Making biopharmaceuticals is hard. Unlike traditional pharmaceuticals made through a fairly well defined series of reactions, biopharmaceuticals rely on cells of some sort to produce the desired compounds. Like all living things, the cells require care and occasionally do things you don’t want. It seems that Genzyme, a Boston biotech firm, has found this out the hard way (Production Snafus Expose Genzyme to Rivals, Wall Street Journal, Oct 15).
A series of manufacturing snafus has forced the company to ration some of its unique products. Those shortages have spurred the Food and Drug Administration to help rivals speed their push onto Genzyme’s turf.
When manufacturing troubles surfaced at its key Boston plant this spring, Genzyme was caught without backup production facilities for its two leading drugs and without enough inventory to see it through a production shutdown. Last month, it slashed sales forecasts for the two drugs.
Part of the problem is that the affected drugs are not so much cures for a disease but ways to manage chronic conditions. Consequently, patients are on them for extended periods and are stranded when Genzyme can’t deliver supply. It is this desire to protect patients that has led the FDA to allow other firms serve these patients even though their products haven’t been fully approved in the US yet.
Such troubles are not completely unforeseen. We have the following from a 2002 McKinsey Quarterly article (Biopharma’s capacity crunch, June 2002):
A wolf stands at the door of the biopharmaceutical industry. Over the next few years, the industry will be hard pressed to meet demand for promising new protein-based therapeutics that are now emerging from the laboratories. Manufacturing shortfalls in physical capacity and talent could spell lost revenues for companies through the middle of the decade.
At the time, their poster child was Immunex’s arthritis drug Enbrel. The firm ran out of capacity and was estimated to have lost over $200 million as a consequence.