Establishing Manufacturing Capabilities for Human Vaccines

WHITE PAPER

Establishing ManufacturingCapabilities for Human Vaccines

Key cost drivers and factors to consider when planning theestablishment of a vaccine production facility

Department of Trade, Investment and Innovation (TII) Vienna International Centre,P.O. Box 300, 1400 Vienna, AustriaEmail: [email protected]

Unido vaccines Cover korr.indd 1 20.11.17 20:52

WHITEPAPER

EstablishingManufacturingCapabilitiesforHumanVaccines

Keycostdriversandfactorstoconsiderwhenplanningtheestablishmentofavaccineproductionfacility

GlobalUNIDOProject:Strengtheningthelocalproduction

ofessentialmedicinesindevelopingcountriesthroughadvisoryandcapacitybuildingsupport

2017

WHITEPAPER:ESTABLISHINGMANUFACTURINGCAPABILITIESFORHUMANVACCINES

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The document has been prepared by Kris Howard, PharmaceuticalManufacturing Expert, UNIDO,Martin Nicholson, International Pharmaceutical Expert, UNIDO, andMartin Friede, coordinator oftheInitiativeforVaccineResearch(IVR)attheWorldHealthOrganization.

ItformspartofUNIDO’sglobalproject“Strengtheningthelocalproductionofessentialmedicinesindeveloping countries through advisory and capacity building support”, which is led by JuergenReinhardt, Senior Industrial Development Officer and ProjectManager, assisted by AlastairWest,PharmaceuticalManufacturingPlanforAfricaBusinessPlanCoordinator.

The project is funded by Germany’s Federal MinistryforEconomicCooperationandDevelopment(BMZ).

This document has been produced without formal United Nations editing. The designationsemployedandthepresentationofthematerialsinthisdocumentdonotimplytheexpressionofanyopinion whatsoever on the part of the Secretariat of the United Nations Industrial DevelopmentOrganization (UNIDO) concerning the legal status of any country, territory, city or area or of itsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries,oritseconomicsystemordegree of development. Designations such as “developed”, “industrialized”, and “developing” areintended for statistical convenience and do not necessarily express a judgement about the stagereachedbyaparticularcountryinthedevelopmentprocess.MentionoffirmnamesorcommercialproductsdoesnotconstituteanendorsementbyUNIDO.

Theopinions,statisticaldataandestimatescontainedinthisdocumentaretheresponsibilityoftheauthors and should not necessarily be considered as reflecting the views or bearing theendorsementofUNIDO.Althoughgreatcarehasbeentakentomaintaintheaccuracyofinformationherein,neitherUNIDOnoritsMemberStatesassumeanyresponsibilityforconsequenceswhichmayarisefromtheuseofthismaterial.

Thisdocumentmaybefreelyquotedorreprinted,butacknowledgementisrequested.


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TableofContentsExecutiveSummary................................................................................................................................1

1.Introduction........................................................................................................................................2

2.Understandingthemarket.................................................................................................................3

3.StepsofVaccineManufacturingProduction......................................................................................4

4.FacilityDesignConsiderations............................................................................................................8

5.Challenges........................................................................................................................................13

6.NextSteps........................................................................................................................................14

Appendix1:Scenarioanalysis:considerationofprojecttimeandinvestmentcost............................16

Appendix2:OtherConsiderations.......................................................................................................22

Appendix3:Glossary............................................................................................................................27

Appendix4:Acknowledgements..........................................................................................................29

ExecutiveSummaryThis white paper aims to give an introduction to the manufacturing of human vaccines, bothproviding informationabout thevaccinemarketand summarizing thenecessary investment costs,projecttimelinesandotherfactorstotakeintoconsideration.

Thefirstkeypoint is thatprojectcostsandtimelinescanbemuchgreaterthannewcomerstotheindustry initiallyexpect-tenstohundredsofmillionsofdollarsand5-10yearsormore−astherearemyriadextracostsandfactorscausingtimelineextensionsnotmentionedinpopularliteratureorsalespresentations.

Secondly,thereareanumberofkeyfactorsthatneedtobealignedinordertodeliverasuccessfulproject.These includefindingasuitablemarketnicheandpurchaser, findingasuitabletechnologytransfer partner, hiring skilled workers, consultants and specialized firms, and building GMPcompliantfacilitiesaswellascoordinatingallaspectsoftheproject.

Themain document summarizes these points, and is supported by three appendices. Appendix 1givesexamplesofcostsandtimelinesforbotharealandatheoreticalfacility.Appendix2containsanexpandedlistoffactorstoconsider.Appendix3containsaglossaryofkeyterms.

Bytheendofthisdocumentthereaderwillhaveagoodideaofkeyconsiderationsandfactorstobetaken into account when considering the feasibility of establishing human vaccinemanufacturingcapabilitiesandwhatkeynextstepstotake.


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1. IntroductionThiswhitepaperaimstoserveasaprimerforentitiesthatarenewtohumanvaccinemanufacturingand interested in developing production capacity for the first time in a new location. This primerdoes not cover developing a new vaccine from scratch, but rather building a facility to produceexistingvaccines.BoldtermsarefurtherexplainedintheGlossary.

First,newproducersmustunderstandthattheglobalvaccinemarketisunique.Thevastmajorityoftheglobalsalesvolumeispurchasedonatenderbasisbylargegovernmentalandnon-governmentalorganizationsratherthanontheprivatemarketbyindividuals.Next,thisguidegivesanoverviewofthedifferentstepsofvaccineproductionandthekeyaspectsanewproducershouldunderstand.

Most importantly,thisprimeraimstogiveanaccuraterepresentationofthechallengeswithinthesector sopotentialproducerscanaccuratelydetermine if vaccinemanufacturing is right for them.Comparedtootherproductsandevenpharmaceuticals,vaccinemanufacturingfacesrelativelyhighcosts,longtimelinesandsignificantbarrierstoentry.

Finally, this primer indicates some next steps potential producers should take as they hone theirbusinesscasesandbegintheirconceptlevelfeasibilityassessments.

Thewhite paper forms part of a series of publications that have been produced in collaborationbetween UNIDO, WHO and AVMI. Currently, two other documents in this series can also beconsulted.Theyare:

VMPA Study: Vaccine Manufacturing and Procurement in Africa (2017). This provides acomprehensive overview and assessment of the case for vaccine manufacturing on the Africancontinentandcoversfourcoreareas:thevaccinemarket,vaccineprocurement,issuesrelatedtothemanufacturingcapabilityitselfandlastlyfinancingconsiderations.

Commercialisingvaccines:Amethodologytoidentifypotentialmarketopportunitiesandconductoutline assessments (2017). This paper outlines a process for conducting an initial evaluation todeterminethefinancialviabilityofsettingupanewfacilitytosupplyvaccinestoaparticularmarketusingrealmarketdata;inthisinstanceSouthAfricawasusedasacountrycasestudy.

This white paper is intended to be a basic introduction to the complex world of vaccinemanufacturing.

Itservesasaprimer,outliningkeyfactorsandconsiderationsforthoselookingtoestablishtheirfirstvaccinemanufacturingfacility.

Summarymessages,suchasthese,areprovidedatregularintervalsthroughoutthepaper.


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2. UnderstandingthemarketThe vaccinemarket is distinct from any othermarket sector. Procurement generally happens onlocal,regionalornationallevelsonalargescale.Therequirednumberofdosesinacountryistiedtothesizeofthebirthcohortandnumberofdosespervaccine.Asvaccinesarerecommendedforanentirebirthcohort,thissetstheupperlimitofdemandforthatcountry.However,agovernmentorNGOvaccinationprogrammaynotcovertheentirecohort.

This fixed demandbased on cohort sizemeans a country orNGOmight request 20million doseseveryyearover5years,withnointerestinbuyinganymoreorlessthanthestateddoses.Inacasewhereproductioncapacityisallocatedforatenderthatisdelayedorawardedtoanothercompany,there is limitedopportunity foranewcomer to sellexcess stock throughprivate sales channelsasexplainedbelow.

