April 3, 2024
Participants
Introduction and Welcome
Oliver Ball: Hey! Hello! To those who are dialing in. We're just going to give it a minute for everybody to join the webinar, and then we'll get started in just a second.
Okay, I think we can get started and some other folks can dial in as they want to. So Hello, everybody! Welcome to the sixth Unbridled Excellence webinar in the series. I'm your series host, Oliver Ball, Director of Business Development for Dark Horse.
We really set up this webinar series to share some of the insights and experience that Dark Horse has generated over 10 years of operating in the cell and gene space. Now, we've had over 350 clients over that time, and one of the things that I think we've noticed a lot through the work that we've been doing has been really the cost of goods and manufacturability of cell and gene therapy products has become a very significant issue for the field, and arguably one of the major bottlenecks to the industry's development and maturation. So I think it's very relevant for us to have a webinar today on the enabling tools and technologies that are going to be providing a solution to this issue.
We at Dark Horse work quite a lot on tools and tech, as we call them, novel processing tools, analytical tools, and those companies who are taking those types of products to market. Not only do we help them on understanding the product market fit and helping them to understand customer needs, but also actually the ins and outs of product design and development, regulatory compliance of those devices - things that will be covered in more detail in the talk today.
So I'm really excited to have this expert panel with us today. Michael Kinzie, Dark Horse principal, who's been an engineer for 28 years in this field, who will introduce himself a little bit more later on. Richard Grant, a master, perhaps expert and veteran of the industry, who's been in the field, I think, 35 years. And Madeline St. Onge, she's a senior consultant with us. Previously was at ISCT, and got her MBA before joining Dark Horse.
Just before we get into the webinar today, just a reminder that we are going to have a series of webinars coming up throughout the year on other topics, too. So keep your eyes peeled for other announcements on those webinars soon, and there'll be one on preclinical strategy and roadmap to IND, another on IND authorship, and a third on facility operations, optimization and capacity planning, which should be a really interesting topic, too.
We will accept questions from the audience for discussion at the end of the presentation today. So if you have any questions that come up either now or during the presentation, please submit them in the Q&A box at the bottom of the Zoom interface, and the panel will be very happy to discuss those with you. If we don't have time to cover them all, then we can always talk to you afterwards separately.
Just a reminder also that the webinar will be available to watch on demand following today. So if you want to share it with anybody else, your colleagues, or we want to watch it again later on, then information on how to access that will be circulated following the webinar today.
So without further ado, I will hand over to the panel for today to get into the contents. I will start off, Richard, I think, with introductions of yourself, and then the panel. So over to you.
Richard Grant: Thank you, Oli. I'm Richard Grant, a mechanical engineer by training. My career has been in equipment and consumable development. So when I talk product development, it's about equipment and consumables rather than drug products themselves.
Oli's giving me 35 years in the industry. Actually, it's 20 years in the cell therapy industry, so I started with Argos almost, well, exactly 20 years ago today to help close and automate the dendritic cell therapy. I spent 17 years at Invitrogen, so a couple of years before that in product development and managing the cell therapy group, running cell therapy projects before being recruited to Fluidigm in Massachusetts to help them commercialize their acoustic cell selection and cell washing technologies that were then taken over by Merck and incorporated into Merck Millipore. And I've been with Dark Horse about a year. So, Michael, introduce yourself, please.
Michael Kinzie: Right. Thank you, Richard. My name is Michael Kinzie. I'm a principal at Dark Horse, and I've been with the stable for 2 years. I have 20 plus years of medical devices and cell and gene therapy from a bioprocessing manufacturing equipment perspective. My relevant experience was with Terumo BCT, which is located in Lakewood, Colorado, just west of Denver.
Terumo BCT is a global leader in blood component therapeutic apheresis and cellular technologies. My first part of time there I spent 10 years plus in the high volume manufacturing of complex, say, for instance, consumables in operations. I was a lead engineer on designing and developing a fully automated RF welding system for blood component bags. The system had a 12 second cycle time welding for bags per cycle. So what I call a 3 second leak tested bag.
I was the product engineer on the design team for the COBE Spectra Optia product. Then I jumped over to product development. I spent 10 plus years as the engineering manager and system engineer for the development of the Quantum cell expansion system, now called the Quantum Flex. This is real good experience for a full product development life cycle from prototype to commercial launch and then post market support thereafter. Madeline.
Madeline St. Onge: Hi, everyone! My name is Madeline St. Onge, senior consultant here at Dark Horse. I've been in the cell and gene therapy industry for 9 years. As Oli mentioned, the first 6 and a half, 7 of those were at the International Society for Cell and Gene Therapy, where I was heading up the industry affairs activities. I've been at Dark Horse also 2 years. And here I work primarily on our commercial strategy, market research and diligence projects, including those for clients developing tools and tech like we're going to discuss today.
