Finalist 2013

“On-Demand Manufacturing of Pharmaceuticals”

Innovation in Pharmaceutical Manufacturing: Integrated Continuous Manufacturing

Technology Innovation Award

Forum “Future by Quality”

Salvatore Mascia, PhD

June 8th, 2015

Motivations for Change in Pharmaceutical Manufacturing

• Pharmaceutical manufacturing plants and technologies have not changed since many decades

• Current “batch” pharma manufacturing method is not sustainable any longer, due to a number of factors:

– Majority of blockbuster drugs going off patent

– Increasing R&D expenditures, but same # of drugs

– Pricing pressure

– Personalized medicines

– Stringent regulations, demanding for improved quality

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There is a need for novel and more efficient manufacturing techniques

• Inefficient processes cost pharmaceutical manufacturers $50 B/year

• Lead times > 200 days, issues with quality

Raw materials Tablets

Multiple, disconnected batch steps

Active Pharmaceutical Ingredient (API) Drug Product (DP), tableting

API API

Nickerson, J.; Macher, J., 2006, http://apps.olin.wustl.edu/faculty/nickerson/results/

Batch Manufacturing of Pharmaceuticals

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Tablets out

• Integration of multiple flow steps into one seamless process

• Costs reduced by > 50%, lead times < 2 days, better quality

Raw materials (prior to API)

MIT TechReview: http://www.technologyreview.com/news/506511/breakthrough-offers-a-better-way-to-make-drugs/

Integrated Continuous Manufacturing (ICM)

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• Use of Novel Process Technologies to Eliminate “Correction Steps” and Enable Integration

• End to End Integration

• Full Automation with 24/7 Operation

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Vision of “Integrated Continuous Manufacturing”

………more than $1 B invested in the last 10 years among major pharma companies, in related but “different” Continuous Manufacturing Initiatives

ICM Background and Current Status

The proof-of-concept of CM at MIT

Courtesy of NVS-MIT Center

2007: Novartis invests $65 M to launch the Novartis-MIT Center for Continuous Manufacturing

2011: Pilot plant process of Integrated Continuous Manufacturing in place at MIT Actual Novartis pharmaceutical produced

2011: Novartis to launch the ‘Technikum’ Translate MIT research into commercial manufacturing 2015 - currently implementing ICM in their TR&D; Technical Operations will be next

2012: Launch of CONTINUUS Pharmaceuticals Broader commercialization of Integrated Continuous Manufacturing 2015 - currently implementing ICM in its development laboratory

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MIT Pilot Plant

Courtesy of NVS-MIT Center

1. Continuous flow 2. End to end integration 3. System approach 4. Integrated control strategy

ICM principles:

Features: • 100g/hr of API • 2 synthetic steps • API salt formation & crystallization • Drug product and coating

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Integrated Control System Interface

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MIT Pilot Plant: Continuous Advantages Aliskiren Hemifumarate

Key Process Indicators Batch Continuous

Processing Time (hrs) 300

(200 days lead time)+ 48

Unit Operations 21 13

Number of Excipients 5 2

Environmental Factor (kg input / kg output)

[25-100] 15

(green manufacturing)

COGS (CapEx + OpEx) x > 30% reduction

Footprint y y/10

+ Includes off line holding, testing and shipping

Courtesy of NVS-MIT Center

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0

200

400

600

800

1000

1200

1400

1600

1800

6 60 160

Pla

nt

Foo

tpri

nt

(m2)

Million Tablets/Year

Δ = 835 m2

Δ = 1,607 m2

Δ = 180 m2

Footprint vs. Throughput

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Item Continuous Process, % reduction

CapEx 60

Material Handling 60-70

QA/QC 25-50

Waste 50

Utilities 50

Labor 25-50

Raw Materials 0-46

COGS 30-50

~ 70% of cost saving are fixed costs

Integrated Continuous Manufacturing offers high cost savings, while delivering high quality pharmaceuticals.