GlobalMost procurementon a global level is conducted throughUNICEF, purchasingonbehalf of donororganizationssuchasGAVI.GAVIandsimilarorganizationsfundvaccinepurchasesonbehalfofthepoorestcountries.Countriesgraduateoutofthissupportastheybecomericher.UNICEFpricesareavailableonline,andaregenerallyacceptedasreflectingapricepointthatiseitherclosetothecostof goods (COG) or COG plus a small margin for most products. Selling to UNICEF requiresWHOPrequalification,which istypicallyahighbarrierforanewcomer.Prequalification isanassessmentbyWHOoftheproducttoensurethatitissafe,appropriateandmeetsstringentqualitystandards.Manufacturers wishing to enter this large market need to meet the prequalification criteria.Additionally,theircountry’sNationalRegulatoryAuthorityneedstohavereachedaspecificlevelofmaturity/accreditation.

RegionalRegionalalliancesaremadeupofseveralcountries,thelargestofwhichisthePanAmericanHealthOrganization (PAHO) covering theAmericas and Caribbean. PAHOprices, depicted as aWeightedAveragePrice,arealsofreelyavailableonline.GenerallyhigherthanUNICEFprices,PAHOpricesareagoodguidetovaccineprices inmedium-incomecountriesacrosstheworld.SellingtoPAHOalsorequiresWHOPrequalification.

NationalCountries thatarenotpartof analliancemustnegotiate individually to setpurchasingpricesandvolumes foranynational vaccinationprograms theymayhave.While individual countries’ vaccinepricesmaybehardtoverifywithpubliclyavailableinformation,thePAHOpricesareagoodestimatefor medium-income countries, with wealthier or poorer countries paying proportionally more orless.Regulationtoenteracountry’smarketdependsheavilyontheindividualcountry.


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PrivateVaccinesboughtprivately, inboththedevelopedanddevelopingworld,havethehighestmargins.Vaccinesboughtontheprivatemarketareeitherpaidfordirectlybythepatientorthroughaprivatehealthinsuranceprogram.Assuch,competitionisfierce;multinationalswithgoodqualityandsafetytrackrecordsandstrongbrandsareoftenthemostsuccessfulhere.Anewcomerwieldinglowbrandawarenessandanunknowntrackrecordmayfinditdifficulttosucceedinthisarena.

MarketcircumstancessubjecttochangeMany deals to localize some portion of vaccine production come from the agreement of agovernmenttobuyasizeableamountofvaccinesatarelativelyhighprice,exclusivelyfromalocalproducerandtheirtechnologytransferpartner.

Asittakesseveralyearstogetafacilityreadytostartproduction,bythetimethelocalfacilityisupand running the government may have decided to terminate the exclusivity of the purchasingprogramor change theprice itwill buy at due to a host of reasons including a changeof power,budgetcutsorthearrivalofcheapercompetitionontheopenmarket.

The vaccine market is not a free and open market and in fact is very different from typicalpharmaceuticalmarkets1.

Thishassignificantbearingontheviabilityofvaccineproductionandthereforeneedstobetakenintoaccountduringtheinitialphaseofaproject’sfeasibilityanalysis.

3. StepsofVaccineManufacturingProductionEach stage of the vaccine manufacturing process requires significant investment and know-how,withpackaginganddistributionneedingtheleast,andbulkantigenproductionthemost.Ingeneral,themanufacturing process for vaccines ismuchmore complex than it is for pharmaceuticals andnecessitates the use of highly specialized facilities and equipment. Unlike pharmaceuticalproduction, which requires a series of relatively well-understood chemical reactions and physicalmanipulations,vaccineproductioninvolvescomplicatedbiologicalsynthesisstepsthatareoftennotfully understood. Instead, vaccine production often relies on the ability to demonstrate that acertain production process, which has yielded a product shown to be efficacious through clinicaltrials, can be repeatedly followed and controlled. Furthermore, while there are sterile

1 Formoreinformation,pleaseseechapter2,VaccineMarketDynamics,in“VMPAStudy:VaccineManufacturingandProcurementinAfrica”,2017.


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pharmaceuticalproducts,manyofthesterilizationmethodsusedinthemanufacturingprocess,forexample, sterilization of the final product in a vial or ampoule via autoclave, are not possible forvaccines. Finding companies willing to share their know-howwith a newcomer can be an addedchallengeasmostwillbecompetitors.Withatechnologytransfer,acurrentproducerteachesoneormoreofthestepstoalocalproducer,orsellsthelocalproducerpartiallycompletedvaccineforthemtofinish.Manytechnologytransfersarestructuredviabackwards integration - that is, thecurrentproducersellsapartiallycompletedproducttothelocalproducerwhothenhandlestheendoftheproductionprocess(usuallystartingwithdistributionorpackaging).Astheygainexperience,thelocalproducercanmovebackalongthevaluechaininastepwiseandcontrolledmannertothemoredifficultprocesses.Figure1:KeyStagesintheManufactureofVaccines

Vaccinemanufacturing beginswith the production of bulk antigen and endswith distribution of thefinished,readytouseproduct.

A technology transfer partnership includes transferring the handling of a sub-set of thesemanufacturingstepstoalocalpartner.BackwardsIntegrationisacommonlyusedpracticewherethelocalpartnerstartsbyperformingproductdistributionandgraduallyobtainstheknow-howinordertoperformhighervaluesteps(i.e.movinginsequencefromtherighttotheleftintheabovediagram).

Typically, the earlier steps add significantlymore incremental value to the overall product than thelater steps in the process. However since these earlier steps are alsomore technically complex, theearlier in theprocess thata facility initiatesproduction, themore technologicalbarriers thereare tosuccessfulmanufacture.

BulkAntigenProductionThe first step in the process is to produce bulk antigen, the substance that induces the immuneresponseinthebody.Thereareseveraltypesofantigen,withdistinctattributesandcharacteristics.Duetodifferencesbetweenvaccines,theycannotallbeproducedwiththesamemethodorwiththesameequipment.Duetosafetyregulations,somecannotbeproducedinthesamefacility.

Keyvaccinemanufacturesteps

Levelofcomplexity

LOWHIGH

ProductDistribution

QCtesting&productreleasePackagingBulkantigen

productionForm/Fill


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Bulk antigen production is the most cost-intensive step in the chain of processes, and the mostdifficult, especially where mammalian tissue culture is used as the production medium. Table 1depictshowthechoiceofanexpressionsystem−theinitialmethodforproductionoftheantigen−canaffecteverythingfromproductcostandfacilitysizetotheeaseofgainingregulatoryapproval.

Table1:Comparisonofthefourmainexpressionsystemsforbulkantigenproduction

Low High

Speed Mammalian BEVS/insectcell Yeast Bacteria

Cost Bacteria Yeast BEVS/insectcell Mammalian

Typicalyield Mammalian BEVS/insectcell Bacteria Yeast

Post-translationalmodification Bacteria Yeast BEVS/insectcell Mammalian

Regulatoryapproval BEVS/insectcell Yeast Bacteria Mammalian

The expression systems used to produce antigen use bacterial cells, yeast cells,mammalian cells, orinsectcellscombinedwithabaculovirusexpressionsystem(BEVS).

A number of factors are important to consider when choosing an appropriate expression system,including speed of production, cost, yield, ease of introducing post translation modifications (someantigensrequirefurtherbiochemicalmodificationaftertheir initialsynthesis inthechosenexpressionsystem,inordertostimulatetherequiredimmuneresponse),andregulatoryapproval.

Thetableindicates,foreachofthefactorsshown,arelativerankingbetweenthedifferentsystems.Itcanbeseenthatnosingleexpressionsystemcanbeconsideredasanoverall ‘bestoption’sinceeachonehascertainadvantagesanddisadvantages. Inaddition,notallexpressionsystemscanbeusedtoproduceallantigenssotheoptionsavailablealsodependontheparticularvaccinetobemanufactured.

Next, the antigen is harvested and isolated from the materials used to grow it. The antigen isisolatedviapurificationprocessesusuallyinvolvingcentrifugation,chromatographyand/orfiltrationresultinginpurifiedantigen;theexactprocesswillvarybetweenvaccines.

Vaccines can be monovalent (containing a single antigen, protecting against a single strain ormicroorganism)ormultivalent/polyvalent(containingtwoormoreantigens,protectingagainsttwoormore strains ormicroorganisms). Producingmultiple types of antigen can requiremuchhigherinitial costs and larger facilities than producing a single type. Different production methods alsorequire different infrastructure which can have very significant impact on the associatedinfrastructurecosts.