So I'll dive right in. We're not going to spend too long on the agenda. This is just to give you a preview of the major considerations we're going to discuss throughout the webinar today. And as Oli mentioned, I'll remind everybody we do have time devoted at the end of the session today for Q&A. So please use that Zoom functionality and submit any questions for the panel. We'll do our best to get to those before we wrap up.
So we're really focused today on the development of bioprocessing equipment and key steps to consider once you have a novel idea with proven science behind it. So our goal is to cover best practices and opportunities to streamline these development milestones and also to ensure that commercialization is top of mind early in your product development journey. Some of the content that we're going to focus on today: how you consider your customer needs and start to think about market sizing and potential business models, how you consider your minimum viable product through prototyping and early customer research, looking at consumables and starting to secure your supply chain, your manufacturing process, and your alignment with regulatory requirements, testing your prototype with a group of early adopters so you have that customer engagement and can work to reduce your cost of goods early on, and then finally launch readiness, particularly with an emphasis on the ability to scale up your manufacturing.
Product Market Fit and Customer Understanding
So we're going to first look at product market fit and really looking at the question, what problem am I solving? And we're going to use a case study to showcase some of the major steps we take in supporting our clients with answering this question, and in this case the case study will extend beyond just product market fit.
The client in this case had a prototype and some established partnerships in place for their delivery platform for gene editing constructs, but was looking to deepen their understanding of user requirements and market opportunities. So to help them with this exercise, DHC started by performing a voice of customer survey, and the objective was to really gather insights to help frame target applications for this platform, expected performance metrics and pain points customers are experiencing with existing technologies that this product could help overcome.
Then, using a combination of what we learned from the voice of customer survey as well as some initial planning the client had done, we considered who would be the target customers for this platform and started to frame what that total number of potential customers could look like both today and in the future.
Then we evaluated pros and cons of competitive technologies to help frame where the client's platform could fit in the market. And that was really steps one to 3 were really phase one of the project, and in this case we didn't use House of Quality to refine design further at this stage. But that could be another step deployed that Michael will talk about a little bit later on.
So the next set of tasks, tasks 4 and 5 focused on developing the client's GMP strategy. So building out a GMP roadmap, performing a gap analysis and risk assessment and then supporting the client in managing their work with a contract engineering firm to develop the equipment itself.
And we use this case study because it's a good example of an integrated workflow with the outcome for the client being they were able to refine their understanding of their target market, make adjustments to their minimum viable product, plan for GMP with roadmap support and then also benefit from some project management work that helped oversee their other vendors.
And over the course of this engagement there were about 6 to 8 Dark Horse team members involved at various points in time depending on the subject matter expertise required, and I should also mention that while in this case we were doing this over the course of 18 months for one specific client, we can also do each of these steps or tasks individually, if somebody was looking just for one of these, so that's really the benefit of the integrated support there. So I'll pass it off to Richard now to discuss product market fit a little further.
Richard Grant: Thanks, Madeline. So I'm the supplier of a tool or technology for the cell and gene therapy market. What are my responsibilities? Well, the first one here is to demonstrate that your product works, and that's not just works in your engineer's mind, and it fills its requirements, but to demonstrate that it fills a market need, and that by fulfilling that market need, it's better than your competitors on at least one meaningful parameter, preferably more. That could be viability or recovery, definitely cost as we move towards a more cost focused environment for therapies. But more than just one would be important.
You need to continue, or you need to ensure that you have availability. So many of the products that have been launched in the market, I've noticed over the last few years, have struggled to either provide equipment properly when ordered, and worse and more common is the lack of consumable supply, reliable, obviously sterile, and confident supply of consumables in a timely manner is where a lot of equipment providers have been falling down.
You need to provide technical support for the use of your equipment and consumables in product development and manufacturing. And those 2 things are different in that the product development one needs your engineers to support the customers in refining your equipment workflows to the customer's process, and then you need to be able to lock down that equipment in manufacturing so it's only used for the recommended and approved process. So there's a difference in focus in the support.
And a lot of the equipment that's been developed or used in the cell therapy market was initially developed as a lab instrument, a research instrument. So it has some of that flexibility, but it's not ideally suited for manufacturing. So if you're coming into the market now, you need to almost have 2 modes in the product, one that can be used for product development and process development, and one that is locked down and reports well to manufacturing. And you've also got to remember that your customer is going to be the sponsor of the cell and gene therapy, and your product will be part of the CMC. And they need to know everything about that, and we'll touch on what that means from a master file perspective later on. But your responsibility is to develop your product in a way that enables the customer to use it in their process, and it has to add value and not complication to that process.
