Contract Pharma Talks Growth With Malcolm Little and Nick Bykerk
Contract Pharma recently talked about GRAM’s growth, the new greenfield facility and the new equipment housed in it with Malcolm Little, Partner at Arlington Capital Partners and GRAM Board Director, and GRAM’s Vice President of Finance, Nick Bykerk.
Contract Pharma (CP): What was the drive behind GRAM’s investment in the new facility?
Malcolm Little: At the onset of our partnership with GRAM, Arlington Capital Partners identified a significant supply and demand imbalance existing in the aseptic fill-finish market—specifically in the U.S., but globally as well. GRAM was, and is, uniquely positioned to serve as a platform for rapid expansion by upholding the quality standards and exemplary culture that is already instilled in the company. The demand for GRAM’s services was well in excess of the business’ existing footprint, so the opportunity to invest in the business to facilitate its rapid expansion was attractive.
Nick Bykerk: Early on, we identified the unique opportunity to build a truly state-of-the-art facility from the ground up and specifically design it to serve the growing pharmaceutical market. Designing GRAM’s new facility from the ground up allowed us to focus on the processes and equipment that will provide the most benefit to our clients while putting us on the forefront of technology and regulatory trends. Deciding upon facility layout and equipment first, then building the facility around it, allows us to concentrate on innovations that lead to the highest quality products, and gives us the ability to adapt to the ever-changing regulatory environment.
CP: What makes the facility unique?
Nick Bykerk: In addition to the design-build concept that further meets growing market demand, GRAM invested in fully integrated, top of the line equipment including a Bausch+Ströbel filling line with SKAN Isolators and an IMA lyophilizer with auto-loading capabilities. The new equipment and technology support our existing technical expertise, enhance capabilities and allow GRAM to increase throughput while maintaining an aseptic environment that continues to prioritize product integrity.
CP: How does the new equipment technology bolster GRAM’s capabilities as a parenteral drug manufacturer?
Nick Bykerk: Quality, technical expertise and customer service continue to take precedence, and GRAM has substantially invested in equipment that strengthens these focuses. After a comprehensive vetting process, GRAM chose SKAN isolators, a Bausch+Ströbel filler and an IMA lyophilizer not on account of their brand names, but because of their commitments to quality, reputations for excellence and willingness to work collaboratively. All three systems work together and were customized to fit GRAM’s unique, innovative objectives and those of the market in which it operates. GRAM is grateful for our established relationships with these partners that allow for open communication and collaborative solutions with some of the top minds in the industry.
CP: What are some other key business highlights in the past 12 months?
Nick Bykerk: In addition to our focus on the expansion and consistently providing the highest quality products to customers, our attention has been on talent acquisition—recruiting the most experienced, knowledgeable and accountable people to optimize our investments in technical expertise.
CP: In general, how would you characterize the state of the parenteral drug manufacturing market?
Nick Bykerk: Simply put: limited supply, explosive demand. Generally, the market is experiencing a high volume of consolidation and capacity is being seized for internal purposes. We also hear more and more about suppliers running into quality issues with the FDA and when combined with the removal of competition in the space, supply is greatly reduced. As the ever-evolving drug market trends toward biosimilars and generics, the demand for GRAM’s services and proven quality record of zero Form 483s on our last two inspections will continue to grow.
CP: What are three key trends in the aseptic processing space?
Nick Bykerk: There are three key trends that stand out from a technical perspective, the first being the use of science-based approaches to risk assessment and risk management. GRAM approached the design of its new facility with assessing and mitigating risk in mind. We also made it a priority to understand the product design and related process requirements as well as the associated risks.
A second trend is the role of the barrier in isolator technology. Regulators are pushing suppliers toward isolator technology to minimize human intervention and risk. GRAM experts stay alert on recommendations from the FDA, working in conjunction with regulators to implement high quality standards.
Lastly, a critical driver in the aseptic space is the importance of automation. Right now, many existing CDMO processes rely on batch processing. The move away from human involvement is one reason why GRAM has heavily invested in automation and integration.
CP: What are some of the crucial issues and challenges impacting aseptic processing and parenteral drug manufacturing?
Nick Bykerk: Keeping up with those three key trends are important for customers to consider when choosing a CMDO partner. Likewise, modernization of legacy facilities’ equipment and processes is a critical issue.
CP: What are your customers’ key concerns when they come to you as a partner?
Nick Bykerk: Having a partner that is on the leading edge of technology, equipment and processes is key for customers in the aseptic space, and GRAM’s stance is that it all points back to quality. If the FDA were to eventually mandate the move to isolator technology, for example, it is an expensive process with long lead times and lengthy qualification processes. Focusing investments on quality and innovation positions CDMOs to best serve their clients.
CP: Beyond the opening of the facility this spring, what’s next for GRAM?
Nick Bykerk: Expect to see the same growth from GRAM—continuing to expand our expertise for our customer base and further tapping into numerous drug markets including biosimilars, biologics, generics and name brands—while doing more with better technology in our new facility. Our investments will help us to continue to prioritize quality, scale our systems, and employ talent that is committed to impacting people’s lives with the work GRAM does inside and outside of our facility walls.
CP: What about GRAM appealed to Arlington, sparking the majority investment back at the end of 2017?
Malcolm Little: GRAM is well-positioned to meet the growing demand for aseptic CDMO services because of the company’s exemplary quality record, which is truly unique in the industry. Additionally, GRAM’s breadth of development and manufacturing experience across therapeutic areas at both a clinical and commercial scale provides a solid foundation from which to further grow.
GRAM has amassed a diverse base of blue-chip customers, which supports their efforts and validates the industry’s perspective on GRAM’s capabilities. As potential investors in GRAM, establishing this same high level of confidence in the GRAM management team was a critical factor in establishing our partnership. Tom Ross, CEO of GRAM, and the rest of the GRAM team have done an exemplary job building the company with an unwavering focus on scientific innovation and quality.
CP: What about the CDMO space in general is appealing to Arlington and why invest in the parenteral space?
Malcolm Little: Arlington Capital Partners has been one of the most active investors in pharma services over the last two decades, dating back across several funds and businesses we’ve helped to grow. CDMOs benefit from a favorable macro environment, which is supported by robust pharmaceutical development as well as increased reliance on providers of high-quality outsourced services.
Particularly in the large and growing parenteral market where demand continues to outpace supply, we are drawn to platforms like GRAM that have an established position supporting molecules across the entire product lifecycle. Significant investment in large molecule and other advanced therapies will continue to drive growth within the parenteral space.
CP: How would you characterize the state of the CDMO industry from an investor’s perspective?
Malcolm Little: The current supply and demand imbalance has attracted a lot of capital into the CDMO space, particularly in U.S. and European markets. In parenteral development and manufacturing, where GRAM operates, industry consolidation and quality issues have driven scarcity value amongst proven, high-quality platforms.
CP: What are the key trends and challenges unique to the CDMO space and impacting the market today?
Malcolm Little: A trend we’re continuing to watch is the considerable investment in advanced therapies. Therapies involving large molecules as well as cell and gene therapies are driving demand for outsourced development, manufacturing and finishing. Many, if not all, of these therapies require services that GRAM has in place today and will be expanding upon with the new facility.
Though not a new challenge, quality is a true differentiator and cannot be overemphasized in the CDMO space. Quality issues, particularly with offshore manufacturers, as well as supply chain challenges more generally are driving demand for domestic CDMO services, further straining existing industry capacity. This need continues to benefit businesses like GRAM that have a proven quality track record, scalable systems and the demonstrated ability to expand.