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Formulation/Fill(Form/Fill)The purified antigen (or drug substance) then undergoes formulation: it may be combined withadjuvants to enhance immune responses in the body, stabilizers to ensure the product remainspotentuntil it isadministeredand, in thecaseofmulti-dosevials,preservatives toensuresterilityovertheentirecourseofadministrationtomultiplepatients.

Thisfinallyformulatedbulkvaccine(ordrugproduct)isthenfilledintovials,plastictubes,ampoulesor syringes. Some vaccines which are not stable as liquids at room temperatures are lyophilized(freeze-dried) at this stage, adding an extra layer of cost/complexity. Lyophilized product alsorequiresthevaccinetobedistributedwiththeappropriatediluentsoitcanbereconstitutedlater,priortoadministration.

Finally, eachvialmustbevisually inspected toensure itsphysical integrityand that thevaccine isfreeofnoticeableforeignparticlesandtherearenoissueswiththeproduct’sappearance.Eachofthese form/fill processes must be carried out under strict temperature and sterility controls inspeciallydesignedcleanrooms.

Because the formulation and fill process is broadly similar for most vaccines, multiple types ofvaccinecanoftenbeformulatedandfilled inthesamefacility.However,therearestillrestrictionsregardingwhichvaccinescanshareform/fill facilitiesforsafetyreasons.This is furtherexplored inbothAppendices1and2.

Packaging,ColdChainandDistributionThe filledand inspectedvialsmust thenbepackaged,undergo finalqualitycontrol release testing(thelaststepofthequalitycontrolprocess,sinceQCtestsoccurthroughouttheaboveprocessesaswell)andbedistributedtodoctorsandhospitalsbeforefinallybeingadministeredtopatients.Thequalitycontroltestsincludeanalysingasampleofthefinishedproducttoensureithastherequiredpotency,purity,concentrationofkeyingredientsandsterility.Therangeandtypesoftestsaswellastheirlevelofcomplexitywillvarybetweenvaccines.

Temperaturemustbestrictlycontrolledandmonitoredfrommanufacturingallthewaythroughtoadministration to thepatient,a concept referred toasacoldchain.Most liquidvaccinesmustbekeptrefrigerated(typicallybetween2-8°C)foreachstep.Lyophilizedvaccinesaretypicallystoredfrozenat-20°Corlowermakingforamoreexpensivecoldchain.

ProductRegistrationandClinicalTrialsTheproductregistrationrequirementsvaryworldwideandthusshouldbeinvestigatedonaproduct-by-productbasisforagivenregulatoryagency.Acriticalfeatureisthatunlikedrugs,whereacopyofan existing drug can be approved without clinical trials (generic drugs), in most cases vaccinesrequire the fully fledged phase I, II and III clinical trials process to demonstrate safety,immunogenicityandefficacy.Thisisthecaseevenwhenthevaccineisacopyofanexistingproduct.


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The time required to conduct these studies, aswell as their cost, can be amajor barrier for newentrantstothisfield.

Currently roughly 30-40 countries manufacture vaccines. Countries with experience in vaccinemanufacturing are more likely (but not guaranteed) to have regulations in line with globallyrecognizedstandards,suchasthoserecommendedbytheUS,EUorWHO.

Regulators from countries new to vaccine manufacturing are less likely to be familiar with theregulationsspecifictoregisteringatransferredvaccine(essentiallyanewproduct)andnewvaccineproduction sites. Sometimes, this can result in either an overly permissive environment or onewhere producers are held too strictly to the letter of a regulation instead of being able toscientificallydemonstratetheyeffectivelymeetitsintent.

Vaccinemanufacture involves the production of purified antigenwhich is then filled alongwithotheringredientsintosterilecontainersundercleanroomconditions.

The vaccine is then packed, tested and distributed to doctors and hospitals all under stricttemperaturecontrolandmonitoring.

A technology transfer occurswhen an incumbent vaccine producer teaches a local firm how toperformaportionofthemanufacturingstepsrequiredtomakeavaccine.

The effort required to register this locally produced vaccine in its targetmarketswill vary fromproducttoproductandcountrytocountrybutmayrequireadditionalclinicaltrialsinsomecases.

Thisadditionalscopeofworkmayaddasignificantamountofcostandtimetoaproject.

4. FacilityDesignConsiderationsWhenconsideringthecommercialviabilityofvaccinemanufacture,keyconsiderationsinclude:

1. Facilitytypeandscope2. Productiondemandforecast

Thefirsthassignificantbearingonthetimeitwilltaketoreachcommercialoutputandthereforethenumberofyearsthat investmentisrequiredbeforemovingintoapositivecashflowsituation.Thesecondhasamajorimpactontheongoingcostofmanufactureoncethefacilityisfullyoperational.It alone can impact the ability to repay initial investment costs relating to facility design andconstructionsincethe initial levelofprofitability isakeydeterminantoftherateatwhichupfrontfacilitydesignandconstructioncostscanberepaid.


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One of the most common mistakes is for companies to rush ahead and begin building a facilitywithoutfullycompletingtheearlierplanningstepsorFrontEndLoading(FEL).InordertoconductasuccessfulFEL,bothofthepointsaboveneedtobeexploredandintegratedtogethertodetermineaproject’s financial feasibility.Accordingto industrybenchmarking,conductingarigorousFELphasehasbeenshowntodecreaseprojectcosts,irrespectiveofprojectsize,byanaverageofupto20%2.AstheFELphaseprogressesandthemarketdemandandprojectscopebecomebetterdefined,itiscrucialtocontinuouslyverifythatthebusinesscaseremainsfinanciallyviable.AlargepercentageofprojectsoftendonotmakeitthroughthefullFELphaseduetolackoffinancialviability.

Figure2:NewFacilityCapitalProject:Stage-by-StageBreakdown

Capitalprojectteamhandsovercontrolandoperationsoffacilitytositeemployeeswhowillrunthecommercialproductionoperations

Officialverificationthroughtestingthatthefacility,operatorsandequipmentcanproducesafeandefficaciouscommercialbatchesreliablyandconsistently

Final in-situ testing of process equipment and utilities to ensure all items meetrequired technical specifications and all regulatory expectations necessary forfacilityapproval

Preliminary in-situ testing of process equipment and utilities to ensure all itemsmeetrequiredtechnicalspecifications

Constructionoffacilityaswellasinstallationofallpreviouslyprocureditems

The specification, purchase and delivery of equipment, architectural fittings andutilitysystemsfromvariousvendors

Complete design of project that enables the facility and all its contents to beprocuredandconstructed

A final validation that the final optimal scope of a project (determined bycompleting∼25%ofthedesign)meetstheintendedbusinessdriverspriortofullyfundingtheproject

Determine potential scope options for a project and confirm that the projectdriversanddeliverablesareastheyweredepictedduringinitiation

Startswithidentificationofbusinessdriversthatjustifytheneedforanewcapitalprojectandendswithapreliminarybusinesscasebeingcompleted

2http://www.pwc.com.au/industry/energy-utilities-mining/assets/miningcapitalprojects_nov08.pdf


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Duetothenumberofvariables, it isnotpossibletogiveanaccuratecost foreachtypeof facility.The type of vaccine produced, facility location, construction methodology, type of equipment,regulatoryrequirementsandproductionvolumecanallhavesignificanteffectsonthefinalcost.

This document examines the feasibility of commercial-scale facilities. Lab-sized facilities follow asimilarprocessbutonatotallydifferentscalewhichwillnotbecoveredhere.

The planning and building process shown below covers the work necessary to design, build andreceive regulatory approval for a facility. However, new products beingmade in this facilitymayrequireadditional testing inorder for theproducts themselves togain regulatoryapproval.Pleaserefertothesectiononproductregistrationandclinicaltrialsformoredetails.

ScenarioAnalysisSummaryScenarioanalysesexaminingfourtypesoffacilityindetailcanbefoundinAppendix1;asummaryisprovided here. Using a matrix approach, the four examples fit into four quadrants according toproductionvolumeandwhetherthefacilityisfullyintegratedorform/fillonly.

