What Kind of CMC Supply Chain Do CGT Sponsors Need? Insights from Industry Leaders

Not long ago, the fourth stop of the [No Need to Compete, Go Further] CGT Industry Upgrade Series - Park Tour, jointly organized by HIEA, Hangzhou Xingcheng Biotechnology Co., Ltd., Yeasen, LePure, Hong Kong Austar Group, VectorBuilder, Life Biosciences, and Legend Capital, and hosted by VCBeat New Medicine, was held at BioBAY in Suzhou.

During the conference, under the moderation of Dr. Liu Xiao from Hangzhou Xingcheng Biotechnology Co., Ltd., CTO Zuo Liang from Abogen Biosciences, CEO Ying Guo from XiTong Biotechnology, Vice President Peng Gao from Abogen, Head of BioService at LePure Biotech and CTO Jun Yuan from KangSheng Biotech, Vice President of Science and Technology Production Junhui Li from Hangzhou Xingcheng Biotechnology Co., Ltd., and Key Account Director Guosheng Tan from Yeasen Biotechnology (Shanghai) Co., Ltd., discussed the key points and solutions in CMC for gene and cell therapy.

VCBeat has compiled the content of the roundtable discussion as follows:

Liu Xiao:First, I would like to hear Party A's opinion: which one is more important, "stability, speed, or cost-effectiveness"?

Gao Peng:We, Abogen, are a company focused on the research and development of mRNA drugs. In the past few years, the industry has developed very rapidly. From our perspective, speed, stability, and cost-efficiency are all crucial factors. Whether internationally or within China, the targets being researched by everyone are quite similar, so the speed of R&D, process development, and production is extremely critical—working fast is a must. Stability is also very important for development; a relatively stable process and production system are essential. Cost-efficiency—whether it’s saving money or time—is closely tied to development and production.In terms of ranking, it varies across different projects. For some highly competitive projects, "speed" is the most important; for some relatively unique aspects, "stability" and "cost-effectiveness" become more crucial.Looking to the future, we hope to see some advancements and breakthroughs in grassroots mRNA technology. If we can take the lead technologically, it will reduce competitive pressure. Therefore, we prioritize stability and cost-efficiency over speed competition, focusing on better product quality, which is our primary goal.

Guo Ying:We, at Xiatong Biotech, also hope to move faster while ensuring stability and cost-effectiveness. Since we are working on relatively unique, innovative drugs targeting a series of demyelinating or hypomyelination diseases that have not yet entered human clinical trials internationally, the first crucial step is rapid clinical validation. In subsequent pipelines, stability becomes more important, such as achieving good optimization in processes, especially avoiding major pitfalls in CMC, from IND to BLA.In reality, if the early stage is not stable and there are too many changes in the middle环节, the overall process cannot be accelerated.

Stability, speed, and cost-effectiveness still need to be prioritized based on different stages of demand. Take our pipeline, which focuses on innovation as the main selling point, as an example: first, we need rapid clinical validation, followed by high process repeatability and stability to enter the IND phase. The IND is our short-term goal, and the dual filing of indications in China and the U.S. requires us to be "stable." In terms of CMC, we are also beginners learning how to achieve extreme stability, especially avoiding pitfalls, which is a key focus for us in the early stages.

Liang Chuo:I don't quite agree with the previous statement. Fast, stable, and cost-effective is naturally the optimal sequential order.If a product does not quickly progress from IND to BLA, the real issues may not become apparent. Looking back at the past few years, after the earliest cell therapy drugs in China hit the market, the true market response revealed the reality of the situation in this field—this is how the market truly operates, prompting deeper reflection on how this industry should move forward. Issues such as profit margins and localization must be based on efficiently navigating the marketization process, allowing the market to drive once the value chain is connected.