Courtesy of NVS-MIT Center

Batch vs. Continuous

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Joseph Jimenez, CEO Novartis Bill Gates, founder Gates Foundation

Courtesy of NVS-MIT Center Courtesy of NVS-MIT Center

“In the next 25 years, pharma will shift from batch to continuous manufacturing and make current production methods obsolete”

FDA CDER Director Janet Woodcock at AAPS 2011 (after MIT PoC)

“Continuous Manufacturing will be a game changer for the industry”

LGO Conference 2012: The Future of Manufacturing in the US

“Great potential for inexpensive antimalarial medications”

Bill Gates visiting NVS-MIT Center in April 2012

Positive Outlook on Continuous Manufacturing

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Financial Impact: COGS

$3.1B

$2.4B

$1.7B

$-

$10

$20

$30

$40

$50

$60

$70

Pfizer Merck Lilly

Gross Margin

COGS savedby ICM

COGS

$3.3 B

$1.5B

$-

$5

$10

$15

$20

$25

Teva Mylan

(+21.1% net income)

(+40.6%)

(+39.6%)

(+169% net income)

(+241%)

Source: www.google.com/finance

20

12

Rev

en

ue

($

B U

S/ye

ar)

Brand-name Pharmaceuticals Generic Pharmaceuticals

Billions of dollars saved every year in cost of goods sold (COGS)

20

12

Rev

en

ue

($

B U

S/ye

ar)

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Financial Impact: Small-Molecule Inventories

$0.4 $0,3 $0.2

$3,6 $3,1

$1,8

$-

$1

$2

$3

$4

Pfizer Merck Lilly

Inventoryreduction

ICMInventory

$0.4 $0.1

$4,0

$1,2

$-

$1

$2

$3

$4

Teva Mylan

20

12

In

ven

tory

($

B U

S/ye

ar)

20

12

In

ven

tory

($

B U

S/ye

ar)

Brand-name Pharmaceuticals Generic Pharmaceuticals

ICM can decrease billions of dollars tied in inventory

Source: SEC filings

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Throughout the supply chain, ICM adds significant value

Development Manufacturing

Sales/Distribution Patient Care

• Shorter development times

• Direct transfer from development to manufacturing

• Fast to market

• Reduced lead time • Decreased COGS • Greater flexibility

during launch • Small footprint • Decreased inventory

• Regional manufacturing and distribution network

• Increased responsiveness to change in demand

• Reduced chance of drug shortages

• Improved product quality

Supply Chain Advantages

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Barriers Associated with Implementation

Organization/Mindset

Regulatory

Technology

• Industry inertia • Excess batch capacity • API and DP plants are

separated • No current end-to-end

GMP continuous plant • Need to define a “batch” • Perceived risk for public

health among reviewers

• Pilot plant level • Demonstration runs

~ 10 days

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From the FDA….

“The greatest regulatory hurdle is the concern by

manufacturers that regulators will balk at implementing

these processes”………

“I don’t know why it’s not more widely used, as this is

the future”

Janet Woodcock – CDER, FDA, at ISCMP 2014, MIT

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Our “Vision” of the Future….

• 1st Commercial ICM plant in 2017-18 • ICM will make current batch manufacturing methods obsolete

in 10-15 years • ICM can be applied to branded or generic drugs without

limitations • Transition to ICM will be gradual, and ICM lines will be initially

placed in current manufacturing facilities • Future will see regional distribution of the ICM plants –

ICM lines are modular and portable

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Opportunity for Italy with ICM

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Italian Center of Excellence in Pharmaceutical Manufacturing

Manufacture “off-patent” pharmaceuticals in Italy, and sell them at a significantly reduced price

MIT Pilot Plant Benefits to Italy

• Establish a National Center of Excellence in Pharmaceutical Manufacturing and create technical jobs

• Lower lead-time for drug production (90% reduction) with reduced risk of shortages

• Reduce healthcare costs by decreasing spend on common “off-patent” medications *(~$400 M annual savings)

Thank you!

The CONTINUUS Pharmaceuticals Team

www.continuuspharma.com info@continuuspharma.com

Tel: +1.781.281.0226

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