Table2:ScenarioAnalysis:Usingfourexamplestocreateaboundeddesignspacethatcanbeusedtoestimatecost,timelineandscopeforarangeofsmallvaccinefacilities

Facility\Volume Low(10mdose/year) High(30mdose/year)

Fullyintegrated COST:~$30-65MillionTIME:3.5to7years

FacilityDetails:● Modularfacility● Capableofmaking10Million

dosesperyear● 1-3valentproduct● Averageantigenfermentation

efficiency● Singledosevials● Bulkproductionusingmostly

singleusetechnology(SUT)● Form/fillwithreusablestainless

steelequipment● Manualvisualinspectionand

packaging● Basedonatheoreticalfacility

COST:~$105to225MillionTIME:7-10years

FacilityDetails:● Stickbuiltfacility● Capableofmaking30Milliondoses

peryear● 4valentproduct● Bulkproductionusingmostly

Stainlesssteel● Form/fillwithreusablestainless

steelequipment● Basedonrealtechtransferusing

publicallyavailableinformation

Form-fillonly COST:~$14-29MillionTIME:2.5to5years

FacilityDetails:● Basedonfacilityabove,without

bulkproduction● Staffandfacilitysizehasbeen

reduced● Bulkantigentobeimportedfrom

technologytransferpartner

COST:~$46to98MillionTIME:5-7years

FacilityDetails:● Estimatedcostifabovefacilitydid

nothavebulkproduction● Bulkantigentobeimportedfrom

technologytransferpartner


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The costs in thematrix are given asorder ofmagnitude estimates, that is, ranging from -30% to+50%oftheestimatedvalue.Thesecostsdepictthebaselinecosttodesign,buildandstartupthefacilitybutexcludeotherkeycostswhicharefurtherexplainedintheAppendix1.

The project durations depicted represent the time from start of Basis of Design to the start ofcommercialproductiononaproductwithminimallocalregistrationrequirementsandassumesclearandefficientdecision-making,awellexecutedFELphase,sufficientstaffingandnosignificantdelays.

MoredetailedcostandtimelinebreakdownsfortheseexamplescanbefoundinAppendix1.Theseare provided as a guide only; there are dozens of variables involved, and this is no substitute formakingacase-by-casecalculation.

LowVolumevsHighVolumeProduction volume is determined by the capacity and utilization of the facility. A small-scalecommercial facility, run at low to moderate utilization, can produce around 10m doses/year -enoughforoneproductforaregion,ortwoorthreeproductsforacountry.Italsoleavesopenthepossibility of increasing production in the future. It is not typically financially viable for a singlecommercial facility to produce lower volumes than this as the underutilization of facilities andequipmentisusuallytooinefficientinrecoupingtheinitialinvestment.

Theupperrangeofacommercialfacilityforwhichmostnewcomersoptwouldproducearound30mdoses/year. This higher capacity compared to the low volume facility would be due to higherutilizationofthefacilityand/orlargercapacityequipment.Withatechnologytransfer,itmaynotbepossible to go straight into high volume production since established producers can be wary ofpartneringwithlocalproducerswithoutexistingtrackrecordsorwhoselargeproductionscalewouldcannibalizetheirownsales.

Thecostofafacilitydoesnotscalelinearlywithproductioncapacity,evenifallotherfacilitycostingvariablesremainconstant.Thefillingequipmentusedina10mdose/yearfacilitycanberuntwiceasoften to double production volumewithout doubling the required initial investment. Usingmultidose vials also increases production volume for a given piece of filling equipment. Producing apolyvalent vaccine versus amonovalent one can severely change theoutput of your bulk antigenproductiononadoseperyearbasis.Theestimatedrequiredproductionvolumeofafacilitycanbeassessedfromthebirthcohortofthetargetcountry.Beawarethatmanyvaccinesrequiremultipledosestobeadministeredtoapatientinordertoprovidetherequiredimmunity.

FullyIntegratedvsFormulation/FillWhileproducingthebulkantigen(i.e.fullyintegratedfacility)offersthegreatestreturns,aform/fillonlyfacilitycanbebuiltforroughly35-45%oftheinitialinvestmentofafullyintegratedfacility.

Advantages to the form/fill only or form/fill first approach typically include relatively fewerregulatory requirements, shorter project durations and the chance to build a track record with


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partnersandsuppliers.Italsooffersflexibility-oneform/fillfacilitycantypicallyprocessmoretypesofvaccinethanonebulkfacility(seeAppendix2forfurtherexplanation).

Themaindisadvantagetoform/fillisbeingdependentonasupplierforthebulkantigen.Thiscanbeup to 90%of the cost of the vaccine, and up to 60-70% is not unusual. Pricing of bulk antigen isopaque and can be freely set by bulk supplierswhomay be keen to encourage or discourage itspurchase.

ProjectDurationThematrix above gives a sense of the cost and duration to complete a project via a backwardsintegration technology transfer strategy. Many companies opt for a backwards integrationapproachinordertoenablethemtogetaviableproductonthemarketassoonaspossible.Italsoallowstheworktobespreadoutoverafewextrayearssoastonotoverwhelmthelocalproductionpartner (see Appendix 2 for more information on this). Thus the time to complete a backwardsintegrated project for a given facility scope can vary depending on how large a gap is plannedbetweenthedifferentphasesof thetechnologytransfer.SeeAppendix1 formore informationonhowthedifferenttimeframesabovewereestimated.Thetimetocompleteafacilityisalsodirectlylinked to the construction methodology chosen for the project. Projects starting “from scratch”,wherefullpreclinicalandclinicaldevelopmentarerequired,generallyextendfrom7tomorethan10years.

ConstructionMethodologyNotethatthechosenconstructionmethodologycangreatlyimpactonthefinalcostofthefacilityaswellasthetimetocompleteit.Twoimportantconsiderationsforanewfacilityarewhetherornottousesingleusetechnology (SUT)andwhether the facilitywillbestick-built (constructedonsitefromscratch)ormodular(constructedoffsiteandbroughtinasdiscreetpiecestobeassembledonsite).

These methodologies and some of their extensive advantages and disadvantages are furtherexploredinAppendix2.Forthepurposesofunderstandingtheexamples:SUTallowsforlowerinitialcostsbut increasesoperatingcosts,modularfacilitiesaremoreexpensivebutfasterto install thanstick-built facilities, andmodular facilitiesmaybe theonly availableoption in countrieswithout alocalworkforcewiththespecializedconstructionskillsneededtobuildavaccinefacility.

It is extremely important to carry out and heed the recommendations from a robust front endfeasibilitystudythatiscontinuouslyupdated.

Form/fillonlyfacilitiescantake1-3yearslesstocompleteandtypicallycostlessthanhalfasmuchasfullyintegratedfacilities.

Timelinesandcostsforanyfacilityarealsoheavilydependentonthetypeandsizeoffacilitytobeconstructed.


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5. ChallengesNewcomers tovaccineproductionwill facesignificantbarriers toentry.Someof thechallenges toconsider are listed here, and an expanded list of challenges and considerations can be found inAppendix2.

InitialInvestmentAny vaccine production facility requiressignificant capital, of an order of tens orhundreds of millions of dollars for acommercial production facility. See theappendices fordetailedbreakdownsof initialinvestmentcoststoconsider.

OperatingCostsVaccine production facilities have relativelyhigh operating costs, especially for rawmaterials, skilled personnel and tocontinuously operate the utilities and cleanrooms.Manyofthesecostsoccurevenwhenproduct is not being manufactured. A largeproportionoftheoperatingcostsisattributedto fixed cost that is a function of the facilitydesign.

ProjectDurationsGetting commercial production up andrunning for a fully integrated facility takesyears even if everything goes according toplan. During this time, there is usually no orvery limited income until both productregistration and commercialization arecomplete.

IndustrialClusterLack of other vaccine manufacturers in theregion makes it hard to get supplies, skilledworkersandtechnicalsupport.

CompetitionThere is enormous global pressure tocontinuously lower vaccine pricing. Many

older and larger firms have already paid offtheir facilities and can sell some portion oftheirproductionvolumenearoratthecostofgoods. The private and developed worldmarkets that offer the most profit faceintense competition from established andwell-reputedcompanies.

