CMC Development Strategies for Small Pharma

James Bernstein Ph.D.

A significant trend in the pharmaceutical industry is the increasing proportion of early drug development carried out in smaller organizations, as opposed to the large vertically-integrated pharmaceutical companies. Most of these small organizations use contract development and manufacturing organizations (CDMOs) for the Chemistry, Manufacturing and Controls (CMC) aspects of development. In this model of drug development, a small innovator organization works in partnership with contract organizations for the early non-clinical, clinical, and CMC aspects of drug development.

With their small size (often less than 50 persons), small innovator organizations seldom have a sizable CMC group within their organization. It is common for all CMC activities from pre-clinical through Phase 2 to be coordinated by one or two individuals, often simultaneously with other responsibilities. Given the typical background of personnel in small innovator organizations, the responsible individual often has limited direct experience in cGMP or CMC development activities. In any event, covering the whole range of outsourced CMC activities for even a single New Chemical Entity (NCE) is a challenging task for a single individual. As a result of these factors, small organizations often fail to take advantage of phase-appropriate CMC development strategies that can reduce costs while building asset value. The result is that scarce resources are spent on CMC activities that do not contribute significantly to early-phase asset value.

For small molecule new chemical entities (NCEs) in development, the value drivers are typically intellectual property, safety and efficacy. The CMC profile is often less important unless there is a major weakness in the molecule’s properties, e.g., very low solubility, poor stability, or inappropriate pharmacokinetic (PK) profile. In contrast, for an active substance that is a large biomolecule (multiple molecular structures, high molecular weight, and produced by biological processes) the means of administration into human and animal physiological systems may be a valuable part of the asset. Additionally, there are many routes of administration for small molecule NCEs where the delivery technology comprises a key part of the value, inhaled drugs being an obvious example. However, for many small molecules, CMC development principally enables non-clinical and clinical development, and does not drive asset value. In this scenario, CMC activities not contributing to the value of an asset represent resources that could be made available to other development tasks.

With this background, the topics for discussion are:

  • Challenges in the small pharma – CDMO paradigm
  • Regulatory framework required to support phaseadapted CMC development
  • CMC development strategies

Challenges in the Small Pharma–CDMO Paradigm

The client – contractor relationship is at the heart of this small pharma-CDMO paradigm. The small pharma organization advances a drug candidate through sufficient non-clinical and clinical testing to determine a likely product safety and efficacy profile. This is typically the product of the small pharma organization: a clinical-phase asset, marketed to middle-size and larger pharma companies that possess the resources to take the drug through Phase 3 and to market. To develop this clinical-phase product, the small pharma organization depends on its CDMO partners to develop and deliver active substance, drug product and methods suitable for the execution of nonclinical and clinical testing. Significant funds are at stake: a typical cGMP oral drug product manufacturing campaign may cost US $50,000, and a typical ICH-style stability study may cost about the same. Compounded across multiple batches, placebo studies, and active substance manufacturing, the CMC budget may easily exceed $500,000 before Phase 2 is completed.

When the small pharma depends on the CDMO for strategy, competing factors should be recognized. To retain clients and attract return business, the CDMO would want to keep project costs down and success rates high. However, it may also be in the CDMO’s interest to conduct development programs that discharge more CMC risk than necessary. Such conservative approaches might include more stability studies than necessary or a full-scale non-GMP engineering batch for a routine process. These studies reduce risks to delivering the required materials and processes, but the additional cost to the client might be out of proportion to the relatively small amount of risk reduction. The overall probability of success of the CMC tasks for many NCE’s during early clinical development will be greater than 95%. Small pharma should examine the regulatory and scientific value of studies and weigh the cost versus the discharge of risk.

Some CDMOs may respond to this situation by positioning themselves as skilled scientists for hire, without advising the client on the strategic value of the proposed work package. From the CDMO’s viewpoint, it might be better to deliver the contract regardless of the quality of the development plan. If the client requests a stability study for a drug product or drug substance batch that is adequately supported by a previous study, some CDMOs may reason that it is not their responsibility to disagree with the client. After all, the sponsor sets development strategy, and is the party interacting with regulatory agencies for the drug’s development. Note that regulatory authorities hold both parties responsible for meeting cGMP requirements.

Small pharma as well as CDMOs are not of a single character. From the CDMO point of view, clients seem to come in at least three types:

  • Those seeking the CDMO to provide well-trained, competent technicians to use the client’s methods, processes and strategies;
  • Those seeking to have CDMO advise them on strategies and to design and carry out a scientifically-sound development program; and
  • Those professing to be of one or the other of the above types, yet are found (either before or after work is completed) to be of the opposite type.

Contract organizations also cover a range; the extremes perhaps being the larger CDMOs that can deliver excellence in Phase 3 and commercial manufacturing and, on the other end, the usually smaller organizations that excel in science and collaborative working relationships with clients. Of course, between these extremes are many organizations that seek and achieve some measure of success in both disciplines. The best small pharma-CDMO relationships are those in which both partners accurately perceive the strengths of their union, and do not hesitate to seek assistance from other sources to address weaknesses.