So I'll pass on to Michael.
Product Development and Requirements
Michael Kinzie: So for product development, how am I solving the problem? Just as in real estate, it's all about location, location, location. For product development in cell and gene therapy, it's all about requirements. It begins and ends with requirements. So a good requirements document is just as long as it needs to be and no longer. So there's a very fine balance of written and unwritten requirements.
There also are many strategies and approaches that can be taken to generate requirements, especially if you think about the minimal viable product which we'll get into later on. But you could have a minimal threshold performance to get it into the market, and then align that with a future objective value that's really superior in the marketplace. And then there's also certain requirements, such as functionalities and features that can be introduced into later versions. So that sort of helps the design team understand where they're going. So a well written requirements document gives the vision of what the design needs to do and then lets the design team decide how the design will meet those needs.
It also, the requirements document provides clarity of what I call definition of done for the engineering team, because design engineers are very good at designing and designing and designing. So it's a, it could be an infinite loop. But also with the requirements, it forms the basis of the traceability matrix, because some of these systems can get very complex and have multiple requirements, especially software and a variety of test cases that need to be managed throughout the whole design cycle.
Validating requirements, you know, confirms that they're the right ones, because every requirement has a cost to it. And as Madeline mentioned from after VOC, there is another tool that you may consider: the House of Quality. And briefly, it is essentially an efficient quality function deployment. It really translates the user needs of a voice of customer into engineering design requirements as features and functionality. One of my favorite user needs is ease of use. So, spoiler, this is a challenge, if not impossible, to validate.
The House of Quality also prioritizes resources and makes efficient use of resource utilization. It defines a working superior product benchmark to market products. It also gets a start on resolving conflicting requirements. As an example in the airline industry, there's a desire to minimize the cost per flight and the consumption of the amount of fuel that is consumed while maximizing the number of passengers per flight. More weight will burn more fuel. So you've got a conflict. What's the optimal design for that?
So requirements have attributes that they should be singular, unambiguous, and design agnostic. For unambiguous, not open for interpretation, really has one meaning, so you can avoid that what I call eleventh hour syndrome when a design engineer says, "Oh, is that what that requirement means?"
Also establish, the requirements should be measurable. So I have a nominal specification with tolerances, and if it's well written, it provides a predetermined acceptance criteria for the test or verification protocol. If it can't be measured, it's not a requirement.
Richard Grant: Yep, so I just wanted to comment here that requirements are really the foundational documents of your product development. So they need to be very clear, as Michael's pointed out, they need to be acceptable. But it's a living document. It can change through the process. But it is the foundation of your product, and you need to get that right very early on. It's very important. Back to you, Michael.
Michael Kinzie: Right. The other thing is the risk based approach. So for bioprocessing manufacturing equipment, it's highly recommended that you comply with ICH Q9. Your customer will most likely, or should be following this standard. It's very similar to medical devices ISO 14971. They're very sound risk management standards, and if there is an opportunity that your product may be classified as a device in the future, you'll already be complying with that standard. But either way they're very similar. GAMP 5 is also a risk based approach to comply with computerized systems.
Now, the key to a risk management process is that it's comprehensive and systematic and identifies the hazards that could cause harm. And there's a variety of tools that can be used for risk analysis. FMEA uses a severity and occurrence scoring system that leads you into what I would call the stoplight evaluation, where you can then score your hazards and the harms that they cause. But keep in mind typically a red, that means typically death or irreversible severe harm. You really don't have a product. You probably should not be shipping that product. So in this case severity of harm is not typically reduced because the harm is the harm.
And so the only other way to reduce risk is reducing the occurrence of the cause or the causes of the failure mode. So this is another way of prioritizing the work, effort, and resources, tackling the show stopper risks first. And then many of the non critical risks can be resolved by the application of design controls if you have them. You can continue to work on those, but it is a time and money effort.
Now, a challenge for you as a supplier, you may not know how your customer is using your product, and thus you may not know what harm could occur to the patient. However, there are the usual suspects of particulates, endotoxin, the extractables and leachables that are in essence impurities. So really with risk control, start as soon as possible, and it is a living process that gives a design team the time and information to be able to design the defect out of the product.
Richard Grant: And the one comment I would make on risk is it's important for your therapy risks to be, and your performance risks from a biological and a scientific background. Those are the risks I call show stopping risks. They need to be resolved early on before you progress with simple, difficult challenges in engineering. So there's really a measure of risks around, will this affect whether we have a product or not? Or is this a risk that just affects our ability to deliver the project on time? And you need to target the scientific and the risks you don't know that you have an answer for need to be dealt with early. Thanks, Michael.
