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Outsourcing Formulation Development & Manufacturing: CDMOs Are Making Their Supply Chains More Resilient and Secure

Growing R&D activities, personalized medicines, large-scale production of biologics, and access to new technologies are some of the biggest reasons why the contract development and manufacturing organization (CDMO) market is expected to practically double from $168 billion this year to $318 billion by 2034.“Contract development services are in high demand as pharmaceutical companies face challenges in bringing products from development to market quickly and efficiently,” says David Crawford, Associate Director – Manufacturing, Almac Pharma Services. “Companies are increasingly seeking development-driven CDMOs that offer fully integrated services, ensuring a seamless transition from pharmaceutical development to industrial-scale manufacturing. This approach accelerates time-to-market, mitigates risks, and optimizes resources.”

Mitigating risk and optimizing resources are also presenting challenges for CDMOs, particularly in the current geopolitical environment: the uncertainty of potential tariffs placed on incoming materials; waiting to see if The Pills Act passes; and the passage of The BioSecure Act – the latter two borne out of the pandemic. The PILLS Act (aka Producing Incentives for Long-term Production of Lifesaving Supply of Medicines) was introduced in February by Representative Claudia Tenney (NY-24) to promote the domestic production of generic medicines through tax incentives and reducing reliance on India and China for these drugs. Similarly, The BioSecure Act prohibits executive agencies (i.e., FDA, CDC, and NIH) from contracting or extending loans or grants to any company with current or future commercial arrangements with a “biotechnology company of concern,” such as those located in China.

As a CDMO founded in response to global supply challenges during the COVID-19 pandemic, Resilience has a deep interest in the evolving landscape of trade policies and tariff regulations. “We recognize the uncertainty these changes can create for our partners,” says Cyril Kelly, Senior Manager, Procurement Distribution, Logistics, Warehouse and Transportation. “We’ve begun taking steps to help mitigate concerns. Through continuous, ongoing monitoring, our supply chain team is closely tracking tariff developments and assessing the impact on suppliers and products based on country of origin while also considering how to minimize disruptions to overall supply chain. We’re leveraging supply chain engineering to reduce risk exposure and deliver targeted support that helps our partners interpret Harmonized Tariff Schedule classifications, assess general tariff exposure, and maintain compliance with international trade laws. We can facilitate conversations with trusted partners who specialize in cross-border transaction assessments to help further navigate these changes with confidence and help alleviate risk.”

In fact, many life science leaders view the current geopolitical conditions as an opportunity. “Contract manufacturing appears to be more in demand, perhaps due to the global geopolitical conditions creating uncertainty in the marketplace,” says Janice Cacace, Executive Director Pharmaceutical Development, Bend Bioscience. “With the push toward US manufacturing, and uncertainty in the feasibility of some offshore supply, plus tariff negotiations, we have seen an increase in requests for tech transfer projects for clinical and commercial manufacturing to customers who are looking to de-risk their overseas supply chain. We can no longer rely on the ‘justin-time’ operations of previous years, and the tariff situation has become a key risk factor. So, we are shoring up the supply chain and sourcing alternate suppliers as risk dictates. We are derisking by sourcing materials earlier in the development phase through to commercial manufacturing to ensure robust and continuous supply. This has resulted in the discovery that several basic OSD ingredients have different behaviors in formulations, despite being similar in description. Upfront understanding of these differences will save time and decrease risk in any future development program.”

In addition to sourcing earlier, CDMOs are strengthening their supply chains in other ways as well. “To navigate these geopolitical uncertainties, we are enhancing our supply chain resilience by diversifying our supplier base and investing in domestic manufacturing capabilities,” says Dr. Richard Johnson, Chief Scientific Officer & Founder at Upperton Pharma Solutions. “These measures aim to mitigate risks, ensuring uninterrupted service to our clients.”

Likewise, Aragen has proactively implemented a dual-sourcing strategy to improve supply chain resilience for critical active/inactive materials, functional and specialized excipients, consumables and packaging components, particularly those sourced from geopolitically sensitive regions. “We are also expanding our qualified vendor base across multiple geographies, to ensure business continuity and regulatory compliance,” says Vaibhav Sihorkar, Vice President & Head – Formulations Solutions, Aragen Life Sciences Ltd. “These efforts are closely aligned with our supply chain digitization and quality risk management practices, allowing us to maintain reliable clinical and development supply timelines for our global clients.”

While pharmaceuticals were initially exempt, the possibility of significant tariffs on pharmaceutical imports could have profound implications for the global pharmaceutical industry and CDMOs with operations largely outside the US. By concentrating on cost management, cultivating strategic partnerships, prioritizing robust compliance, proactively managing risk, and embracing holistic supply chain transformation, CDMOs are proactively turning tariff-related complexities into competitive advantages.