LimitedPartnershipOpportunitiesVaccine production is difficult and manycompanies will be reluctant to investresources to transfer their knowledge orsupply product to a new and unprovencompanywhocouldbeacompetitor.

HiringandTrainingPersonnelHiring foreign experts to work in key facilitypositionsisoftennecessary.Manymayexpectsalaries on parwith their current position ormay have to be paid an additional premiumdepending on the desirability of the facilitylocation. Local skilled workers will requiresignificant training which may include beingsentabroadformonthsatatime.Companiesaround theworld tend to underestimate thetime and cost of finding and training theirlocalandexpatworkforce.

ChangestotheLandscapeOverTimeGiventhelengthydevelopmentprocessthereis a risk that awell documentedneed at thetimeofstartingaprojectmayno longerbeaneed by the time the vaccine is approved,resulting in a smaller or absent market.Developers should therefore assess theprojectedneedsonacontinualbasis.

Anumberofotherfactorsneedbetakenintoaccountduringtheevaluationandplanningprocess,andhavesignificantimpactontheoverallprobabilityofprojectsuccess.


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6. NextStepsFurtherinformationandadditionalreadingThiswhitepapercontainsthreeappendiceswithfurtherinformation:

Appendix 1 contains more details of the facilities referenced above in the scenario analysis,complete with cost breakdowns and timelines. This is no substitute for conducting a detailedanalysisandverifyingcostswithvendors,buttheseanalysesdescribethemethodologybehindtheexamplesdescribedinsection4,providingthereaderwithanideaofhowestimatesshouldbebuilt.

Appendix2includesalistofmany(butnotall)the“OtherConsiderations”tobeinvestigatedfurtheraspartofapreliminaryfeasibilitystudy.Itishighlyrecommendedtoconsultwithvaccineexpertsatthis stage since the exact scope of a project will vary considerably from country to country andproducttoproductinwaysthatcannotbecoveredinthisprimer.

Appendix3containsaglossaryofterms.

Tworelateddocuments,describedinsection1,provideadditionalreadingmaterial:

VMPAStudy:VaccineManufacturingandProcurementinAfrica(2017)

Commercialisingvaccines:Amethodologytoidentifypotentialmarketopportunitiesandconductoutlineassessments(2017)

EnlistingofexpertstoinformdecisionmakingAs outlined in this paper, there are common, usually adopted approaches when considering theestablishmentofvaccinemanufacturingandcertainelementswillalwaysneedtobeincluded.Thesesteps,aswellasotherswhichcome intoplay, involve the inputofexpertiseandbespokeanalysisgiven the highly specialized and technical nature of vaccine manufacturing and the nature anddynamics of vaccine procurement. Therefore, concrete next steps in the process typically involveengagement with appropriate sources to receive the required input and allow well informed,strategicallysounddecisionmaking.

Inparticular,therearethreekeytypesofexpertisethatwouldneedtobeengagedtoworkthroughthislistof“OtherConsiderations”:

VaccinesMarketsandCommercialSpecialist● Forecast global competitiveanddemand landscape in thevaccines industryat the

timeofcommerciallaunchofplannedfacility+5to10years.● Assess likely competition, targetmarkets, futuremarketdemand,expectedpricing

andpotentialpartners.


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VaccinesFacilityandManufacturingSpecialist● Helpdetermineyourfacilityscope,costs,sizeandcapability.● HelpdeterminethetechnicalmeritofpotentialTechnologyTransferPartners.● Leadcostanalysestodeterminewhichtypesoftechnology(SUT,Pre-sterilizedvials

andsyringes,modularconstruction,etc)touse.● Leadearlyfacilitycost,timelineandCOGestimationwork.

VaccinesDevelopmentandRegistrationSpecialist● Help to determine and manage regulatory agency expectations for product

developmentandfilinginyourtargetmarket(s).● Helptodeterminecostanddurationofanyproductdevelopmentworkthatmaybe

necessary.● Engage regulatoryagency inearly, science-baseddiscussionson their expectations

toregistertheproductinthemarket.

Theabovelistisnotanexhaustiveone,andotherareasofexpertisearealsolikelytoberequiredasthedecisionmakingprocessevolves,butitrepresentsalogicalstarttotheanalyticalworkrequired.

Readers may want to refer to further related documents including the VMPA Study: VaccineManufacturingandProcurementinAfrica.

Moreduediligencebeyondthescopeofthisdocumentshouldbecarriedout,muchofwhichwillrequireexperiencedvaccineexperts.


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Appendix1:Scenarioanalysis:considerationofprojecttimeandinvestmentcost

Asetoffourdifferentprojectscenarioswascompiledinordertogivethereadergeneralguidelinesfor thework necessary to complete a small commercial vaccines production facility. The range inscopeandsizeoftheprojectsdepictedherecanbeusedtocreatearoughestimateoftheprojectcost and duration necessary for many of the types of facilities a company new to vaccinemanufacturing may be considering. Whilst there is no replacement for conducting one’s ownbespokeprojectestimate, theseexamplesmaygive the readerabroadestimate thatcanbeusedpriortobeginningthefirststageofFEL.Thefourtypesoffacilityareasfollows:

1. Lowvolume/fullyintegrated2. Lowvolume/form/fillonly3. Highvolume/fullyintegrated4. Highvolume/form/fillonly(adaptedfromhighvolume/fullyintegratedscenario)

Scenarios1&2:LowVolumeFacilities

Thissectionwillexplorea“generic”lowvolumefacility.Genericinthiscaseindicatingthatitcouldbebuilt ina rangeof countries,producinga relatively simple liquidvaccine,withabulk facilityofaveragefermentationefficiency.Changinganyofthesefactorscansignificantlyaffectthefinalcost.Amodularbuildwaschosen for theexamplesince thecostofmodular facilities is relatively staticbetweencountries.

FacilityDetails:● 10milliondose/yearproduction● 1-3valentproduct● Liquidfilledproductinasingledosevialorsyringe● Modularbuild● Manualvisualinspectionandpackaging

The same facilitywill be considered inboth fully integrated (producingbulkantigen)and form/fillonlyconfigurationstobestshowhowcostsandprojectdurationsdiffer.


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FacilityCosts:

Table3:Adetailedbreakdownofthevariouscosts^associatedwithbuildingthesefacilities

Description Size(Bulk) Cost(Bulk)^ Size(F/Fonly) Cost(F/Fonly)^

BulkFacilityModularfacilitywithsingleusebioreactors

2x2,000-4,000LBioreactors

$20000000 N/A N/A

Form/Fill

Modularfacilitywithtraditionalfillerandstainlesssteelformulationsarea

200-300VPMfillingmachine

$12500000200-300VPMfillingmachine

$12500000

InspectionandPackaging

Stickbuilt*lightdutyindustrialbuilding

~100m2 $500000 ~100m2 $500000

WarehouseStickbuilt*generalwarehouseandcoldstoragearea

2500m2warehouse,100m2coldstorage

$30000001000m2warehouse,100m2coldstorage

$2000000

QA/QCLabStickbuilt*facilitywithimportedanalyticalequipment

100m2 $1000000 65m2 $650000

OfficeBuildingStickbuilt*officefor~halfofskilledworkforce

10m2perperson:500m2

$100000010m2perperson:320m2

$640000

Labour

Gradualrampuptofullemploymentoverthecourseoftheproject(seebelow)

~130people $5015000 ~64people $2950000

TotalFacilityCost: $43015000 $19240000

OOM-30%to50%estimate:

$30.1-64.5m $13.7–28.9m

*Stick-builtpricesarebasedonAECOMConstructionHandbook3pricing

^Thesecostsinclude:• Equipmentpurchase• Engineeringcosts• Moduleconstructionandinstallation• Basicprocessdevelopmentandvalidation(seeprojectdurationsectionbelow)

Theyexplicitlyexcludethefollowing,whichwillbebrieflydiscussedinAppendix2:• Landpurchaseanddevelopmentcosts• Permittingcostsanddurations• Facilityoperatingandcarryingcosts• Clinicaltrialsorotheradvancedproductdevelopmentorregistrationactivities• Inflation,thetimevalueofmoney,borrowingcosts,depreciationandtaxes

Thisisnotanexhaustivelistofallpotentialprojectcosts

3 AfricaProperty&ConstructionCostGuide2017,www.aecom.com


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LabourCosts:The cost of labour has been estimated fortwo shifts a day and a skeleton night crewon an annual basis. To estimate the labourcosts pre-production, a percentage of thefinal full employment cost is used,increasingasthefacilitynearscompletion.