Michael Kinzie: So forming the development engineering and support teams, what does it take to launch a novel cell and gene therapy tech tool and technology? And again, it's going to depend on the complexity and the novelty of the technology. But a typical design engineering team for a complete system, you may have a couple of different electrical engineers, mechanical engineering for the instrumentation or equipment and consumables. Those are very different. Typically the software, you have some kind of firmware as well.
And then if you're following a software life cycle development effort, you'd want your software quality assurance on the team as well. And I would recommend, if you have a multi-domain system to have a system engineer to integrate all those domains and then depending on the technology, you may have some specialty disciplines as well. And then with that you would have the support team of the typical business practice and business operations.
And one of the things about the House of Quality document, you start that early on in the process. It's almost an agreement with everybody: your support team and the design engineering team. So that marketing and sales, manufacturing, everybody's involved, and they can see what the product needs to do. And that's the time to bring up any concerns, and get those addressed early on. So Richard.
Design Management and Testing
Richard Grant: Terrific. So we've set up the teams. We've got everything going. How do we manage the design chaos that ensues? We've got a range of different tools. Obviously, you're prioritizing features and functionality and managing the risk that we talked about earlier.
I'll talk to Agile a little bit here. Traditionally, in a waterfall style product development, you get your mechanical and electronic challenges sorted early and you've got parts coming in. But the software doesn't come until near the end of the project. And so there's this mad rush to get things working and to find mechanical and electrical difficulties that can't be found until those subsystems or full systems are exercised with the software.
So the benefits that Agile brings to software is you can break things down into epics and stories and use cases. And you can actually get small parts of the software performing operationally, and they can be used to exercise subassemblies or components earlier on, and that gives you the ability to draw out issues that you may have with your other designs before you get to the final product.
So then, we move on to the concept of the minimum viable product. So that's a basic version of the product, relatively cheap and fast to build. But it has all of the key functions that you want in your product. And if you've been exercising different modules of that early on, you can get this working product to early adopter customers or even to market faster than you would a traditional product development. And therefore, you've got the ability to move things, you can do testing. You can make sure it works and you get it out there and get feedback from the market quite early. So that helps you with system integration. Resource leveling is all just a matter of juggling to get in a product development process.
So we could then move on to testing. So you've got your minimum viable product. How do you know it works? We've talked about having those subsystems working early, doing the engineering characterization of performance. You've obviously got the requirements document. And we talked about briefly the traceability matrix to measure how we meet the requirements. So you've got predetermined acceptance criteria.
You're obviously working with the standards that apply in the industry you're doing and that you're wanting to get into. And you've developed some test methods and they help you validate your equipment and consumables. It's important to be measuring statistically valid samples and including obscure corner cases for performance. We certainly found that at Fluidigm in low cell flow, low volume of cells, and you're off in a corner of the performance spectrum of the acoustics there. So there's a real effort in resolving your test program, testing enough items, testing them in strange enough situations that may occur that you've got real confidence in the technology.
You need to put effort into usability testing. So, Michael talked earlier about ease of use. How quickly does it take to load a consumable? Is that measured as a requirement? Can you comply with that? When the user is setting up the software, is it unambiguous? Is there a workflow through that that is quick and easy to use? So there are times you can put on that that will give you a solid measurement of how easy your system is to use, and that's certainly becoming a competitive item in the marketplace.
Reliability testing, a particular bugbear in mind, begin early and continue. Don't let your prototypes sit idle in the lab if they can be doing useful repetitive functions that tell you how it's going to work in the long term. Begin your subsystem integration testing as early as you have modules for that. You've got a process for managing design changes. Look at where those changes fit and how they impact your testing program. And then we move to the end in manufacturing process validations and getting your equipment installed at users places, and making sure that it fits their tests, and what they expect of their product.
I'll throw back to Michael.
Regulatory Pathways and Compliance
Michael Kinzie: So regulatory pathway, so bioprocessing manufacturing equipment are not medical devices. But we often get this question: is my product a medical device? And it really does depend on the intended use you have or plan to have for your product. And then think about what marketing claims you are planning to make. If you are making any claims about the cure, treatment, mitigation, prevention of a disease condition, then you are most likely a medical device. And that leads you down the road of complying with 21 CFR 820 for the FDA and/or ISO 13485 as applicable as well, and they're both well defined regulatory standards and the expectations are well outlined.
Bioprocessing manufacturing equipment are cGMP systems, or will be used in the manufacturing of cells for therapeutic use. So you can use GAMP 5 as well. It's a very good standard to follow. The systems have 3 distinct components or domains: the hardware, electrical, mechanical instrumentation or equipment, software and consumables. And realize that each of these domains, they have a different approach to even the design effort. But the quality assurance, risk management, usability and reliability, they all have to integrate. So the domains have interfaces to manage. And I'd recommend doing so with requirements.
