Rentschler Biotechnologie invests in new production plant
The Laupheim-based contract manufacturer Rentschler Biotechnologie GmbH is greatly expanding its production capacities. The company is investing €24 million in the construction of two 3,000 litre stainless steel bioreactors, which should be operational in early 2017 and will more than double the production capacities for cell culture-derived proteins. Rentschler also announced recently that it was adding a new 2,000 litre single-use bioreactor that will be operational at the end of the first quarter of 2015. Dr. Christoph Winterhalter, Vice President Business Development & Sales at Rentschler Biotechnologie, talked with Walter Pytlik (BioRegionUlm) about the company’s investment and production plans.
In 2013, Rentschler experienced some tension with orders when its order books were far from being full. However, a year later, Rentschler announced its plans to more than double its production capacity. How did this situation come about?
It goes without saying that we only invest if the order situation allows us to do so. In our project-based business, the effects of the 2009 economic crisis became noticeable relatively late on. In addition, two very large projects fell away, resulting in temporary short-time working in 2013. However, we have realigned the company, in particular by repositioning and professionalising the company’s marketing and sales activities. In 2013, Frank Ternes was appointed as Chief Business Officer, Dr. Marion Schrader as Director of Marketing and I became Vice President Business Development. In addition, we have significantly expanded our sales team in the USA, which has led to the acquisition of large-scale projects, including some in late clinical phases.
Are the huge investments associated with a strategic change?
No, we remain just a CMO (ed. note: contract manufacturing organisation). And our major focus will continue to be mammalian cells and we will also continue with our fee-for-service model. What we have done is focus to a greater extent on our primary markets and we have also been able to acquire new projects in the USA, Israel, Korea and Japan, thus expanding our international orientation. What is new is that we now also want to accompany clients with late clinical phase projects as they move towards market. Previously, Rentschler Biotechnologie was mainly active in the clinical phases of product development. Having said that, several of our clients’ projects are close to entering the market phase.
Are the market prospects good for such big investments?
Yes, absolutely. We have calculated business plans and capital payback periods, of course. In principle, customers are looking for a very experienced and reliable partner for the clinical trial phases. During the clinical development phase, companies will – if I may put it this way - hand over their drug candidate to us like a mother hands over her baby to a babysitter. Like a mother, the companies go for a manufacturer with long-standing experience and minimal error rates. We’ve been able to heavily rely on the brand Rentschler, on the trust we’ve established over the 40 or so years we’ve been active on the biopharmaceuticals market.
The favourable outlook, growth rates and the market environment, as well as biopharmaceuticals grown in mammalian cell cultures have all been developing strongly. What finally prompted us to make the investments we’ve made was the development of biosimilars. With Rentschler’s Strategy Agenda 2018, we have set very ambitious goals for growth and income, which have made these investments necessary.
The first wave of expiring biopharmaceutical patents is positive for you, isn’t it?
Yes, definitely. Biosimilars are booming. They have extremely high growth rates. Some market surveys anticipate growth of up to 60 percent. It suits us that almost all expiring blockbusters are produced with mammalian cells. But we still have large original drug manufacturers among our customers as well as small biotech start-ups.
Let’s come back to Rentschler’s biggest investment: you are building a Twin system with two 3,000 litre stainless steel bioreactors. Why such a system and how will you integrate it into production?
The Twin system mainly targets market supply at our company site in Laupheim. With a few product changes, the system will be very productive and efficient. This is common in routine processes targeting market supply. It integrates well into our existing GMP line. We’ve called it Twin because it runs with two main bioreactors in parallel with one shared downstream processing unit. This enables us to more than double the production capacities of cell culture processes run in fed-batch mode.
So in fact the Twin system helps you save time?
Yes. A normal production line run in fed-batch mode requires the product to remain in the main bioreactor for two weeks, while growth reactor and purification processes take no more than a week. We have removed the bottleneck by installing two main bioreactors which are run alternately. With the Twin system we can thus alternately supply the downstream purification suite.
Yields are increasing. Does this mean that you can now also produce blockbuster drugs in Laupheim?
