Technology, not capacity, driving Catalent’s biologics strategy

Catalent has been working on cell line development and very small scale GMP biomanufacturing for a number of years, but only began offering larger-scale clinical services (up to 1,000L) when it opened its facility in Madison, Wisconsin in 2013​.

In San Francisco last week, this publication asked Mike Riley, general manager for biologics at Catalent, how the firm was competing against contract development and manufacturing organisation (CDMO) in a sector calling out for more capacity and commercial-scale biologics capabilities.

Management is discussing increasing capacity at Madison, he said, with plans to add 2,000L, or 2 x 2,000L, still being drawn up. This would follow the addition of a 1,000L single-use bioreactor added last year​.

“The initial Madison expansion we did gave us much bigger scale and we have seen a very strong growth in demand, and that’s leading us to look at some further expansion options,”​ he told us. “Biologics has traditionally been a smaller percentage of catalent’s business, but we are now aggressively investing to grow that capacity.”​

Niche tech​

However, while CDMO rivals such as Lonza​ and Patheon ​have invested heavily and acquired facilities to cope with biologics demand, Catalent’s biologics strategy is “technology-led,”​ according to Riley.

“All of Catalent’s most successful businesses are based on technology, where we have a differentiated technology and technology advantage - that’s where we’ve done very well. We are pursuing a similar strategy in biologics.”​

An example of this is the firm’s licensure and then acquisition of the SMARTag antibody-drug conjugate (ADC) platform from Redwood Bioscience in 2014​. The platform allows ADC developers to generate site-specific molecules with pinpoint conjugation accuracy on the antibody which Riley said helps boost the performance of such drugs.

He added a $600m deal with Swiss biopharma giant Roche announced in January​ has helped validate the platform,

“Working with a leading partner like Roche is a great testament to the technology we and Redwood have developed,” ​he said. “The technology is still relatively young but it has significant advantages that the market is now recognising.”​

We also asked Riley whether Catalent would be pursuing opportunities in the rapidly growing cell and gene therapy market.​

"​We believe there is still significant growth in traditional antibody and next generation antibody-conjugates, but some of these new areas like cell therapy and gene therapy are certainly interesting growth areas and present an opportunity for companies like Catalent," he said, but while the firm is evaluating such an opportunity he added are this is a relatively young field and changing fast. "​It’s understanding how would we best play in that space."​

Not competing with fellow CMOs​

Riley’s comments mirror those given by Catalent’s CFO Matthew Walsh at the Jefferies Global Healthcare Conference, also held last week.

According to Jefferies analyst David Windley, the biologics division has been the fastest grower for the CDMO “but still remains a small proportion of total revenue (2.5%).”​

Windley also noted that despite the heavy investment in the sector, Catalent “does not intend to compete with the leading biologic CMO competitors”​ and instead – as Riley confirmed - is focused on developing capabilities in niche areas.