Forthepurposesofthiscasestudy,atypicalwage found inmiddle-incomecountries forskilled ($25000pa) andunskilled ($10000pa)labourwasused.Inpractice,thecostoflabour will vary significantly betweencountries.

ProjectDuration:The project durations depicted represent the time from start of Basis of Design to the start ofcommercial production. This timeline shows theminimumpossible time to get both thebulk andform/fill facility up and running: 4.5 years. In this case, the project is structured so both facilitiesstartproductionatthesametime(i.e.notviabackwardsintegration).Thisistypicallyhowaprojectwouldbestructuredforacompanythathasdevelopedavaccineandisbuildingcapacitytosupplytheinitialcommerciallaunchofanewproduct.

Itwouldbehighlyunlikely that a technology transferwouldbe structured in thisway.Most localproducerswould find this tobe toomuchwork to takeonatonceandmayopt for abackwardsintegration strategy. Inpractice, thismeans theywould stagger thebuildingof each facility – theform/fillfacilityisconstructedfirstandthuswillstartoperatingbeforethebulkantigenfacility.Thegap of time between the form/fill only and fully integrated production can vary according to theprojectexecutionstrategy.Becauseofthisvariationinhowlongtheprojectcouldbe,thedecisionwasmade to depict the overall timeline in themanner below so the reader could determine forthemselves the required gap between the two phases of the project. See Appendix 2 for someadvantagesanddisadvantagesofbackwardsintegration.

Inanycase,thetimelineforeachfacilityonitsownshouldbeconsideredabest-casescenariowithamoderatelevelofprocessdevelopment/definitionandminimaltimeforvalidationandregistration.Late changes in design, difficult process development, breaking the project into three or morephases(i.e.packagingfirst,thenform/fill,thenbulkantigen)ortherequirementformoredetailedclinicaldata canextendorevendouble this timeline.Conditionsexternal to theproject suchas adelayintheawardofagovernmenttenderoralackoffundingmid-projectcanalsocausedelays.

Table4:EmployeeNumbersandCosts

BulkandForm/FillFacility(numberofemployees/dept)

Form/FillonlyFacility(numberofemployees/dept)

GeneralLabour 20 15

TotalUnskilled 20 15

AdminandManagement

18 12

Production 67 36

Quality 15 10

TechOps/Engineer 10 6

TotalSkilled 110 64

TotalAnnualCost: $2.95m $1.75m


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Table5:Breakdownandcomparisonofconstructiontimelinesforbulkversusform/fillfacilities

Year1 Year2 Year3 Year4 Year5 Year6

%fullemployment

10% 15% 20% 25% 30% 40% 50% 50% 100%

BulkFacility(4.5years)

FacilityDesign

FacilityConstruction

C&Q

ProcessQual.**

ProcessDef.***

ValidationandRegistration

StartProduction

Form/FillFacility

(3.5years)

ValidationandRegistration

ProcessDefinition

ProcessQual.**

C&Q*

FacilityConstruction

FacilityDesign

%offullemployment

20% 30% 30% 40% 50% 50% 100%

*CommissioningandQualification**ProcessQualification***ProcessDefinition

Scenarios3&4:HighVolumeFacilities

Asanexampleofahighvolumefacility,usingpubliclyavailablefigures,thisscenariowillconsideranactual case study - the currently ongoing technology transfer started in 2013 between a majorpharmaceuticalcompanyandaprominentsemi-publicSouthAmericanbiopharmaceuticalproducer.Referencesusedarelistedattheendofthesection.

Facilitydetails:• 30milliondose/yearproduction• 4valentproduct• Liquidfilledproductinasingledosevialorsyringe• Stickbuiltfacilitysituatedonexistingsitewithothervaccineproduction

Thisexamplewaschosenasanupperlimittowhatisfeasibleforanewcomer.Thisproducerhasanestablishedtrackrecordasanexperiencedmanufacturerofvaccinesandothersterilebiologics,andthusisanobviouscontenderforatechnologytransfer–anadvantagethatanewcomertothesector


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maynothave.Theyalsohavetheadvantageofarelativelymaturemarketbothfromaregulatoryagencyperspectiveandthepresenceofalocalclusterinbiologics.

This example is of a fully integrated facility, however a rough rule of thumb is that the cost of aform/fillfacilityisapproximately35–45%ofitsfullyintegratedcounterpart.

FacilityDetailsandCosts:The annual reports state that thenew facilitywould cost approximately $150m. It is projected toproduce 30 million doses/year of a 4-valent vaccine. It is important to note that while this isapproximatelythreetimesascostlyandthreetimesasproductiveasourlow-volumeexample,thecostsinvolveddonotscalelinearly.SeeAppendix2:OtherConsiderationsforfurtherexplanation.

Inthiscase,somefactorsthatmaycontributetotherelativelyhighfacilitycostinclude:● Stainless Steel Facilities. High output operations tend to use stainless steel bulk and

form/fillwhichincurahigherupfrontcost.Additionally,astheexistingtechnologytransferprocessisinstainlesssteel,itismostlikelytobetech-transferredinthesameway.

● Large Bulk Facilities. The vaccine being produced is a quadrivalent recombinant vaccine,whichrequiresrelativelylargebulkfacilities.

● Location.Thefacilityisbeingbuiltinarelativelyhighcostlocation,whichaffectslabourandconstructioncosts,especiallyforstick-builtbuildings.

This cost most likely contains all equipment and construction costs to build on the existing site.However, as theexisting site is largeand semi-public, it isunlikely that the localpartner facedanadditionallandpurchasecost.

LabourCosts:The South American producer is well-supported by the government of its host country. As thissupport extends tomany staffmembers’ salaries, they havemost likely not been included in thefinal cost. Additionally, although there will be a sizable amount of work required from thetechnologytransferpartnerandtheirstaff,thesecostsandsalariesarealsonotincludedinthecostestimate.

ProjectDuration:Itappearsthatthetechnologytransferhasbeenstructuredasareverseintegrationin4stages:

1. Importationoffinishedproduct2. Localtestingandreleaseofimportedproduct3. Form/FillandPackaging4. Bulkantigenproduction

In 2013, it was estimated that the technology transfer would take 5 years to complete. Recentarticles indicate that the process may be moving even more slowly. In general, 5 years is anaggressiveapproachforthistypeofdeal.Atypicalestimateforthistypeofworkwouldbecloserto7-10yearstocompletefulllocalization,whichseemstobemorealignedwiththecurrentprogress.


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Asofthelatterhalfof2016,thesecondstageofthetechnologytransferhadbeencompleted.Thisshows thatevenanexperiencedcompanywithmanyadvantagesmaystillwrestlewithhighcostsandexpandingtimelines.

References

1. http://www.fundacaobutantan.org.br/relatorios-anuais/Documents/Relat%C3%B3rio%20Funda%C3%A7%C3%A3o%20Butantan_2013.pdf



4. http://www.saude.sp.gov.br/ses/perfil/cidadao/homepage/destaques/sp-avanca-para-se-tornar-produtor-nacional-da-vacina-contra-o-hpv


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Appendix2:OtherConsiderations

Newcomerstovaccineproductionfacesignificantchallenges,eveniftheypasstheinitialfeasibilityassessment.

ThisAppendixwill exploreother considerations to keep inmindwith thehelpof vaccineexperts.Thisisnotanexhaustivelistbutcanbeusedasastartingpoint,fromwhichavaccineexpertwillbeabletoexpand.

BackwardsIntegrationAsmentioned in themain document,manynew vaccinemanufacturers choose to use backwardsintegrationwhenstartinganewfacility.Workinginthiswayisrecommendedandcomeswithmanyadvantages.Vaccineproducersoftenstaggerthetimelineofeachstage.

Advantagesofbackwardsintegration:

FasterReturnon Investment:Projectsat thelower end of the value chain are faster andcheaper to implement. By completing themfirst, the facility can start bringing in moneysooner.

Lower regulations burden: Regulations aremore stringent further up the productionchain.

