Mr. E.J. Brandreth: Hi, welcome to Althea Technologies. I'm E.J. Brandreth, Head of Quality and Regulatory Affairs, and I'm gonna talk to you today about the CMO world

I'd like to start off with the regulations. We're all under the FDA's code of federal regulations. And so, the first slide really goes over the wide variety of regulations that we must follow

And I'm not gonna go into these in detail, but as you can see from this slide, there's a good deal of regulations out there that people must follow

The regulations explain the law, but they really don’t explain the how, how do you follow the law. And in order to do that, the FDA has issued a great deal of guidance for industry. And these documents are really a goldmine for finding out how do you meet the regulations

There's guidance for industry, there's guidance for reviewers. These are guidance documents that the FDA uses to look at drugs, look at submissions and look for what are the details that are critical to the product

There's also FDA documents called inspection of. These are the SOPs the FDA uses when they go to inspect your facility. So, you can look at these documents and see what are the key things the FDA really wants to see in your facility. So, these are very helpful in making sure that you're meeting the regulations

There's ICH guidelines. These are harmonized across the United States and Europe and the rest of the world. And this was a huge step over the last ten years to bring the regulations into one document that everybody can follow so that you--if you follow these documents, you're in general meeting the world's expectations

There's also PDA technical reports and journals. There's the USP. The USP is again just full of information on anything from technical monographs to clean rooms. And the USP section's under 1,000 are actually legally binding. Over 1,000, those are just document--good documentation, good practices for the industry

There's the World Health Organization - has a great deal of documents - Federal Register, trade journals, articles, the Gold Sheet--FDA conferences and presentations are a great place to really learn why the regulations are in place and how you meet the federal regulations

Warning letters and observations from inspections of facilities are also a great place to look and see how did somebody get in trouble. Those are really the, you know, what not to do in the industry because these are sanctions where the FDA has gone in and found somebody to be doing something that they felt was not meeting the spirit of the law

And so, by reading those, you'll get an idea of what not to do, which brings us to the world of the CMO. At Althea, we're a contract manufacturing organization, so we have a wide variety of clients

On this next slide, you see that we have big pharma. So, these are companies with comprehensive quality assurance departments. They have their own quality agreements they bring to the table. They've been doing these things for years and years. They're financially secure. Cost is not a major issue for them. They understand that getting the product out there, making safe, good product is their number one priority

And they have lots of experience with FDA submission processes. They know what they need to tell the FDA and when they need to tell the FDA

At the other end of the spectrum, we have virtual bio techs, which has very little quality assurance departments, sometimes no quality assurance at all. They simply hire a contractor or a consultant

They don't have a quality agreement. They rely on the CMOs. They are--often have very small funding, very limited amount of money. And so, decisions are often based on available funds rather than what's the best process for a regulatory filing

And they have much less experience with the submission process. And many times, they'll rely on the CMO, on us to tell them exactly what is expected by the agency

We also have a wide range of projects from these clients. A client could come in for a commercial filling. And on a commercial fill line, we have a comprehensive history. That product has been made over and over, dozens of times. So, you really have a great deal of data on exactly what that process is capable of and all the process parameters

The process is very well understood. Deviations should be very rare. When they occur, you should do a very deep and wide investigation, look at what happened with that lot as well as could that happen to other lots or has it happened at other lots and you didn't--you weren't aware of it

So, when a deviation occurs on a commercial fill, that's a big event. The specifications are very tight. Again, the process has been run many times. The company has a good deal of data to do and a statistical analysis and really tighten the specifications to know that you are in control, and when things go wrong, that you are--that you're detecting that because things would be out of specification or out of your alert or action limits

And so, these big pharma commercial lots are very low risk because of all that data and history they have. At the other end of the spectrum, you have phase one biologic products. These are products that came straight from the process development lab, and this is the first time that they are in the facility. They've never been run in a GMP suite before

So, this is really--it's a voyage of discovery. There's no GMP history on the lots. This new process knowledge is being gained. You're gonna have deviations. You're gonna have a lot of deviations

