CDMO Management
Contract design and manufacturing organizations (CDMO) enable a company to engage human-resources, tools and facilities rapidly. CDMOs typically provide a quality management system (QMS) and framework for designing and manufacturing a product. They mostly operate on a time and materials basis with bill rates varying based on the value and experience of each team member.
When a reputable CDMO is approached with a clear definition of what your company needs, they can leverage their existing team, facility, equipment, QMS and supply chain to catapult your company towards regulatory filing and commercialization. When the right CDMO is selected at the right time in your development process, they can literally shave 6 to 18 months off the schedule with better quality and reduced cost.
Unfortunately, engaging the wrong CDMO or at the wrong time can cost your organization 6-18 months. We've worked in and with more than a dozen CDMOs and have seen client relationships with these organizations thrive and fail. Some of the essential aspects to a successful CDMO relationship are:
Timing
It's important for a new company to know what they want before they engage a CDMO. Otherwise, the startup is enlisting an expensive partner to help them figure this out.
Fit
Each CDMO has a unique expertise, set of skills, headcount, location, quality system, supply chain, and bandwidth. It's important to interview several before making a selection to ensure that their team has the bandwidth and is willing and able to help. Although it's not necessary, we find that CDMOs that have a way of getting to low cost, high volume manufacturing (often outside the USA) can be important to avoid schedule delays during commercialization.
Communication
Most CDMOs set up a weekly call between your program management and theirs. It's important to have other channels of communication that touch base at appropriate time-intervals. Executives of each organization should connect at least quarterly. Managers should connect at least monthly. Program managers should connect roughly weekly and individual contributors are in daily contact. This parallel structure helps detect and avert program challenges early, without surprises, excessive financial expense and schedule setbacks.
Tracking
We recommend having someone on your internal team with CDMO experience to communicate with and manage the external organization. This person, often a Fractional CTO, will be able to speak the CDMO language, understand the project from the CDMO perspective and ensure that both organizations have an understanding of progress, risks, schedule, and cost.
When a reputable CDMO is approached with a clear definition of what your company needs, they can leverage their existing team, facility, equipment, QMS and supply chain to catapult your company towards regulatory filing and commercialization. When the right CDMO is selected at the right time in your development process, they can literally shave 6 to 18 months off the schedule with better quality and reduced cost.
Unfortunately, engaging the wrong CDMO or at the wrong time can cost your organization 6-18 months. We've worked in and with more than a dozen CDMOs and have seen client relationships with these organizations thrive and fail. Some of the essential aspects to a successful CDMO relationship are:
Timing
It's important for a new company to know what they want before they engage a CDMO. Otherwise, the startup is enlisting an expensive partner to help them figure this out.
Fit
Each CDMO has a unique expertise, set of skills, headcount, location, quality system, supply chain, and bandwidth. It's important to interview several before making a selection to ensure that their team has the bandwidth and is willing and able to help. Although it's not necessary, we find that CDMOs that have a way of getting to low cost, high volume manufacturing (often outside the USA) can be important to avoid schedule delays during commercialization.
Communication
Most CDMOs set up a weekly call between your program management and theirs. It's important to have other channels of communication that touch base at appropriate time-intervals. Executives of each organization should connect at least quarterly. Managers should connect at least monthly. Program managers should connect roughly weekly and individual contributors are in daily contact. This parallel structure helps detect and avert program challenges early, without surprises, excessive financial expense and schedule setbacks.
Tracking
We recommend having someone on your internal team with CDMO experience to communicate with and manage the external organization. This person, often a Fractional CTO, will be able to speak the CDMO language, understand the project from the CDMO perspective and ensure that both organizations have an understanding of progress, risks, schedule, and cost.
Case Study: CDMO out of control
One of our clients invented a revolutionary technology in the field of respiratory medicine. They applied for and received federal grants to partially fund development of the new technology. The client had a functioning prototype that delivered the therapy and they engaged a CDMO to help develop a commercial product.
The CDMO began work in January and by March had already burned through hundreds of thousands of dollars, which was a considerable portion of the grant. This shocked our client who then received advice from an advisor to have someone technical on their internal team. This was when we got involved.
Our first step was to visit the subject CDMO at their impressive facility to see what had been accomplished to date. We went into a meeting room with six members of the CDMO team, including two interns that were billing at over $125/hour. After asking the interns to leave the meeting, we poured through the deliverables which consisted of wordy documents and industrial design drawings. We recommended detaching from the CDMO because there was a disconnect between the status of the technology and the project work, the value of the existing deliverables was not apparent and we didn't agree with the overall approach. The CDMO rightly or wrongly had assumed that the technology was ready for commercialization, which was not the case. In fact, it took our client several years to characterize and optimize the performance of the technology to the point of being able to design a commercial embodiment.
We tell this story as a cautionary tale with the morals being:
1) Engage a CDMO once you have your technology and use case fully characterized.
2) Have a technical person on your internal team to speak the language and manage a CDMO.
3) Insist on understanding the cost of a CDMO development program before and during a project.
The CDMO began work in January and by March had already burned through hundreds of thousands of dollars, which was a considerable portion of the grant. This shocked our client who then received advice from an advisor to have someone technical on their internal team. This was when we got involved.
Our first step was to visit the subject CDMO at their impressive facility to see what had been accomplished to date. We went into a meeting room with six members of the CDMO team, including two interns that were billing at over $125/hour. After asking the interns to leave the meeting, we poured through the deliverables which consisted of wordy documents and industrial design drawings. We recommended detaching from the CDMO because there was a disconnect between the status of the technology and the project work, the value of the existing deliverables was not apparent and we didn't agree with the overall approach. The CDMO rightly or wrongly had assumed that the technology was ready for commercialization, which was not the case. In fact, it took our client several years to characterize and optimize the performance of the technology to the point of being able to design a commercial embodiment.
We tell this story as a cautionary tale with the morals being:
1) Engage a CDMO once you have your technology and use case fully characterized.
2) Have a technical person on your internal team to speak the language and manage a CDMO.
3) Insist on understanding the cost of a CDMO development program before and during a project.
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