Step-by-step learning: Each new processbuildsonpreviousknowledge.Thetechnologytransferpartnermayalso insistonadelaysothe new producer can prove they areperforming well enough to move further upthevaluechain.

Flexibility: Easier to change overallproductionstrategyasonelearnsmore.

Spreadoutthework:Executingoneprojectata time can greatly reduce project risk andcomplexity.

Disadvantagesofbackwardsintegration:

Restrictions:Technologytransferpartnerscanimposerestrictionsonthequantityofproductmanufactured,orwherethefinalproductcanbesold.

Lower margins: The most difficult processesand the last to be taught have the highestmargins.

Supply insecurity: A facility working on thelatter part of the production chain reliesheavilyontheirsupplier.Globalshortagesofaproduct may leave such a facility without areadilyavailablesupply.

Longer timeline: Each step of the processtakeslongertogetupandrunning,stretchingoutthetotaltimeline.

Delayed know-how transfer: The localpartnerandcountrymustwaitlongertolearnhowtoperformthemostcomplexprocesses.


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ChangingcircumstancesManydealstolocalizesomeportionofvaccineproductionarisethroughagovernmentagreeingtobuyasizeableamountofavaccineata relativelyhighprice,offeringexclusivity foracertain localentityandtheirtechnologytransferpartnertoproducethisvaccine.

Intheory,thisisawin-win-windealforallparties:● Global technology transfer partner gets exclusivity and does not have to compete for

tendersinfutureyears.● Local company gets a guaranteed revenue stream and an interested technology transfer

partner.● Governmentensuresinvestmentinlocal industry,accessesnewandbettertechnologyand

buildsaplatformforanewindustrysectorintheircountry.

However, inthetimeittakestobuildthisnewfacility(5-10years),thegovernmentmaydecidetoscraptheexclusivityorpurchasingprogramorchangethepurchasingpriceduetoahostofreasonsoutoftheproducer’scontrol.Suchreasonsincludeachangeofpower,budgetcutsorthearrivalofcheapercompetitionontheopenmarket.

Landpurchase,permittinganddevelopmentLandcostsanddevelopmentcostsvarywidelyfromcountrytocountryandfromlocationtolocationinagivencountry.InNorthAmericaandEurope,itisnotuncommonforthesitepurchaseandlanddevelopmenttocosthalfasmuchasthetotalcosttodelivertheproductionfacilityitself.

Aslandpurchaseanddevelopmentcanmakeupsuchalargepercentageoftheoverallprojectcost,the chosen site for productionmust be extensively investigated. Costs for land development of agreenfieldfacilitywillusuallyexceedthoseforbrownfieldfacilities.Landdevelopmentwillincludethingslikesiteterrainleveling,runningconnectionstomainsutilitiestoyourproductionsite,roadsandotherinfrastructuresuchaswallsandfencing.

Permitting costs and timelines also vary significantly between countries and should be taken intoaccountduringplanning.TheWorldBank:DoingBusinesswebsiteisfullofusefulinformationaboutpermittingaroundtheworld4.

ModularvsStickBuiltFacilitiesFacilitiescanbe“stick-built”,i.e.,builtonsitebyaconstructioncrew,ormodular,whereindividualpiecesofthefacilityarebuiltoffsiteandthenlaterassembledonsite.

4http://www.doingbusiness.org/data/exploreeconomies/south-africa/dealing-with-construction-permits


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Modularfacilitiesaremoreexpensivebuthaveseveraladvantages.• More predictable costs: The cost of traditional or “stick-built” facilities can vary widely

acrossasingleregion,letaloneglobally.Thecostofmodularfacilities,astheyarebuiltinamorecontrolledenvironmentbyexperts,variesfarless.

• Less relianceon localenvironment: Ina countrywithoutother similar facilities, itmaybedifficult to find a construction company able to build the facility to the appropriatestandards, as it relies on the ability to locally source not only high quality constructionmaterials but also a highly skilled workforce with experience in dealing with the highlytechnicalaspectsoftheconstructionproject.

• Convenience: Most equipment is installed before shipping to site, so once the facility isassembledtheconstructionisalmostcomplete.

• Faster:Typicallyfasterandmorepredictableconstructiontimelinesincetheyarebuilt inacontrolledenvironmentbyhighlyexperiencedpeople.Constructioncanactuallybeginwhileconstructionpermitsarebeingobtained.

Inasituationwhereitisessentialtostartproductionasfastaspossible,amodularfacilitycanbeagood choice. However, all things being equal, choosing a stick-built facility makes sense if it ispossibletosourcealltheskilledlabourlocallyorifthereisnoneedtopayapremiumtocompleteconstructionatafasterrate.

Anotheroptionnotmentionedinthemaindocumentisdoingaretrofitofanexistingfacility.Ifitispossibletoreusesectionsofanexisting facility, thiscansignificantly lower initial investmentcostsandprojecttimelines.

OperatingCostsVaccineproductionfacilitieshavehighongoingcosts.Skilledpersonnelmustberetainedandutilitiesand clean roomsmust be kept up and running.Manyof these costs are incurred evenwhilst notmanufacturingproduct,fromthebeginningoftheprojectphase.Vaccinesalsorequirecostlyhigh-quality production inputs (consistent municipal utilities, raw materials, sterile consumables, etc),whichcanbedifficulttoobtainconsistentlyincertainregions;companieshaveshutdownbecausetheseoperatingcostswereincorrectlycalculatedandnotsupportedbythemarketprice.

SingledosevsmultidosevialsThecostestimates in thisdocumentarebasedonsingledosevialsorsyringes.Manyvaccinesarefilled into multi-dose vials (anywhere from 5-20 doses per vial), which allow a lot of increase incapacity without changing the filling equipment. Most commercial fillers can fill both single andmultidosevials.

SingleUseTechnology(SUT)vsstainlesssteelsystemsIn a traditional vaccine manufacturing facility, everything that would come in contact with theproductwouldbemadeofstainlesssteel.Thiswouldincludeallproductionvessels,transferpipingandprocesscontrolinstrumentation.


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However, advances over the past 10-15 years have made it possible to replace many of thesestainless steel systems with single use plastic and polymer film systems. Another relatively newinnovationispre-washedandpre-sterilizedRTUprimarycontainers(i.e.vialsandsyringes).Choosingbetweenstainlessandthesesingleusetechnologies(SUT)isacrucialcalculationforanewproducer.

AdvantagesofSUT:

Lower upfront cost: Using SUT and RTUprimarycontainerscandrasticallycutupfrontcosts.

Faster set up: Standardized design units arequicker and easier to set up than equivalentstainlesssteelfacilities.

Easy expansion: Facility capacity can bequicklyexpandedbysimplyaddingadditionalunits.

Reduced facility scope: The combination ofusing more single use equipment and RTUprimary containers allows new facilities toremove the requirement for all on-sitecleaningandsterilizingequipment.

DisadvantagesofSUT:

Higher variable operating cost: Each newbatch of vaccines requires new disposableequipment. This higher operating cost caneclipsetheinitialcostsavings.

Continued supply chain risk: Using SUTequipment for bulk and form/fill requiresrepeated ordering of newparts. If a supplierexperiences difficulty in meeting demand,productionisatrisk.

Ingeneral,theamountofbatchesofvaccinethataparticularfacilityproducesdetermineswhetherstainlesssteelorSUTispreferable.AsmallnumberofannualbatchesisbettersuitedtoSUTwhilefor large numbers, stainless steel is more cost effective. Numbers of batches do not necessarilyreflectoverallproductionvolume:ahighcapacityfacilitycanproducealargevolumeofproductinfewbatchesandviceversa.

Choosing between SUT and stainless is a complicated decision withmany contributing factors. ATotalCostofOwnershipAnalysisisnecessarytodeterminethebestsetup.

TheneedformultiplefacilitiesItisnotpossibletoproduceallvaccinesinasinglefacilityfortwomainreasons.Thefirstisthattheequipment needed to produce vaccines varies from product to product. The second is that theproductionofsomevaccinesneedstobesegregatedcompletelyfromareasproducingothertypesofvaccines.Thiscanresultinsegregatedproductionareasorevenseparatefacilities.

DifferentBulkFermentations:Differentantigen fermentationmethodsmean thatnotall antigenswill use the same fermentation or purification equipment and technology. Producing variousantigensmayevenrequirededicatedfacilities,asinthecaseofsporeformingtoxoids.