A lot of these can simply be addressed by making comments in the batch record because you really are discovering things the first time these things are being run in the bio reactors

Your investigations, deviations, certain ones do need to be investigated. You want to prevent them from recurring. But, a great deal of that could be simply due to it's the first time that it's been run in that equipment, and so the investigation doesn’t need to be nearly as comprehensive as a commercial investigation

Specifications are very wide. At that stage of the process, a good deal of information is for information only. There is no limits on it. You're gathering this information so that, over time, you'll be able to see what the history of the product is, and then you'll set your specifications as you move further down the clinical path

And these have moderate risk. But, again, these are phase one trials. There's very few patients in the trial. The public is not exposed to these products, and--the general public is not exposed to these products. It's a limited group of carefully monitored patients

And so, there's some risk, but the risk is never zero

And in the CMO world, because of this wide range of products, somebody can ask, you know, what is your process, what is your product that you make. Well, this slide shows you that, yes, it's a defined product. It's anywhere from 2 to 100 mil [sp] clear or amber vials, 13 to 20 millimeter stoppers. Viscosities can range from non-viscous to something as thick as syrup

Clear to opalescent to flocculent, it may be opaque or blue or white--we do small molecules, proteins, plasma, suspensions, emulsions, conjugates. So, really, a CMO has to be flexible to be able to handle this huge variety of products coming in with all these different parameters

In the CMO world, it's a showcase for equipment. The great thing is that your equipment is being looked at by clients over and over, week in, week out. So, the equipment vendors really want to make sure that their equipment is working well, that you're gonna tell the client, hey, you should buy this equipment because we bought it, and it's very robust, it never fails, we get great customer support

So, the CMOs do get really good equipment support, and they usually have the best equipment out there

The other big aspect of a CMO world is we get audited on a weekly basis, sometimes twice weekly. Clients bring their quality people in, and they do a quality audit, starting from a tour, they go through all the quality systems, and they do a wrap up at the end of the audit with any observations and corrective actions

And so, a CMO gets constant quality input. So, you really do get all this free information from industry experts on a constant basis, which really improves your quality systems overall

And you learn the best practices across industry. You hear from these consultants and inspectors coming in, well, we've seen it done, you know, this way at this company or another way at another company, and here's the best way to do it, here's some new trends in the industry.

So, it's really--it's the best of the industry you're exposed to

You get European audits from QPs, qualified persons. You get annual or biannual FDA and EMA inspections

And with all those inspections, your SOPs are very well written. Whenever people look out our SOPs, they say, well, for one thing, you've got a great deal of SOPs, and they're all really well written and they all match up very well. Well, that's because they've been looked at on a weekly basis for the past ten years. There's no major gaps in the systems

Any time you go in and you do a system analysis, a gap analysis--on a new company, a lot of times, you'll find that there's a system missing. Well, because we're audited so many times, there are no major gaps in the systems

And then, our personnel - they give great tours of the facility. They've been giving tours all the time. They know what questions they're likely to be asked, they know the details of those responses, they know the layout, they know how to take people through the facility and show them the key things that have come up in previous inspections

And so, the subject matter experts are really fluent in their systems

Then, we look at the regulations and the culture that's in a CMO. And one of the key things that the FDA is really emphasizing these days is that all parties are responsible and liable for CFR compliance

In fact, you'll see this recent warning letter where the firm told the FDA, well, you know, we told our client they should validate their methods, we kept telling them they should, and they refused to pay for it, so that's where we are

And the FDA found that objectionable. They said, no, you are responsible for ensuring that the test methods that are used at your firm are validated. You can't just say, well, the client wouldn't pay for it, so we didn't do it. You are responsible for being in compliance in your facility

And ownership is really a meandering stream. So, if we look at this next slide, the ownership at an aseptic filling, we have no control over the client's API manufacturing. We don't go and audit that facility

We have to trust that the product coming in to Althea is made within the GMPs

But, we do have to make sure that it's not going to affect our facility. We want to make sure it's clean, it doesn't have endotoxin or bacteria or viral contaminants, because if we brought something into our facility that contaminated our facility, that affects not only that product but all the other products that are in our facility