Richard Grant: So we've got a cGMP product. We're manufacturing biologicals. What path do we take? We've got 2 paths here. There's the sponsor's path and the equipment developer's path. So the sponsor wants to work out that their therapy is producible and will have a positive impact on the patient, so they want to get the clinical trials as soon as possible. That sort of conflicts with an extensive and in-depth product development program from the tool provider's perspective.
And they can address that need for haste and also availability of product by going down a research use only equipment path. So this enables you to take the phased approach to implementing cGMP at your customers by providing them a device and consumable you're making lower levels of claims on. So your work as a technical developer is reduced because you've got claims for this early product that are less than the claims that you'll have for the cGMP product.
And to compensate for that, the customer will then be able to use your equipment and consumables in their phase one therapy production, and they compensate for the fact that you might not have electronic batch records enabled in your equipment by using their well defined manual written procedures and documentation and controlling all that stuff there.
It doesn't detract from the fact that you need to continue to develop your products as a technology provider to comply with the CFRs for drug production and finished pharmaceuticals that 21 CFR 210 and 211. But you can phase that in through the development of your equipment and consumables.
Both the sponsor and the technical provider should be using a quality by design process. So they type requirements in, they specify what they're doing, they do their design work, they verify. So a standard, high quality design of a product, process or a piece of equipment. It's a very similar process on those things. And as a technology provider, your product should enable your sponsor to demonstrate fitness for use so they can put their quality target product profile together, and they can get product that indicates that off your equipment. They need to identify their CQAs. Your equipment has to produce product that demonstrates those under testing.
And a final note here is anything that's going to be deployed into the European market needs to be CE marked. That's effectively a mandatory electrical safety standard for equipment deployed in Europe. It's a self assessment program, but it needs to be calculated into a development program and complied with, and there are similar electrical safety standards applied to the American market, and tested by firms like Underwriters Laboratory, and so forth.
So I'll pass back onto myself. So we've got a product. We've got a technical product that we're deploying into a cell therapy process, and you will have heard a lot about drug master files. What is it? Do you need one?
A master file is a voluntary submission of information to the FDA, and it's a way that your sponsor can be confident that the FDA has reviewed what your device and consumable will do, and that they don't need to disclose to them in extensive detail confidential and proprietary information. You disclose it to the FDA, goes on file there. The FDA will not review that file until it's referenced in an IND by a drug sponsor.
But it will be there. So as an equipment and consumable developer, it is one way of documenting your technology and putting it out there and getting the FDA to be ready to approve it. That doesn't require you to disclose all of your confidential information to multiple different potential clients along the journey to getting your product to market. So it does create an initial documentation load and ongoing maintenance. But it is one way of handling the how do I keep my proprietary information close to my chest?
So I'll pass on.
Key Challenges and Lessons Learned
Michael Kinzie: So some key challenges. Avoid the eleventh hour syndrome, if possible. Realities of early phase product development. I mean, there is a sticker shock. If you think about it, you really will have low volume product requirements for your customer. Your customer will have those low volume product requirement needs because you think about the time it takes for a clinical trial, and what we found often, that results in a high quote from suppliers, especially for consumables. And so another way of saying that: low volumes result in high cost of goods sold.
You typically don't realize volume discounts until after launch. And you're talking into the hundreds of thousands to millions of consumables as an example. And the other shock is that most of the early manufactured product goes to testing. So your customer may need 5 or 10, but you may need, depending on what the sampling plan is for performance testing, you may need in the 100 to 300 units.
So that just to let you know Dark Horse, we do have a database of contract engineering groups who we've worked with in the past and whose business models do support these early low volume needs. And there's also the one stop shop, if you will, where the product development is done at the contract engineering group. They transfer it to their manufacturing, and then they will be able to scale and commercialize with you for your product.
The other thing to consider for what Dark Horse can do for you, it's really an unbiased assessment of your product. We have expert cell and gene therapy operators and engineers that really can take your product and test run it. So in essence, let us kick the tires if you will, and don't let your customers experience these early avoidable issues. And if your product is already on site, we can provide user and engineering as well. On site assessments of how your customers are using your product and experiencing your product and provide that feedback to you.
Michael Kinzie: So lessons learned with prototyping. When you're in a prototyping design mode, you think about an onion. You will peel the onion. You'll continue to find things and learn things. So go as fast as you can by targeting those high risk technical elements of the design. This does result in learning fast. And then continue to get feedback and to work with those identified key opinion leaders and/or the potential customers that you had done the VOC with.
And then define working. It may seem obvious, but it isn't. I mean, there's a variety of things with that, especially when you describe as good enough, maybe, for the minimal viable product. But good enough for what? Think about working for how long or how many cycles, under what conditions, how reliable is the system? So really spend the time on defining what working is. Now you think about cell culturing. It's a 24/7 process. So the cells aren't going to go to sleep for you. And then complex systems have many opportunities of what could go wrong.