What is stability? Is it process feasibility or achieving the goal of process control? My personal understanding is that it truly achieves the goal of the process—controlling product quality. In most cell and gene therapy products, there are still many unresolved "black boxes" among the scientific issues related to product quality, and it is common to encounter unclear process development objectives.The achievable strategy should be based on statistical data generated from stable and unchanging processes, deepening the understanding of the relationship between product processes and quality from the perspective of the entire product production cycle. This includes both process data and clinical data. Without these data, blindly investing excessive research efforts in the hope of achieving a more stable process can easily lead to taking the wrong path or wasting time and resources.

Finally, it is the province. The iteration speed of CGT products is very fast, and sometimes the product life cycle is very short. Therefore, it is more reasonable to save money after NDA or during the continuous product update process. Moreover, this saving is not something that a single enterprise can do alone; doing it alone is useless. Instead, it is something that the entire industry should do—it is a matter for the whole industry circle, which requires a large number of products to go through the process in order to drive the rapid advancement of the industry circle. From the perspective of cost structure, which is more important, direct cost or indirect cost? In fact, it should be indirect cost. Therefore, if we now focus a lot of energy on how to save direct costs, it is very likely to be inefficient at the current stage.

Liu Xiao:At present, the three things of being fast, stable, and cost-effective can lead to more variations and seem to be contradictory. We try to understand a top-level logic — how to strike a balance. From the perspectives of suppliers and clients respectively, what is CMC? What problems can CMC solve?

Li Junhui:The phase of CMC is actually closely related to the stage of development. From the perspective of stability, speed, and cost-efficiency, "beginning with the end in mind" is the best summary. I have also worked for many years in R&D-focused enterprises and innovative companies as the project owner. My experience is that finding a good CMC partner is very important, as it ensures stability, speed, and cost-efficiency. On one hand, an excellent CMC partner has rich experience and can assist companies from the perspectives of CMC, process, quality systems, and even compliance, helping them achieve their goals quickly and confidently.

Speaking of quality control again, the quality management system of CMC is related to the stage of the overall project. The requirements at the early IND stage and subsequent commercialization stages are different. An experienced CDMO platform can manage risks and focus on key points — the critical aspects and data to be emphasized at different stages may vary based on an evolving understanding of risks. All of this can only be learned through experience.Overall, CMC must be a systematic, mutually supportive, and structured whole. It is difficult for any single highly specialized individual to answer all questions. More importantly, whether as the client (Party A), service provider (Party B), or CDMO platform, it still requires joint efforts from everyone. People from various specialties and fields are indispensable, working together to ensure the smooth progress of CMC.

Yuan Jun:For supply chain enterprises, stability is more important because only stable products can be provided to customers, and ultimately, these products will become industrialized, realizing the value of front-end R&D and the enterprise itself.Regarding "speed," I believe it is a double-edged sword. We must quickly meet customer demands while ensuring that product performance aligns with the customer's development timeline and stage requirements. To achieve "speed," the sunk costs we have incurred are extremely high.For supply chain enterprises and customers, the aspect of "saving" is certainly indispensable. "Saving" not only enhances economic efficiency but also increases the market competitiveness of products, promoting the healthy development of enterprises. Ultimately, we hope that a relatively良性循环 (positive cycle) can be formed during the cooperation process between Party A and Party B, allowing the industry to develop better in an overall sluggish environment.

Liu Xiao:Looking back at the entire process of a new drug from development to BLA, what CMC pitfalls can be avoided when developing new vaccines?

Gao Peng:For pharmaceutical companies, the essence is to strive for speed, hoping to outpace competitors throughout the entire process from project initiation to final commercialization. However, in reality, especially for completely innovative drug forms like mRNA drugs, there are many unknowns in China across all aspects, including R&D, regulation, and clinical trials. If the platform capabilities are sufficient, stability actually becomes more crucial. In this regard, I strongly agree with Mr. Yuan's earlier point that, whether in terms of processes or production, many areas require relatively stable and mature technologies. This greatly benefits the final production success rate, regulatory approval, and clinical advancement.

Liu Xiao:In my past experience, many pharmaceutical entrepreneurs do not consider CMC in the early stages of entrepreneurship. However, Guo Ying mentioned considering CMC from the initial stage. Why do you think CMC is important for innovative drugs? Why are you so interested in understanding CMC?