At Abzena, for example, the company is reshaping its supply chain strategy to thrive in a complex global market. “In the current geopolitical landscape, and among recent discussions about tariffs on pharmaceutical products and the BioSecure Act, our fully integrated, US-based manufacturing model offers a strategic advantage, often delivering a 25% price edge over many international competitors,” says Dr. Campbell Bunce, Chief Scientific Officer of Abzena. “By leveraging domestic partners for sterile filling, lyophilization, and packaging, we effectively manage the entire supply chain from monoclonal antibody (mAb) production to final drug product within the United States. This approach helps us minimize the unknown risks posed by global trade shifts for our customers.” More insight from these and other life science leaders follows in this exclusive Drug Development & Delivery annual report.

Aragen Life Sciences Ltd.: Accelerating the CMC Path with Clinical DP & DS Delivery

Aragen operates as a fully integrated CRDMO, offering end-to-end solutions that take new chemical entities (NCEs) from discovery, through clinical candidate nomination, to CMC, through the phase-appropriate drug substance/drug product development and manufacturing. The company aligns drug substance (DS) and drug product (DP) development under one roof, ensuring that formulation strategies are both scientifically grounded and operationally seamless across the molecule’s lifecycle, says Vaibhav Sihorkar, Vice President & Head – Formulations Solutions, Aragen Life Sciences Ltd.

“Within this ecosystem, formulation sciences play a pivotal role, serving as the bridge between exploratory research and clinical execution, and eventually translating discovery into clinic through integrated formulation excellence,” he says. “Our formulation CRDMO capabilities begin with pre-formulation support during the discovery phase, offering salt and polymorph screening, solid-state and particle engineering, bio-relevant solubility profiling, excipient compatibility, and pharmaceutical developability assessments. These are tailored to determine whether a molecule is CMC-enabling or CMC-challenging.”

Mr. Sihorkar says that this is a critical distinction that shapes the path to the clinic. Formulations designed for preclinical studies must not only achieve target exposures in rodent and non-rodent models, but also withstand the rigor of scale-up, stability, and manufacturability.

“Our deep technical strength lies in solving formulation challenges for a wide spectrum of difficult-to-develop molecules, including poorly soluble ‘brick dust’ compounds, chemically or physically unstable actives, and high-dose drugs with poor flow or compressibility profiles,” he says. Technologies such as spray drying, hotmelt extrusion, nanosizing, lipid-based systems, multi-particulates, and long-acting injectables are applied based on a compound’s bio/pharmaceutical needs and physicochemical properties. For instance, in amorphous solid dispersion development, Aragen assesses drug-polymer miscibility using advanced thermal analysis, computational prediction of interaction energies, and solid-state NMR, ensuring molecular-level dispersion and long-term physical stability. Design of Experiments (DoE) is applied to optimize process parameters and control particle size, morphology, and residual solvents – each influencing downstream scalability and bioavailability.

Mr. Sihorkar says Aragen clients are increasingly seeking early, scientifically informed formulation strategies to support IND-enabling studies and de-risk clinical entry. The CRDMO supports this with scientifically sound clinical DP strategy deployment, developing validated analytical methods, clinical batch manufacturing, and packaging for FIH through Phase 2 trials. “Our solutions range from drug-incapsule (DiC) and drug-in-bottle (DiB) approaches to simple (tablets, capsules) and complex (micronization- and SDD technology-based) oral solid dosage forms, injectables, and modified-release systems,” he explains. “This integrated approach allows us to go beyond formulation support and truly accelerate the CMC path with clinical DP and DS delivery.”

A recent case illustrates Aragen’s problem-solving capability. An NCE with low aqueous solubility failed to meet systemic exposure targets even after prior micro-sizing, nanosizing and SDD attempts by other vendors. The Aragen team reassessed the molecule’s developability through comprehensive physicochemical and solid-state profiling, based on principles of molecular pharmaceutics. “We designed tailored polymer selection that provide Tg and/or viscoelastic advantages to optimize and maintain both solubility advantage and extended stability from crystallisation, reformulated it using a refined spray drying strategy,” he explains.

The reformulated compound achieved over 3-fold improvement in preclinical exposure, allowing the client to progress through regulatory toxicology and initiate clinical material manufacturing at Aragen’s site, all executed under one integrated program. “We also integrated newer and upcoming technologies like Atomic Layer
Deposition (ALD), nanostructured lipids and second-generation LAI technologies that offer precise and improved solubility, stability, and release control,” he says.

Source – Drug Development & Delivery