Another part of this is to really exercise the design of the product and the manufacturing processes used. I know this costs money, but it's well worth the investment. Be intentional about this when you have a valid prototype. Can I do it? Plan on building not a few, but many, again, realize that most likely you'll scrap most of what is built. But you will find defects which are better discovered sooner than later, and it is better that you find the defects and not your customers.
Just to give you an example, when I was at Terumo BCT as a product engineer on the COBE Spectra, my manager calculated we had supported the manufacturing of over 20 million apheresis kits. The consumable was complex, with over 200 manual assembly steps, some 90 components with a fully assembled and packaging kit coming off the line every 45 seconds. Yet the product still experienced defects. Not many, but those did require support.
And realize the cost of a design change in product development is really a penny. That change in manufacturing costs dimes. And but after commercialization, and once you have it in the field can cost dollars. And so that's all relative. I would say, spend the time for the preventative action of CAPA. Again with the pharmaceutical biologics, Subpart J, Section 211.192 is CAPA. But this gives you the opportunity of designing out the defect now in design, instead of the future state of a continuous corrective action in supporting manufacturing.
Test method development and validation can take as much time as the design effort. Don't end up in the position of a design is ready and say, "Great. Now, how do we test it?" That's just too late. If a recognized standard is not available to just demonstrate compliance, a test method would most likely need to be developed. This takes time and effort, and then ensure it is the right testing by validating it. Richard.
Richard Grant: Okay, in summary. I guess the key thing here is that for successful development of bioprocessing equipment, we're basically saying that this can be, and Madeline referred to it in her project plan earlier on, it can be an 18 to 24 month project. If you start with a proven science application. We're not making any assessment on, I've got an idea about a new way to process cells. And if it works, we can have a piece of equipment and consumable on the market in 24 months. We've seen clear evidence in our careers, Michael and I, of products that can go to market in 18 to 24 months. But they are taking a proven science application and turning that into a bench process.
So what do you need to do? You've got to understand your customers better than they understand themselves. Michael and I were talking earlier. Henry Ford went to the market and they said, "We want a faster horse." And he derived the need for a motor car, and that wasn't what the customers wanted, but it was what the customers needed.
You've got to demonstrate that your product fulfills a market need and does that better than competing products, and preferably better and cheaper. Definitely cheaper nowadays. The drive to drive product cost down for therapies is there. But you need to have a leg to stand on from a performance perspective as well.
Requirements are the foundation of your products. I can't emphasize that. Whilst it's a living document you still have got to get them right. They've got to be clear. As Michael said, the requirements document needs to be as long as it needs to be, and no longer. The requirements themselves need to be as long as they need to be, and no longer, and very much directed and measurable.
Address your high risk design challenges first. So anything scientific that isn't proven that will kill the product has to be a focus of early stage testing. You maximize the learning from your testing. Fail early and fail often. So you test things you're worried about. You don't test things you're pretty confident are going to work. All of these processes enable you to define your minimum viable product.
Get that out there, get that working, get it being tested, put it into customers. If the customers are returning your prototypes to you and they're not happy with them, then your product isn't a viable product. You need to work harder on giving them something that they want to have a prototype and don't want to return it to you, and then they'll come up with all sorts of excuses to keep that product in their facility if they're happy with it. If they're happy to give it back to you, things aren't quite right.
Select a regulatory pathway. We talked about that. If you want to go down an RUO to cGMP approval, then that's a clear strategy from an early point in your development.
And finally, you evaluate and select your partners carefully. You won't be able to do everything in house. There'll be a lack of either a skill set or perhaps a whole engineering discipline. Find people who can help you. Build a level of trust with them and work hand in glove with them, to take your product to market and to satisfy the market need.
Thank you. I think we're pretty much done, Madeline.
Q&A Session
Madeline St. Onge: Great. Thank you. Yeah. I'll just remind everybody that we have the remaining 15 minutes or so to answer questions. So if you haven't submitted a question yet, you can use the Zoom Q&A functionality.
We can start with one that we sort of covered a little bit. But I'll ask Richard maybe first, and then Michael, when we think about some of the biggest challenges that new entrants to cell and gene therapy tools and tech are facing. What is it that makes cell and gene therapy so much more challenging? And what would you highlight as the biggest hurdles that new entrants need to think about in their product development journey?
Richard Grant: Yeah, one of the very first things that every client says is "my cells are special." My process is different. So they want to modify the equipment. A lot of the equipment they're using, as I said earlier, is a scientific research piece of equipment, so it may not be particularly designed to do something that they need to do. So the approach that I've used at a number of places is to design the equipment with flexibility for process development but the ability to lock that into a GMP mode for manufacturing later on.