Guo Ying:If more attention is paid to the CMC process from the early stages, many detours can be avoided later on. With a background in scientific research myself, the biggest difference between university research labs and companies may lie in CMC. Take cells as an example: in scientific research, many methods can be used, such as animal experiments and animal efficacy validation. But when moving towards commercialization or pharmaceutical applications, where human trials are required, CMC becomes essential, and considerations of consistency and risk are necessary.

A minor issue may pose significant risks to humans and create substantial clinical problems. Therefore, it is crucial to distinguish well between scientific research and commercial production, especially since the ultimate goal is the market, where the target audience includes a large number of patients after Phase I, Phase II, and subsequent BLA approval for market launch. The original intention of drug development is certainly to benefit humanity or achieve one's ideals, but if insufficient attention to CMC or failure in a certain quality control leads to risks or adverse effects on people, this would contradict the original purpose of entrepreneurship. Hence, CMC is extremely important.

Liu Xiao:As a supplier, what are the advantages of producing domestically-made alternatives besides helping customers save money?

Li Junhui:I believe that the ultimate goal of domestically produced alternatives is to create an ecosystem. If the entire industry is developing but lacks a mature supply chain or an ecosystem for the supply chain, it will be very difficult to sustain growth. In recent years, we have all felt that relying on imports for equipment and materials leads to uncontrollable costs, and sometimes quality is not very reliable either. When problems arise, the cost of communication and the time required to resolve issues can be extremely high.

The localization of China's biopharmaceutical supply chain lags behind many other industries in China, including in terms of informatization and automation levels. These industries have gradually built and improved from small-scale equipment and raw materials to large-scale production lines and factories. If the supply chain in the CGE industry is not sufficiently developed, we will always be at a disadvantage. Whether considering safety or strategic factors, the supply chain remains the most fundamental issue.

Liu Xiao:The core issue is, is the lower cost of domestically produced alternatives sustainable? If we want to reduce prices, we must have a cost leadership advantage. When facing a large enterprise as a bidding competitor, after a detailed calculation, do we truly possess a cost leadership advantage?

Tan Guosheng:We may have a leading advantage in terms of cost because we are still a relatively large-scale production enterprise. During the pandemic, the main concern was the fear of import "bottleneck" issues. By 2024, what we are considering is no longer just the "bottleneck" issue. In fact, many foreign supply chain companies have been operating in China for many years, and the country also emphasizes giving private and foreign enterprises equal treatment.Therefore, the work that Yeasen started in 2023 focuses more on achieving equal competition with imported brands rather than solely addressing national sentiment or the "bottleneck" issues for import substitution.

At this stage, before the import prices come down and the imported goods are still delivered from overseas, our domestically produced alternatives will inevitably have a significant price advantage. In the future, when international CMC truly comes to China for R&D and production, there may only be a few companies with their Chinese headquarters remaining in the country. Combined with mergers and acquisitions, there may only be 3 to 5 domestic companies producing biological materials.

Liu Xiao:Localization of foreign enterprises does not mean cheaper, as their supply chains also consist of various types. For domestic companies, whether they are the demand side or alliances, price serves as a foot in the door to attract customers. However, the ultimate changes in the ecosystem still depend on the demand side. The supply side and other parties can better understand the demand side, and while understanding, they can help the demand side make some changes.

I believe that most local departments and domestically-produced companies are still more willing to make changes for domestic clients (Party A) and contractors (Party B), because we understand you. As for foreign enterprises, all Chinese employees, or even global employees, are professional managers. They are not obligated to develop a specific product for a certain client unless it can guarantee more than five times the profit.

Therefore, we call for more mutual understanding between the two parties, which is the only way to make joint changes. I believe that no CDMO or supply chain company is tailor-made for the other party; there will definitely be problems and conflicts in between. It is not terrible to encounter problems. The key lies in identifying problems, solving them, and reducing the possibility of issues next time—turning big troubles into small ones. Only then can we accelerate the progress of China’s cell gene therapy and nucleic acid fields, and ultimately "survive."