26

Lyophilized vaccines: In some cases vaccines are not stable in liquid forms even with the bestrefrigeration and stabilizers. In this case, they typically will be freeze dried or lyophilized. Thelyophilizationprocessaddsanotherlayerofcomplexitytotheform/fillfacilityandcoldchain,anditalsorequirestheadditionofa lyophilizertofreezedryproducts immediatelyaftertheyhavebeenfilledintovials.

Biocontaminationandsafetyconsiderations:Forsafetyreasons,somevaccinescannotbemadeinthesamefacility.Twocommonexamplesare:

1. Liveandinactivatedvaccinesneedtobemadeinseparateproductionfacilitiesaccordingtomostnationalregulations.

2. Productswithvaryingbiosafetylevelsrequiredifferentdegreesofcontainmentprecautionstobesetinplacebothinthedesignofthefacilityanditsoperation.Insomecases,thismayalsoresultintheneedforseparatefacilities.

ProcessandProductDevelopmentOur case study inAppendix1 includesbasicprocessdevelopmentwork (water runs,placebo runsand validation runs) followed by minimal product registration data gathering (processcharacterization, product equivalency testing, stability, etc) that doesn't include trials in humans.Thisassumesthatthesetestswillberunbylocalemployees(somewhohavepriorexperiencewiththis)withguidance fromthe technology transferpartner. Itdoesnot includeanypayments thatatechnology transfer partner may request in exchange for their people's time or the hiring of avalidationcompanytoperformthis.

The timeand costof this is highlydependenton the regulatory agency, theproduct that is beingtransferred, where its being transferred from and howmuch of the process is being transferred.Thusthetimelinecanrangefromaround1yearasdepictedinthecasestudy,to5ormoreyears.Product development costs can range from just a few non-saleable production lots (as depictedabove)tonon-saleableproductionlotsplushumanstudieswithcostsofmillionsofdollars.

ProductDevelopment/ClinicalTrialsProduct development costs must also be considered and are also not included in the maindocument. There are costs involved with production process development and conducting anyproducttestsforproductregistration.Thesetestsrequireproductwhichcannotbelatersold.

Ifclinicaltrialsarerequiredforaproduct,carryingoutthesetrialscantakemultipleyearswithcostsin themillionsofdollars.Theexactcostanddurationof the trialsdependonanumberof factorswhicharebeyondthescopeofthisdocument.


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Appendix3:Glossary

AdjuvantAsubstancethatmaybeaddedtoavaccinetoboosttheimmunesystemresponsetothetargetantigen.

AntigenAtoxinorotherforeignsubstancewhichinducesanimmuneresponseinthebody.Inthecontextofvaccines,areseveral typesofantigen includingwhole inactivatedpathogen,attenuatedpathogen,purifiedsubunitderivedfromthepathogen,andrecombinantantigens.

Backwards integration/Reverse integration A technology transfer regime which sees a localproducerbeginproductionattheendofthevaluechainthenworkingbackalongthevaluechaintolearnsubsequentprocesses.

Bio-safety Level A set of bio-containment precautions required to isolate dangerous biologicalagentsincertainareasofafacilityorproductionroom.

BirthcohortAgroupofpeoplebornduringaparticularperiod.Inthecontextofvaccination,thisisusuallyduringasingleyear.

Cleanrooms Anenvironment,typicallyusedinmanufacturing,withalowlevelofenvironmentalpollutantssuchasdust,airbornemicrobes,aerosolparticles,andchemicalvapours.

Cold chain The strict control and monitoring of the temperature of a vaccine starting duringmanufacturingandcontinuingallthewaythroughtoadministrationtothepatient.

Costofgoods Thecostof thematerialsused increating thegoodsalongwith thedirect labourcostsusedtoproducethegoods.

FrontEndLoading(FEL)Adeliberateapproachtobuildandverifyaproject’sbusinesscaseearlyintheproject’slifecyclewhenthecosttoalterorcanceltheprojectisstillrelativelylow.

GAVI Global Alliance for Vaccines and Immunization, a public-private global health partnershipcommittedtoincreasingaccesstoimmunizationinpoorcountries.

InactivatedvaccineAvaccineconsistingofvirusparticles,bacteria,orotherpathogensthathavebeengrownincultureandthenkilledusingamethodsuchasheatorformaldehyde.

Live/attenuated vaccine A vaccine created by reducing the virulence of a pathogen, but stillkeepingitviable(or"live").

Lyophilization Thecreationofastablepreparationofabiologicsubstancebyrapidfreezinganddehydrationofthefrozenproductunderhighvacuum.

ModularAconstructionmethodinvolvingassemblyofsectionsormodulesoftheoverallfacilityorstructureoff-site.Theindividualmoduleunitsarethentransportedandassembledonsite.

Orderofmagnitude(OOM)Typicallyorderofmagnitudeseparatesnumbersbyfactorsoften(i.e.somethingcosting thousandsofdollarscostsanorderofmagnitudemore thansomethingcostinghundreds).Withregardstothetypeofcostestimatinginthisdocument,itreferstoarangeof-30%to+50%ofayettobedeterminedvalue.

PAHO ThePanAmericanHealthOrganization, an international public health agencyworking toimprovehealthandlivingstandardsofthepeopleoftheAmericas.

Ready-to-use (RTU) Pre-washed and pre-sterilized production equipment or primary productcontainers(i.e.vialsorsyringes).

Recombinant vaccine A vaccineproducedby inserting theDNAencoding an antigen (such as abacterial surface protein) that stimulates an immune response into bacterial ormammalian cells,expressingtheantigeninthesecellsandthenpurifyingitfromthem.


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Single-use Technology (SUT) Equipment that is only used once before disposal. This can rangefromfiltersthatareboughtRTUandthendiscardedaftertheiruseall thewaytobioreactorsthatconsistofaRTUbagthatisusedinconjunctionwithareusablehousing.

StickbuiltThetypicalconstructionmethodwherebyafacilityorstructureisassembledpiece-by-pieceonsite.

Technology transfer (tech transfer) The transfer of know-how and/or processes from a moreexperiencedorganizationorcompanytoalessexperiencedone.

WeightedAveragePriceAnaveragepricecalculatedfromhowmuchofagivenproductisboughtateachprice.Ifthereisonlyonesupplieroftheproduct,thenthispricereflectstheactualpricepaidtothesupplier;ifthereismorethanonesuppliercontractedforaproduct,individualpricesarenotdeterminable.

UNICEFTheUnitedNationsChildren'sFund,aUnitedNations(UN)programheadquarteredinNewYorkCitythatprovideshumanitariananddevelopmentalassistancetochildrenandmothersindevelopingcountries.


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Appendix4:Acknowledgements

ThiswhitepaperisaresultofanongoingcollaborationbetweenUNIDO,WHOandAVMI.

TheauthorswishtothanktheAfricanVaccineManufacturingInitiative,AVMI,fortheirinvolvementin,andcontributionto,theconcept,developmentandfinalizationofthisdocument.AVMIisfocusedonpromotingtheestablishmentofsustainablehumanvaccinemanufacturingcapacityinAfrica.Theorganizationconductshighleveladvocacytowardsthisgoal,andencouragespartnershipsbetweenAfrican manufacturers of vaccines and biologicals and other interested stakeholders who have avision of Africa producing its own vaccines. Further work entails attracting and securing thenecessary skills and financial resources for establishing vaccine manufacturing capacity on thecontinent, as well as promoting the scientific and technical capacity building of Africa’s vaccinemanufacturersinallaspectsofproductionanddistributionofvaccinesandotherbiologicalproducts.MoreinformationonAVMIcanbefoundatwww.avmi-africa.org.

The authors alsowish to thank the following for their input, advice, and feedback into thiswhitepaper. The following persons, listed alphabetically, provided inputs through offering personalopinionsasexpertsintheirrespectivefields:JasonGolan,CecileLanfranchi,JanLijla,ClaudiaNannei,PatrickTippooandAbrahamShamir.

WHITE PAPER

Establishing ManufacturingCapabilities for Human Vaccines

Key cost drivers and factors to consider when planning theestablishment of a vaccine production facility

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