Other challenges range from your recognition in the marketplace. If you're a startup company, how do you differentiate your product from other products available, displacing those existing technologies? You've got to be a lot better to displace someone else's device from a clinical trial. There's a lot of embodied work and commitment to process that needs to be shifted if you're trying to replace someone's device from someone else's clinical trial.
And the flip side of that coin is, if you have something new, it's easier to get into someone's clinical trial, but if they haven't started it yet, but that means you've got more years and more risk involved in that customer before they actually get to market. So there's a lot to be considered there. And as Michael just mentioned, consumable manufacturing, early volumes are low, single use technology complexity is high. So finding a manufacturer is difficult.
Supply from those manufacturers has historically been intermittent and variable quality. So this is also a challenge. So finding someone who's actually going to make money out of making disposables is challenging. And I think as we get to autologous to allogeneic products, where you have your larger batch sizes being made out of single use disposables, the volumes will actually go down on single use consumables. And that'll be another challenge to the market.
And I guess one final one for me before I give Michael a chance to talk: commercial model. What's your commercial model going to be? There's a couple of commercial models out there which are viewed with cynicism or skepticism by the marketplace. But how do you plan to monetize your technology and how are you going to do that in a way that doesn't drive customers away from you? Michael.
Michael Kinzie: Yeah, I'll just add a couple of things, Richard. As Richard mentioned, if you think about each customer that their cells are very special, they're developed and cultivated in a certain way. So how do you design a system that can meet not only that customer, but everybody else who thinks the same thing? So you have 10 different flavors out there that your system has to be able to address.
And timing's critical. Because if you're in non-clinical work, it's a lot easier for your customer as a sponsor to include that in their IND submission and the CMC section. But then you're a decade out, probably before they get that therapy or drug product approved. And so but if it's a later phase, the challenge is that comparability studies, which can take a lot of work as well, so the barriers to entry into the marketplace, they're very real, and need to be recognized.
Madeline St. Onge: Yeah, thank you both. A couple of other questions have come in. One around the marketing, commercialization or business models, as you kind of alluded to Richard. So what kind of approach should be established with customers? And I think this question is referring to both the business model, but then, early in development with partnership. What do you suggest as best practices?
Richard Grant: Yeah, it's a great question. And I think it's a pretty much open question. We all know a couple of companies out there have a model that almost asks you to mortgage your firstborn child for the inclusion of their technology just in one manufacturing process step of your therapy. So that's challenging to get that over the line. And those companies have been successful to date because there isn't an alternative product that does what they want. I think, as more products come out, customers will have to become more realistic about what they ask from their technology providers.
The technology providers have to be more reasonable about how they commercialize their product. And there probably should be a dialogue between the final sponsor and the technology provider about, here's one path we can take down. Here's a royalty path, if you like, or it's all just going to be upfront costs. This is the cost for the equipment. This is the cost for the disposable, and as you get to different volumes, here's how that cost will go down over time. But it's a dialogue. I think the engineers will tell you what your cost bounds may be through the development process for the disposable and the equipment, and you need to work out what's the best commercial model for you. But I do think, opening a dialogue with a customer about how much they're prepared to buy, and how they're prepared to buy it, and how they will feel happy with that financial arrangement is important in the long term.
Madeline St. Onge: Thanks, Richard. Got another one here. I think this one for you, Michael. Are the equipment requirements different, depending on distance to the patient? So, for example, with allogeneic cell therapy products, equipment that's pre-master cell bank versus close to the patient. How do those change how you think about requirements?
Michael Kinzie: With regards to requirements, I'm not sure there's a whole lot of difference. The system needs to do what it needs to do, and let those requirements define that. I think the approach here would be the risk based approach. If you're closer to the patient, there's not a whole lot of mitigations that your customer, the sponsor, can provide to ensure the safety and efficacy for the patient. For example, if you're upstream and you're doing a leukapheresis pack, that goes through a lot before it gets to a fill and finish. However, that leukapheresis pack, the collection of it to patient connected to apheresis machine, those requirements are very stringent and rigorous, and the safety there is a very high level as well.
But you think about your customer and their manufacturing process, and where your system will fit into that. What step or stage? And then are there like multiple washing steps downstream that potentially, you may introduce an impurity that eventually gets washed out prior to patient dosing. So I mean, that's the way I would think about it is from the risk based approach as well.
