Relationships with CMO’s Setting the stage for successful production phase relationships Richard L. Hameister, Genentech, Inc.

Outline

• Understand the relationship you want with your CMO

• Aligning expectations

• Establishing the infrastructure for performance assessment

• Measuring success

• Getting through difficulties together

• Conclusion

2

Is this a Tactical or Strategic Relationship Short term work or long term commitment?

3

Category Tactical Relationship Strategic Relationship

BUSINESS

COMMITMENT

• Generally one product

• Short term

• Minimum commitment

• Multiple products

• Long term

• High level of commitment, including yearly an/or multi year

minimums

SUPPLY CHAIN &

CAPACITY

PLANNING

• 3-12 month firm forecast

• Limited guarantee to capacity beyond firm

forecast

• 1-3 years firm forecast • Ability to substitute products to meet business commitment

• Guaranteed access to capacity above forecast and

represented within internal LRP capacity planning

TECH

TRANSFER/

CAPITAL

EXPENDITURE

• Contract giver bears 100% of tech transfer

costs

• Potential shared tech transfer costs

• Capital investments shared or covered by CMO

Cost

• Focus on negotiating per unit cost

• Lack of measurable Total Cost of Ownership

(TCO)

• TCO measurements utilized to achieve superior financial performance

QUALITY &

REGULATORY

• No quality management on site

• Lesser degree of access/direct involvement

during issue resolution.

• Dedicated Contract Giver quality management resource at

the CMO (Person in Plant (PIP))

• High degree of access to documentation and rapid issue

resolution

OPERATIONAL

PERFORMANCE

• May or may not have aligned metrics, goals,

and decision-making principles

• Aligned goals, metrics, and decision-making principles with

incentives and penalties

Outline

• Understand the relationship you want with your CMO

• Aligning expectations

• Establishing the infrastructure for performance assessment

• Measuring success

• Getting through difficulties together

• Conclusion

4

Aligning Expectations The Supply and Quality Agreements

5

• Supply/Manufacturing Agreement (the contract) A good Supply/Mfg Agreement creates a more productive quality relationship. – Audits – How Many and Who Pays – Person In Plant Allowances/Costs – Material Purchasing Controls – Testing Costs – Routine and Investigative – Key Personnel Requirements – Relationship Governance – Mfg/Release Lead Times

• Possible incentives for reductions – Procedures for Resolving Product Acceptability Conflict

• Latent defect/Complaint investigations – Annual Product Quality Reviews – Costs and Timing Expectations

Aligning Expectations The Supply and Quality Agreements

6

• Quality Agreement Discussion, clarification, and debate is critical to Quality Agreement success. – Health Authority Guidance and Expectations – Quality Responsibilities Matrix

• Deviation Review and Approval • Change Control Notification and Approval • Audits – types, numbers, durations • Release Activities and Sequence

– Quality Systems – Standards and Differences • Validation and Qualification • Utilities and Environmental Controls • Equipment Cleaning and Bioburden Controls

Outline

• Understand the relationship you want with your CMO

• Aligning expectations

• Establishing the infrastructure for performance assessment

• Measuring success

• Getting through difficulties together

• Conclusion

7

Outsourcing Decision

Contract Signed Registration Approved Reliable Supply to Patients Decommissioning Complete

Implement Manage Decommission Select

Governance Structure Installed Right Oversight Applied

Integrated Risk Management

Joint Governance

Category Strategy

Integrates Quality, Operations and Business Management

CMO Lifecycle – Relationship Governance Know how you will work together towards success.

8

Outline

• Understand the relationship you want with your CMO

• Aligning expectations

• Establishing the infrastructure for performance assessment

• Measuring success

• Getting through difficulties together

• Conclusion

9

What Performance Areas to Measure CMO Site Level Metrics – Examples

Supplier Delivery Performance (SDP) Deviations (Mo. & YTD)

Deviations Closed

Batches Dispositioned Deviation Root Cause Batches Rejected Deviation Rate Reject Rate (%) Avg. Release Time from End of Mfg Investigations (Mo. & YTD)

Investigations Closed Product Defect Rates (DP and FP) Investigation Root Cause (Trend)

Investigation Rate Field Issues and Recalls Investigation Free Lots (%)

Complaint Responses Risk Score Complaints Opened and Closed Compliance Risk Score Reduction Complaint Investigation Avg. Lead Time Risk Reduction %

10

Performance Scorecards for Communication Supplier Delivery Performance Example

11

Outline

• Understand the relationship you want with your CMO

• Aligning expectations

• Establishing the infrastructure for performance assessment

• Measuring success

• Getting through difficulties together

• Conclusion

12

• Support without Overtaking - Stay Calm and Respectful – You both want a successful outcome. - Focus on getting to solutions regarding compliance and product quality. - Bring the technical support but value the technical collaboration - Work collaboratively through misalignments in responsibilities or expectations.

• Empower the CMO to be Successful - Process knowledge and information sufficient to “own” the process. - Respect their need to represent their site, their quality systems, your process during inspections

• Collaborate on the CAPA’s - Find the right fit to ensure performance and for CMO internal consistency. - Avoid over-committing the CMO; be cautious with unique requirements.

• Celebrate Your Successes with Your CMO! - A job well done deserves recognition. - Approvals, positive trial outcomes, inspections, milestones.

Managing Through Difficulty Final Thoughts on Maintaining a Good Relationship

13

High-performing CMO relationship

• Successful tactical working relationship

• Excellent CMO performance and alignment of mindset and culture

Ability to commit • Internal willingness and ability to

make a multi-product, multi-year commitment

Mutual desire to grow relationship

• Willingness and ability from both organizations to implement novel arrangements that create mutual value

Reliable, Quality

Product Supply

In Conclusion… Mutually beneficial relationships enable reliable supply

14

Doing now what patients need next