In the past, CHO cell yields have doubled every five years. We can now produce between three and four grammes per litre. If everything works extremely well, we can even produce six to eight grammes per litre. However, I don’t think there will be as many blockbuster drugs as before. The expiring blockbuster drugs will be produced by several biosimilar manufacturers, meaning that individual companies will deal with smaller quantities.
And then there are also personalised medicine applications, orphan indications and niche applications, all of which require smaller drug quantities. We have therefore deliberately decided against a 10,000-litre bioreactor. With our 3,000-litre stainless steel reactors, we are no doubt in the premier league as far as CMOs are concerned and are able to produce relatively large drug volumes.
Rentschler has also been investing in single-use technology and will add a new 2,000-litre single-use bioreactor by the end of the first quarter of 2015. Is the technology mature enough? Are there any technological factors that would limit the use of single-use bioreactors?
Right now, volume is the limiting factor. There are hardly any commercial facilities with reactors over 2,000 litres. In principle, single-use bioreactors are preferred during clinical phases, which will continue to be our core business. Clinical phases are characterised by frequent product changes; a production line is used for many different products. The use of single-use bioreactors is therefore more competitive because a product change requires fewer cleaning steps than with stainless steel reactors. We are experiencing high demand for single-use systems. We have all three types of bioreactor systems available and the decision as to which system to use is based on many factors. We are also experiencing higher demand for larger volumes, which is why we decided to add a 2,000 litre single-use bioreactor to our production line.
What about the safety of single-use bioreactors: can you keep the amount of leachables and extractables* under control?
Yes. We have carried out risk assessments, which are made available to our customers. There are certainly still some psychological reservations. However, the number of customers that are starting to accept this new technology is growing. Single-use bioreactors are already used for the commercial production of pharmaceuticals. The technology will certainly find acceptance in the medium term, and definitely for clinical development phases.
Does an increase in production capacity only lead to changes in quantity or is it also accompanied by a qualitative change?
We are trying to minimise risk with medium-sized projects for our entire range of clients from small biotechs to big pharmaceutical companies. Our production strategy is based on risk diversification and a portfolio approach. If a big blockbuster were to hit the market, then Rentschler would be perfectly happy with 10 to 20 percent of the global market demand. We do not want to use our plants for a single product.
Have you considered establishing production sites outside Europe?
No, not for the moment at least. However, we plan to increase awareness of the Rentschler brand in the USA by increasing our presence at American trade fairs. Most of our ‘marketing dollars’ are therefore injected into the USA.
And what about Asia?
This is currently not up for debate either, even though we are monitoring the activities of the largest CMOs. It will take us around three to five years to make the Rentschler brand more popular globally.
Are there new biopharmaceutical product groups on the horizon for which a CMO like Rentschler wants or needs to be prepared for?
RNA drugs, virus-based gene therapeutics and antibody conjugates - our marketing team is keeping a close eye on development in these sectors. However, in the short and medium terms, our portfolio is focused on mammalian cell cultures. We have no plans to expand our portfolio.
Let’s have a look at globalisation and ever-growing competition. Why would you produce drugs in a high-wage country such as Germany?
In the first place, our clients attach great importance to experience. The hospital business is an intimate relationship between customer and CMO. In this business, timelines and quality are more crucial than price. The market wants quality, reliability and expertise. This is why this kind of business is still so successful in Germany and Europe. GMP is an area that benefits from German engineering. We are keeping an eye on the efforts of emerging countries such as China that are currently establishing a market supply for their own population. However, the technologies still come largely from the West.
Does the expansion of production capacity also require the expansion of the workforce?
Yes. However, while we are doubling production capacity, we are not doubling the number of employees. The total capacity of the plants will determine the number of employees. I think that a two-digit percent workforce increase can be expected.
Christoph Winterhalter holds a PhD in microbiology (TU Munich) and is Vice President Business Development at Rentschler Biotechnologie GmbH.
*Extractables: chemical compounds and inorganic elements that migrate from a material under extreme conditions (e.g. elevated temperature); leachables: chemical compounds and inorganic elements that are released from material under normal conditions over the course of a product’s shelf-life. For example, drug containers need to undergo so-called “extractables & leachables” studies in order to exclude leaching of chemicals from the plastic material. The potential release of extractables and leachables from plastic containers also presents a huge challenge when using single-use technologies.