Cell therapies reordering the CDMO market, says Thermo Fisher

25-Jun-2019 - Last updated on 25-Jun-2019 at 07:41 GMT

(Image: Getty/noipornpan)

Thermo Fisher has moved from ‘selling services’ to ‘selling solutions’, adapting to the demands of cell and gene therapies, executive says.

Franco Negron, president of commercial operation for Thermo Fisher Scientific, spoke to BioPharma-Reporter about the ‘excitement for the brand new area’ and how it has changed the company’s business model.

According to Negron, cell and gene therapies are reordering services provided by contract development and manufacturing organisations (CDMOs), as they realise that integrated offerings ‘make a big difference’.

Companies that only provide biologics services always have to find a partner for clinical trials, the commercial part and the logistics, especially as most of the products require cold-chain, Negron explained.

Therefore, the concept of integrated solutions is growing and attracting a lot of attention, since it “can help the customers through facilities, expertise, experience, size and magnitude, in order to be effective”, he said.

Negron added that, in Thermo Fisher’s booth at BIO, every part of the CDMO’s services was represented, and “everyone is probably meeting with the same client, but talking about different services, and that’s unlike last year”.

Redeveloping the business model

The executive also noted that due to the immense number of different cell and gene therapies being developed, a different business model is being introduced, with the company becoming ‘solutions-oriented’.

Instead of presenting its services to the customers, it is now asking: “‘How can I help you, what is your project and in what areas are you having challenges?’ And it is our job to provide them with an answer. We are moving from selling services to serving solutions.”

Thermo Fisher’s executive told us that 65% to 70% of the company’s clients today are small and emerging, while 80% of the molecules being developed are in the same hands.

Outsourcing to cut down the development cost

Asked how outsourcing might help the companies reduce the cost of development, Franco Negron presented an example of a biologics developers building a biologics plant on their own.

“In that case, the cost would be higher than if they gave all that volume to a CDMO, which can provide with an economy of scale and even consolidate the volume in a more efficient way,” he said.

He concluded, “Cost is only a portion of the total value [because] launching a product faster and more effectively has a lot more value than just the cost per unit.”