Richard Grant: Yeah. So to add to that, I think as you're developing the requirements for your system, you're going to be aware of where the equipment is planned to be deployed. And there's a lot of time based requirements in cell processing process. So this step must take less than 50 minutes, or this one must be, there's DMSO involved. We need to remove the DMSO in 10 minutes, so those requirements will be developed knowing where the technology is likely to be deployed, and knowing the cell types and reagents likely to be used. So I think you customize the requirements to the device's location based on what you know about where that's going to be located. So it does drive a specific requirement. But you should know that when you're developing the requirements, so it will be customized to where the technology will be deployed.
Michael Kinzie: That's what rolls into, I would say the intended use of your device, because if they're using it, not as you intended to design it to be used, that's what I would call in medical devices as off label use. And you're not necessarily, like warranty claims. If they're misusing it or not following your intended use, you have at least a leg to stand on in a case to be built.
Madeline St. Onge: Thank you. Got a last couple of questions here. A two part question. One is raising capital for new equipment or product development is a significant challenge. If you're a relatively small business, investors don't understand cell and gene therapy equipment opportunities. Any suggestions? I think typically, when we're supporting clients in early stage, one of the things we can help them tighten up is the pitch deck. And we talked about this earlier, but really being clear on what problem you're solving. Sometimes we see issues with really exciting technology that's a solution looking for a problem. So really, being able to paint the picture of how you are going to improve a given process or unit operation, and whatever data you have, even at that early stage to back that up is really critical.
I think the other thing, given the economic situation the last year, year and a half, we are finding that some of the investors still in cell and gene therapy are fairly sophisticated at this point, and do tend to be more familiar with the space. So in that case, again, you really need to have your story tightened up, and they will know what they're talking about. And I guess one suggestion, too, is, if that's not the pool of investors that you're currently interacting with, that may be a suggestion is going to find the ones who are active right now in cell and gene, and maybe more able to understand your offering. I don't know Michael or Richard, if you would add anything there.
Richard Grant: Yeah, I know that I've had discussions with Rob and Anthony Davies about this, and they have some not so much drug manufacturing investors, but venture capital people who are a little bit more switched on to the market. So there is a portfolio of people who do understand the market who are looking to invest. So there are some more mature investors in the space that potentially could be approached. And with a refined pitch deck, maybe there's a path to travel there.
Michael Kinzie: And I think if you're able to prove that the technology is novel and superior to what's on the market today, I think that helps build the case. But understand that those technical risks and challenges, that 18 to 24 month timeline which investors are looking for, when do they get the return on investment, may not be realistic unless you have a really good understanding of that technology. But I think if that return on investment is reducing costs or even providing better therapies. I mean today it's been rare diseases, and so the patient population is relatively small. But with the sickle cell case, I mean, that's 100,000 patients now in the US alone, if not more. And then you think about there's quite a few companies working on Parkinson's disease. And that's a million in the US and 10 million worldwide, and unfortunately, as the population ages, that's going to grow. So that's, I think that's where that very future looking will help that pitch deck as well.
Madeline St. Onge: I think we have time for one more question that was submitted here. Is cGMP relevant for cell line derivation equipment?
Richard Grant: It's a good question. The follow on part of that was all processes were at some point not GMP, so I guess that gets to things like human serum albumin, and other ingredients that are used in a cell manufacturing process, that when they were developed were not under cGMP requirements. So the way the industry handles that is, they replace the bovine serum albumin with human serum albumin that is manufactured under GMP. So if you've derived a cell line historically with non-GMP equipment at some point, you probably want your cell line to be GMP ready.
And how do you do that? Well, the fact is, if it's a cell line that is pure and it's come out of that process and it's not contaminated, then at some point, someone's going to have to say, well, we can use that in a GMP process. So I think you would get there by evolution rather than making a massive change at any point. But it's a good question.
Michael Kinzie: The regulatory, if you think about the FDA, and often a lot of their guidances start off with the phrase that this is our current thinking. So that means it's subject to change as they learn more. So early on may have worked, but now if they see issues or safety and efficacy issues with that, they'll, cGMP has worked in the past for a variety of industries. So that's the other part of that. How do you stay ahead of the regulatory game as well?
Closing Remarks
Oliver Ball: Well, I think I'm going to have to cut you guys off before we run out of time, because this is a rich Q&A session that I don't think we've had time to answer, get through all the questions that are submitted. But if any of you have any more specific questions, don't hesitate to contact us. We can talk to you more directly about them.
Richard Grant: Yeah, all of it. We can probably answer the questions we've got open. We could probably provide a written response to those.
Oliver Ball: We can certainly do that. Okay, just before we wrap up, then just a quick reminder that the content will be available to view on demand. So you can find that on our website, we'll send information on how to access that so you can share with your colleagues. But for now, thank you, guys all for joining and keep your eyes out for future Unbridled Excellence webinars coming later in the year. Thank you so much.
Richard Grant: Thanks everyone.