So, we do make sure that the products coming in are at least clean and are not gonna affect our facility

We work out the batch records with the clients. It's a mutual agreement on what is in the batch record, if the client wants to take additional samples or do different things in the lot. As long as it's compliant, then we write the batch record and approve it with their edits in it. And so, we execute against the batch record

If there are deviations, we work out the deviations with the client. We do an investigation that we're both mutually happy with and that we know is a good GMP investigation

One of the key things is that a CMO does not release the product to the patients. The CMO dispositions the product to the client, and it's the client who releases it to the patients

So, we disposition it for a release, but we don't actually do the release our self

So, the client takes the responsibility of the release to the patients, but that doesn't absolve the CMO from their responsibilities in the manufacture and the assurance that that product is a safe product and is not gonna have adverse events in the clinical trial

Once the product is out there in the clinical trial, the CMO is still responsible. If we know that there's something that occurred during the manufacture, we have to notify the sponsor immediately if there's any safety issues, if there's any compliance issues and work that out with the sponsor

So, as you can see, the responsibility goes back and forth. While the product is here, it's a mutual responsibility. And once it leaves the CMO, the CMO still has some responsibility for that product

When you look at the relationship with a CMO and their client, there are two aspects to it. There's a business aspect, and there's a quality aspect

Obviously, we're providing a service. There's a fee for that. There's a schedule and a contract. And so, those are financial negotiations

But, there's also a great deal of quality based negotiations to make sure that we are meeting the regulations and that the client and the CMO both understand what it means to meet the regulations and what those expectations are

So, we have compliance based negotiations and decisions. And so, between those two factors, we've got the business negotiations and the quality negotiations

And overall, there's an overarching consideration, and that is that patient safety comes first. You want to do no harm

So, GMP compliance is required. It's required for the project. And non-compliance--if a client asks us to bend the rules a bit or skip a test or something of that nature, that not only affects that lot, but it affects our entire company and all the other clients' lots, as well

If we're found to be doing something that's not in compliance with one lot, you know, how do they know they're not--we're not doing that with everyone's lots

So, we really--CMOs need to have extremely strict compliance and make sure that they aren't jeopardizing all of these clinical trials, all these patients and all these products that are out there

And so, a partnership really needs to be made between the CMO and the client. The value of the partnership is really formed

We succeed or fail together. And technically, the FDA recognized this relationship and they actually put it into law, and that's CFR 200.10, which is the contract manufacturing section of the act, which says that we should be, as a CMO, we should be an extension of the clients' quality systems

They need to make sure--they--that's why they come and do the audits here. They're required to by law. They need to make sure that we're meeting the GMPs just as much as they need to be--make sure they're meeting the GMPs

However, it's--a client really needs to be careful about changing a CMO's quality systems because you've got to remember, a CMO's quality systems have been developed over years and years with interconnected SOPs and procedures. So, if a client says, well, you know, we want you to change this one SOP, the way you do this one thing, we like it to be done this one way and that's the only way we like it to be done, if a CMO makes that change, there could be unforeseen consequences of other systems at the CMO

So, really, a client needs to look at a CMO as are they FDA approved, have they got a good history, do they have good quality systems, maybe they're not perfectly matched to what that client has seen at their own facility, but do they meet the regulations. And if they meet the regulations, then everybody should be satisfied that they can go forward with good GMP product

And to that point, it's good to put all of this down in writing on what your expectations are. And so, a quality agreement is formed, and this is separate from the contract. A quality agreement looks at who is responsible for what as far as GMPs go, and it defines the timing of communications, error reporting, if you had an out of spec, how fast do you notify the client, do you do retesting, do you work with the client on how much retesting you're going to do because retesting really depends on the assay and the stage of the product

FDA interactions - when do you report things to the FDA, when does the sponsor report things, what do they report, do you support those reports with your own data - all of that goes into the quality agreement

