84 TWENTYFOURSEVENBIOPHARMA Issue 1 / March 2026 DCAT ROUNDTABLE prohibitive. But for anything new, sponsors are building regionalization and dual sourcing strategies into the plan upfront. Dual sourcing is no longer a “nice to have.” For critical APIs, intermediates and critical raw materials, it’s quickly becoming standard so some innovators are increasing their internal manufacturing capabilities to retain process knowhow while maintaining their CDMO network for larger commercial scales. That doesn’t mean companies are abandoning China immediately. What it does mean is that they’re far more deliberate about exposure and redundancy once the asset is commercialized. We’re seeing “China plus one” evolve into something more robust, where the second source is real, validated, and ready to invoke — not just a strategic white paper that’s filed away. Raw material quality and cost from China is difficult to surpass with conventional manufacturing strategies. Ultimately, sourcing decisions are both strategic and procurement driven. Are customers prioritising cost control over resilience and innovation, or are you seeing a more balanced approach emerge? It’s a little more nuanced than prioritizing one over the other. Resilience is expected but savvy customers are willing to sacrifice the short-term cost for innovation in R&D to realize savings and achieve supply chain resilience over the lifetime of the asset. The difference is that companies are thinking in terms of total risk and total cost, not just unit price. For example, the API remains the largest cost contributor per unit price in an oligo pre-filled syringe. Sponsors still care deeply about cost, it’s the first and last question they ask! Especially given pricing pressure, but they’ve also learned that long manufacturing slot lead times can delay a program and cause headaches. At the same time, innovation matters more than it used to. For complex modalities, customers aren’t just buying a manufacturing slot; they’re looking for partners who can help make a process scalable, more robust, or more manufacturable. That’s driving deeper relationships and longer-term commitments, rather than one-off projects. To summarize, it’s more complex than cost versus resilience. It’s more that resilience is at table stakes and cost must be defensible, and innovation is increasingly what separates a preferred partner from an interchangeable one. Where do you see the most meaningful growth opportunities in the next 12–18 months - geographically or technologically? The clearest growth is where complexity meets scarcity. Technologically, peptides, oligonucleotides, and ADCs stand out. Demand is real, sustained, and in many cases still outpacing manufacturing capacity. Geographically, we’re seeing a divergence. High value, complex biologics are increasingly being anchored in the U.S. and Europe, where proximity, regulatory alignment, and supply security matter more than absolute cost. That’s especially true as customers think about commercial launch risk. What’s important is that growth isn’t evenly distributed. It’s accruing to CDMOs that combine real technical depth with the “right” geography. Having one without the other is increasingly not enough. What is the biggest misconception pharma companies currently have about the CDMO/API supply environment? The biggest misconception is that technology transfer is straightforward. There’s still a lingering belief that if a process works in one lab, it can be quickly and cleanly dropped into another facility. In reality, tech transfer is where a lot of programs get exposed. Having the scientists who designed the process and scale-down models perform an on-site transfer is key, along with detailed technical development reports and tech transfer documentation. “Lab ready is not plant ready” sounds obvious, but it’s routinely underestimated. Scale changes behavior— subtle equipment differences, heat transfer, purity profiles, raw material impurities, time for in-process control feedback loops —and those issues don’t show up until you’re under real manufacturing conditions. Ensuring a successful transfer takes the right process development expertise through design space understanding. The second misconception is around capacity. On paper, there’s plenty of capacity being built. In practice, accessible, geopolitically acceptable, and technically appropriate capacity is much tighter — especially for anything complex with a view to on-shore manufacturing. That gap is driving creative approaches to address the shortfall. Finally, companies often underestimate the existing inherent process knowledge within their current CDMO beyond the technical reports and batch records, no matter how painful it was to get there. Moving to a new preferred CDMO should be carefully planned so that you can easily dual source API suppliers late in development; this is one of the most expensive assumptions in this space in-order to mitigate risk and cut costs.
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