose a partnership solely on price… and also why we see such high rates of failure.

Key Evaluation Criteria

Because we’ve heard too many stories of failed or frustrating partnerships, our team has outlined the criteria — some obvious, and some not — that you should use to evaluate a potential partner.

1. Capabilities and Expertise

The CDMO you work with should already have the facilities, equipment, and expertise they need in place, before committing to your project.

2. Track Record

If you’ve attended any of our industry’s major conferences, this might come as a surprise, but in many aspects, our “world” is very small. Stories of a CDMO’s successes (and failures) travel quickly. So if you’d like to do a little digging beyond a candidate’s website, it’s fairly easy. Just ask around.

3. Dedicated Team Members

Larger CDMOs can often handle more aspects of drug development, but sometimes there’s a trade-off. Your project might not get the same amount of attention from senior leadership. This is why at Corealis we’ve chosen to remain small. All of our clients get the “A-team” because we simply don’t have a “B-team.”

Before you sign with a CDMO, make sure you understand who will actually be handling your project.

4. Flexibility and Fit

We touched on this earlier — when outsourcing your drug development project, you’ll give up some degree of control over day-to-day operations. But a good CDMO should meet you halfway to ensure a mutually beneficial partnership. Be sure to talk through communication, pricing models, and company cultures to reduce friction throughout the process.

A flexible CDMO is also a green flag when it comes to the overall success of your project! A more adaptable CDMO will likely be better prepared to handle unexpected issues or adjust to evolving regulations and market conditions.

5. Reliability and Confidentiality

You should never have to question whether or not your CDMO is acting in your best interests. Consistent quality and timely delivery should also be a given. But in addition to protecting your valuable IP and trade secrets, as cybercrime continues to escalate in frequency and severity around the world, it’s also paramount that your partner is able to protect your sensitive research and clinical data.

6. Cost

We listed cost last for a reason. A CDMO that can’t help you reduce risk, save time, or launch a successful product can’t save you money — no matter how cheaply they price their services.

But we understand that cost will always be a factor, especially for smaller startups. So All other things being equal, here is our best advice: Carefully weigh cost considerations against a CDMO’s ability to save you money over time or attract additional investment. When in doubt, ask!

Common Red Flags in Manufacturing Services, Formulation Development, and Communication

If any of these red flags emerge as you do your research, you should think carefully before signing with a particular CDMO:

1. Reluctance to share details about their quality systems, past performance, or recent audits
2. Answers to important questions come slowly, or different team members provide conflicting information
3. A history of regulatory citations or warnings
4. A lack of experience working on similar projects
5. Outdated equipment or methods
6. Signs of overcommitment or other indications that your project won’t be a high priority
7. Frequent turnover in key roles
8. Signs of financial instability
9. Lax security tools and practices
10. An unwillingness to accommodate your needs

Questions To Ask Potential Partners

You should have quite a few questions for any CDMO you might work with, but these should always be on the list, and the answers should always be yes.

Can I Visit?

An excellent CDMO that’s invested in state-of-the-art facilities and maintains them well will be eager to welcome visitors. We recently added 15,000 sq. ft of space to make room for new, cutting-edge analytical equipment. We hosted an inaugural event for our guests, but we’ve made it easy to visit us at any time.

Will You Provide a List of Recent Clients?

Some CDMOs have been known to only provide a list of clients that have had a positive experience. Still, a list of references should be a good starting point. This may go without saying, but as you talk with your colleagues about potential partners, if you notice that any notable clients are missing from the list a CDMO has provided, that should raise eyebrows.

Have You Already Worked on a Similar Project That Uses the Same Drug Delivery Methods?

As pharmaceutical technology evolves, some newer drug delivery methods (transdermal patches, implants, etc.) can often represent incredible marketplace opportunities. However, you’re paying for elite expertise, and you probably don’t want to be a CDMO’s first experience with a new form of drug delivery.

While topics around the industry’s use of AI are grabbing headlines, here are a few innovations that we think should get a bit more attention:

• Single-use technologies that reduce the risk of cross-contamination
• Advanced analytics to monitor the manufacturing process in real-time
• Modular manufacturing equipment that can be quickly reconfigured as needed
• Advanced technology that can ensure and demonstrate compliance

We are relentless optimists, but we’re also realists. What we do isn’t easy, and while we are probably not the cheapest CDMO you’ll find, we aim to be the very best.

We believe that every good idea should get a fair chance to succeed, and so we’ve decided to offer complimentary Druggability Assessments for OSD projects. Click the link below to learn more and get started!