And what the quality agreement shouldn’t have is just a repeat of the GMPs, because if a client says, well, let's put into the quality agreement that you shall have a training program, that you shall have a raw material program, you're really filling up the quality agreement with things that are redundant with the GMPs. The very beginning of the quality agreement says that the CMO is gonna make the--this product in accordance with the GMPs

If you start filling it up saying, oh, by the way, the GMPs are this and this, you're just filling it up with a lot of fluff, and that dilutes the real critical issues in the quality agreement, which are who's responsible for what, what do you report to each other, who writes the deviation, who's responsible for approving the deviation

Those are the things that are really critical to a good quality agreement

So, lastly, I'd like to finish with some of the hot topics in the industry and a few of the hot topics in the CMO world specifically. Right now, the industry has a big issue with mold. These facilities are not sterile, so you are gonna find mold occasionally. And people have cleaning programs, sanitization programs that are validated to make sure that the recovery of spore formers, mold, bacilli is minimized

But, there have been facilities where there's a source of moisture hidden in a wall somewhere, and that's--an unknown source of mold. So, it's a problem, it's a contamination, and the facility does not even know the--the personnel in the facility don't even know it exists until it becomes a major problem

And so, that's the sensitivity. When you find mold, is it incidental, is it normal flora, or is it really the tip of an iceberg that is going on unnoticed, and it's really going to become a problem down the road

The other topic, visible particles - when--we all want vials to be free of any sort of contamination, any sort of a particle. But, it's not a perfect process

The--these vials are 100 percent inspected by machines or by humans. And even then, it's not perfect. There's always gonna be some amount of reject

The key is that we keep driving to zero reject. Zero is the goal. And we keep seeing better and better equipment and techniques coming out to drive towards zero. But, that's an issue in industry that we want a continuous improvement towards zero particles

Glass particles shedding - that's a new phenomenon that came out the last few years with certain formulations where actually the glass inside the vial is delaminating in small tiny sheets, and that's being addressed by knowledge of what your formulation is and does it have a potential to affect the glass

And finally, viral contamination mammalian systems - there are a great deal of new molecular methods out there for detection of viruses that are more sensitive than ever, and we're gonna be seeing those being implemented over the next few years and much better control over viruses, especially in the mammalian systems

Weak investigations - this goes against the whole industry and CMOs. People have a deviation, especially on a commercial product, and they won't do a thorough investigation. They really need these investigations to not only look at the lot that's in question but also look at other rooms in the facility, other facilities, other products. Did this event occur somewhere else and was undetected? And what are the corrective actions? Make sure the corrective action really fixes the problem. And preventive actions - look at fixing it long term

The corrective action takes care of that lot and that situation, but you really want to have a preventive action to make sure that this just doesn't happen again

Recurring problems are a sign that your corrective actions or your preventive actions are not effective. And so, trending of your deviations, trending of the root causes is very critical for assuring that you have good quality control

Finally, shipping under quarantine - everybody is under tight timelines, and so everybody would love to have a product filled, inspected and shipped off to the distribution center so it can get labeled and it's ready to go in to the patients. But, that product needs to be tested. It needs to--the batch records need to be reviewed. If there are deviations, they need to be closed out before that product goes in to patients. The lot needs to be released

And so, a lot of people historically have shipped under quarantine out to the distributor in order to meet those timelines

But, the past five years, that action has been really frowned upon by the agency. There have been a few incidents where lots actually got out to the patients that should not have gotten out

So, shipping under quarantine now should really be a rare event. It should be a stock out situation where if that product doesn't go out the door, there are cancer patients that won't get their drug

Those kind of situations justify shipping under quarantine. But, otherwise, simply because you had poor planning or your CEO told you that he wants to get things going as fast as possible, those are no longer good justifications for shipping under quarantine

So, finally, you know, I'd like to close this just by talking about how that there's three parties involved. There's the agencies, there's the client, and there's the CMO

And all of us, when we work together, we all want great product to go out the door. We all have financial limitations, financial pressures, we all have scheduling pressures. Nobody's immune to that

But, the key is you've got to meet the regulations. We're all held accountable to the regulations

So, the bottom line is to foster the relationship, get the details and documentation and deliver on the agreements. Thank you