The Next Wave of Biomanufacturing Innovation Pt. 2

Major recent macro changes will lead to innovation in therapeutics manufacturing... where do the white spaces exist?

We continue with zest on our hunt for the next breakthrough in biomanufacturing amidst a rapidly evolving macro environment. The Biosecure Act has now passed through the House, as small-mid biotech companies scramble to re-strategize on domestic CDMO support. It is now highly unlikely a Trump-led government will fail to push an anti-China mandate.  Along the way, the FDA has also released two groundbreaking guidelines. The new platform technology guidance defines that if the agency has approved a new drug, a party can request a platform designation to leverage the same production technology in new or future applications. This is a novel approach and provides incentives for companies to streamline and solidify state-of-the-art development processes across assets. The agency has also doubled-down on their innovative manufacturing strategy, including but not limited to continuous manufacturing and novel analytical methods to increase product development speed and reduce drug shortages. The evolving landscape plus monumental changes with the new government leave room for innovation and new crops of ventures. 

Where are we most excited about in this space?

1. Rapid and robust subcutaneous or oral formulation: As I alluded to previously, in highly competitive pharmaceutical markets, differentiation of assets begins to take shape through forms outside of clinical effectiveness, through route of administration, ability to file on different insurance benefit plans, increased shelf life, and above all patient ease of access to medication. This becomes increasingly important with a shift in industry towards chronic disease management and is a top interest area of pharma to soften blows from IRA and patent cliffs. 

   1. We are on the hunt for a company that combines advanced software and hardware innovation for new formulation development, scales large markets (ex: generics, clearly identified off-patent partnerships), and has a unique business model. The last metric is the most important but most difficult to nail: what proprietary moat the company can bring will really determine its value at exit and its ability to capture royalties on the assets themselves. This can be through a novel materials technology play (a la Lindy Biosciences or Elektrofi), a novel sensors play (we have yet to find a stellar venture here), a novel physical space play (rapid subQ formulation in outer space with BioOrbit), or perhaps even using the formulation moat to create new assets in-house. 

2. Digital twins for scale-up and tech transfer: Having worked in commercial manufacturing, I’m confident the #1 reason for delay on traditional mAB therapeutic production lines is the inefficiency in large-scale tech transfer between sites. A close second is any modeling issues with scale-up from process development to pilot to full-scale GMP. An obvious solution is to mimic the manufacturing equipment and process outcomes via a digital twin, using AI and predictive analytics to create efficiencies along the tech transfer paradigm. 

   1. However, it is harder than hypothesized. There are many companies that have processing data trending based on previous batch information, or have robust software management platforms, but the real digital twin simulation of cell reactions and outcomes are a major hurdle to cross that no team has fully cracked yet across all bioprocessing steps (DataHow and BaseTwoAI are two we’ve been following that are cracking the shell, though). We’re bullish on a company that uses deep biology insights to create a virtual twin and partner with both pharma and CDMOs: from experience, likely the team will need deep insights from working in directly in pharma manufacturing, and it is unlikely a company working in a different manufacturing industry will be able to rapidly pivot due to complex regulatory paradigms. 

3. Radioisotope manufacturing: Last but certainly not least, with the exponentially rising tide in radiopharmaceuticals entering the clinic, we recognize the biggest hurdle in activation of this modality is rapid and high-quality manufacturing of isotopes. Next-generation isotopes like alpha emitters are driving excitement, aiming to kill the tumor cells while not harming the surrounding healthy tissue. But, not with challenges: most of the alpha emitters are not naturally occurring, which means manufacturers are having to hunt far and wide for starting materials from which they can extract the isotope. RayzeBio recently paused many late-stage trials as it faced supply challenges with its alpha isotope. 

   1. Pharma has responded swiftly to capture value along the supply chain. Lilly recently invested $10M into isotope supplier Ionetix, which operates a manufacturing facility capable of producing actinium-225. Another producer, Pantera, that partners closely with Bay­er raised $103M in a Se­ries A raise to build its first com­mer­cial man­u­fac­tur­ing fa­cil­i­ty. One of the only healthcare tools exit this year was another isotope producer, ARTMS, to Telix for $82M. Although these are small bets compared to the exit values of radiopharma asset-focused companies, we believe there will be more concentrated investment in the isotope production space as the 38 companies and 45 clinical stage programs catch up quickly to market.

If you are building or investing in this space, would love to hear from you!