Monday, December 08, 2014 10:59:12 AM
If ARGUS just recently broke ground on their manufacturing center, then they are far behind Cognate in the manufacturing learning curve.
I've attached a few links for you around some history regarding biologic manufacturing and the challenges.
1. http://www.pharmamanufacturing.com/articles/2013/1305-biotech-facility-transformed/" rel="nofollow" target="_blank" >http://www.pharmamanufacturing.com/articles/2013/1305-biotech-facility-transformed/
2. http://www.bioprocessconsultants.com/bptc/sites/default/files/articles/jones_sd_levine_hl_mckee_s_-learning_curve-rprnt.pdf" rel="nofollow" target="_blank" >http://www.bioprocessconsultants.com/bptc/sites/default/files/articles/jones_sd_levine_hl_mckee_s_-learning_curve-rprnt.pdf
It takes a long time for a company to realize the greatest production/cost benefit. At initiation of any new facility, production is low and cost is high. It takes years to get that ratio optimized. The learning curve is substantial and a very step by step process. There are no real sustainable short cuts.
The first URL is case study for Boehringer Ingelheim, a company that specializes in contract manufacturing for other BioTech firms. Even with all of it's manufacturing experience and expertise, it still took Boehringer 2 years to get a new site up and running and at an acceptable level of efficiency. I find it difficult for Argos to perform this same feat without at least the same minimum of 2 years. Of course, the short cut is to screw the efficiencies and hope that their product will generate enough volume sales will eclipse the high COGS.
NWBO has dedicated a substantial amount of time and research to get their manufacturing to where it is. Link 2 provides a high level summary of the general challenges that Cell Therapy manufacturing brings.
In short, NWBO must either "Scale Up" (more efficieny) and/or "Scale Out" (more facilities) route. Through Cognate's efforts, they have moved to near the top of the Dendritic Cell manufacturing learning curve with any additional improvements bringing in substantially less gains then the overall cost. NWBO is shifting their manufacturing strategy to "Scale Out" to ensure their is sufficient production to meet future demand, especially for Europe.
DNDN failed to "Scale Up" during clinical trials. This put a low ceiling on their overall manufacturing knowledge. As such when DNDN began to "Scale Out", their facilities around the US were very inefficient and required a significant amount of sales to support and be profitable.
I don't know much about Argos and their product. My current job is in supply chain and manufacturing. I understand project timelines and how long it takes to walk the learning curve from the bottom to the top. Every variable is significant from dependable raw material delivery to production line layouts to finished good storage and final shipment. I would be blown away if Argos is able to deliver Cognate's level of manufacturing efficiency once the facility has been completed. I would have to learn more about how they did it, but till then I am going to step back and assume that more more dilution will be needed by Argos to fund future manufacturing improvements.
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