Labor Dr. Merk & Kollegen (LMK) is reorienting its business towards viral therapeutics. With this change of strategy, the company, which has decades of expertise in the field of virology, wants to position itself in a timely fashion in the rapidly growing new market for advanced therapy medicinal products (ATMP). In gene and virotherapies (oncolytic viruses), tumour vaccines and CAR-T cell therapies, viruses are essential as vectors, killers of tumour cells or vaccines.
"We offer customers a great deal from a single source", says Dr. Ingrid Rapp, clarifying, "only a few companies in the world offer such a complete range of services as ours." LMK’s CEO is herself a virologist and is referring to the fact that other CDMOs (contract development and manufacturing organisations) are either strong in production or in analytics, but do not combine both competencies to the same extent as Labor Dr. Merk & Kollegen (LMK).
Big pharma and biotech - the target clientele - can access an almost complete range of services in the Upper Swabian town of Ochsenhausen, where the company is based. This starts with process development through GMP (Good Manufacturing Practice) production (upstream and downstream) and continues through to analytics, all with strict health and safety guarantees attached; the only exceptions are aseptic filling and packaging.
Once a viral therapeutic candidate leaves a research laboratory, it can be transferred to LMK at this early stage. At LMK, not only is the GMP process developed for each individual virus, but it is also manufactured, analysed and cleared by a competent person before it is transferred to a different company for aseptic filling and packaging and then delivered to the customer as a finished clinical sample. Since all the necessary steps can be carried out on site, this service takes six to nine months, LMK’s CEO reports.
The company, located in the middle of the strong biopharmaceutical region between Ulm and Ravensburg, has been active in the field of virology for almost 50 years. The company has acquired comprehensive know-how in this discipline, in particular as an analytical service provider for the (bio)pharmaceutical industry. "This is why we also call ourselves experts in virology", says CEO Rapp. Over the years, the company, which has now grown to over 100 employees, has built up a broad range of GLP- and GMP-certified analytical methods. These methods are used for testing services in the pharmaceutical and biotech industries.
Based on its broadly diversified virological analytics, LMK has become a manufacturer of viral therapeutics. The cleanrooms are now in operation; the GMP authorisation from Tübingen Regional Council was granted in November 2019.
The strategic realignment took place in 2015 and 2016, Rapp reports. The company carried out an investigation of the ATMP market, and the realignment is the result and the response to this investigation that indicated how the company could grow and develop in a future-oriented manner. Three years later, after an investment in personnel and material in the double-digit million range, current indicators seem to confirm that LMK's change of strategy is working. Even though it is not common for pharmaceutical and biotech companies to develop and produce their own products - the demand for Labor Dr. Merk & Kollegen’s services is growing.
The number of early clinical trials for viral therapeutics has skyrocketed to over 1,000 in the past three years. High research intensity also feeds a steadily growing pipeline of potential ATMP candidates. The sometimes spectacular therapeutic successes of recently approved gene therapies and CAR-T cell therapies have sparked funding fantasies that are additionally fuelled by media hype.
Although the number of patients treated with ATMPs in America and Europe, estimated at 4,500* in 2019, remains modest, one needs to take into account that the situation in the field of individualised medicine is different from the ‘one size fits’ all approach. Around 1,000 companies of all sizes are now active in this field worldwide, investing a great deal of capital (around 10 billion euros in 2019). In 2019, there were five approvals in the USA, EU and Japan; market observers and regulatory authorities expect a further dozen ATMPs to be approved from 2020 onwards.
In the meantime, LMK has not only expanded its workforce, but also created new capacity: laboratories for process development as well as cleanrooms for GMP production. The analytical department has also been expanded to develop additional methods such as particle analysis and DLS (dynamic light scattering). In contrast to large-scale antibody production in reactors with more than 10,000 litres, the production quantity of viral therapeutics corresponds to those that are typical for the field of individualised medicine. Here, the batches are more varied and considerably smaller. This opens up new business fields for smaller, specialised players like LMK.
"With our 200-litre scale for virus production, which we can double, we are able to serve customers in the early clinical phases", said Rapp, who is, of course, aware that this depends on the dose determined and the number of therapeutic applications. She also says that her company is well prepared for larger production volumes should these become necessary in advanced clinical phases. The company has taken precautions at its company site and has created sufficient space for further growth.
According to the virologist, numerous viruses are suitable for developing viral therapeutics: lentiviruses, adenoviruses, adeno-associated viruses (AAV), retroviruses, herpes viruses, measles viruses or rhabdoviruses. Technically, this diversity makes little difference to LMK. It requires the same machines, but different media, processes and purification methods. Basically, these areas are similar in terms of technology even though the viruses are different: the process begins with a cell culture to propagate the viruses, which are then expanded, harvested and purified before the results are analysed.
LMK has several platform technologies at its disposal and, according to Rapp, can thus also lower potential risks. The company wants to respond flexibly to customer requirements: if a client has already developed a process, this can be transferred to the Upper Swabian company where GMP production can be established. However, LMK can also develop a new process in cooperation with a client and transfer it, along with the analytics, to GMP production.
The company realignment is bearing fruit. LMK has already gained three customers for its new ATMP services. Negotiations are currently being conducted with several large pharmaceutical companies. According to company management, its analytical business is also doing very well. In addition, LMK is also focusing on its own research efforts. For example, in cooperation with other companies, the Upper Swabian company is driving forward new developments in the field of affinity chromatography.
Existing clients will continue to be provided with analytical testing services as before, said Rapp. As part of the company's realignment, LMK is no longer involved in developing and producing in vitro diagnostics. Similarly, medical device testing will be progressively scaled down. LMK’s focus is increasingly directed towards pharmaceutical testing and developing and producing products for pharmaceutical customers.
* Alliance for Regenerative Medicine. Advancing Gene, Cell, & Tissue-Based Therapies, ARM Annual Report & Sector Year in Review, Yearbook 2019, S. 3ff (Stand Ende 2019).