Another challenge in this paradigm regards the personnel involved. For small pharma, particularly during the stage when the first drug candidate moves into cGMP and clinical CMC phases, there is likely to be limited CMC and cGMP experience available internally. If CMC is not a value driver for the drug candidate, then many small pharma begin CMC and GMP tasks without an internal CMC-dedicated scientist. This makes sense from a resource point of view; however, small pharma should recognize the risk this plan creates as the CMC tasks multiply. On the CDMO side, at least two difficulties exist: the first being to attract the highest-caliber scientists into an environment that has enough scientific opportunity to retain these scientists, and the second being to develop a broad-base of experience for their scientists that results in an understanding of CMC development strategy, not just the associated tasks. The summary of the personnel challenge is that often, neither the small pharma nor the CDMO have the scientists on-board to guide CMC programs from a broad base of relevant experience.

The small pharma – CDMO relationship carries these challenges:

  • Conflicting pressures on the CDMO
  • Limited CMC development experience for the small pharma organization
  • A risk adverse attitude due to insufficient development experience on both sides of the relationship Many CDMO-small pharma partnerships have faced and overcome all of these hurdles, and have delivered important new drugs to patients.

The Regulatory Framework

The regulatory structure around which smart CMC development must occur (in the current highest-value markets) principally comes from the United States Food and Drug Administration (FDA), the European Medicines Authority (EMA), and the International Conference on Harmonization (ICH). Both FDA and EMA recognize ICH standards, but the initial thrust of ICH standards was propelled towards marketed products. With the issuance of ICH Q7 in November 2000, ICH Quality Standards began to provide guidance to address CMC quality during the clinical development phases.

Table 1 lists a few core guidances from the FDA that address CMC aspects for clinical development. The most significant might appear to be the cGMP guidance for Phase 1 clinical materials, but this author’s experience is that relatively few CDMOs take advantage of this guidance, which may be more applicable to academic or small innovator companies. One possible reason that CDMOs may have difficulty taking advantage of this guidance is the considerable risk of trying to maintain different levels of cGMP compliance within a single organization.

One of the key guidances listed concerns meetings with FDA available to all IND sponsors. Taking full advantage of these meetings, especially a dedicated CMC End of Phase 2 meeting and a pre-NDA meeting, is one key to an efficient development strategy.

Table 2 lists EMEA documents relevant to clinical phase development of new pharmaceuticals. In particular, the March 2006 guidance on Investigational Medicinal Products (IMPs) offers useful details on what information is expected to be provided.

An example of a development phase-sensitive topic addressed in both EMA and FDA guidance (also progressing in ICH M7) is that of genotoxic impurities. Examples of regulatory authorities requiring sponsors to address limits and tests for potentially genotoxic or carcinogenic impurities are familiar to most regulatory scientists. The phase-appropriate aspect is that both authorities have a staged limit on genotoxic and carcinogenic impurities, according to the duration of the clinical study. For studies of less than 14 days’ duration, the FDA’s qualification threshold of no more than 120 micrograms per day can often allow a sponsor to use HPLC without mass spectrometer detection to quantify the presence of any impurities for early clinical studies. This allows sponsors to stage expensive method development (typically HPLCMS/ MS) at a development phase when some safety and efficacy risk has been discharged.

The ICH guidances are limited in direct application during the clinical phases of development; only ICH Q7, the Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients, explicitly includes first takes advantage of the FDA guidelines on cGMP for Phase 1 clinical guidance applicable during the clinical development phase of new drugs. The ICH guidances are frequently referenced by small pharma and CDMOs for topics such as method validation and impurity specifications. Whether by contract organization or sponsor, the rationale appears to be that without quantitative guidances applicable during clinical development, a safe stance is to apply the relevant ICH standard. For example, impurity specification is a common area where ICH limits are often quickly applied during early clinical development. The small pharma organization may not have the regulatory and safety assessment resource to develop a sound policy on acceptable impurity levels during clinical development – with the result that ICH limits are applied during early development. The genotoxic impurity topic is almost unique in this regard, having established impurity limits tied to duration of clinical studies.

CMC Development Strategies

These strategies are described across two dimensions: the properties of the active substance and the functional areas of synthetic, formulation and analytical science.

CMC Development Strategies Adapted to the Properties of the Active Substance

While there are many properties of the active substance that can influence CMC strategy for small pharma, an obvious group of properties to consider are those embodied in the Biopharmaceutical Classification System (BCS) for oral drugs first described by Amidon et al., and subsequently adopted by the FDA [1, 2]. Consider the case of a BCS I compound, noting that regardless of the absolute value of its solubility, what matters is dose solubility. In early phase work, there is often considerable uncertainty about the safe and effective dose, and more than one BCS category might be possible. A BCS I drug is fully soluble at the anticipated dose in 250 mL of media across the range pH 1 to pH 7.5, representative of the physiological pH range found in the human gastrointestinal (GI) tract. Further, a BCS I drug has good permeability and is therefore well absorbed across the GI membrane. The short message is that formulation approaches for such a drug (assuming no other issues such as stability) have significant latitude and flexibility during development. An acquiring company or partner could change the dosage form composition or process with minimal risk up to Phase 3. So the CMC development strategy for small pharma should be to not over-develop the formulation for this asset for early clinical studies, as this effort adds little to the value of the overall program, which will be driven by safety and efficacy.

In contrast, consider a BCS II compound, particularly one that is strongly challenged in terms of solubility. Here, the development of a dosage form that reliably generates useful human exposure may contribute significantly to the value of a development asset. In this situation, the earlyphase small pharma company should demonstrate to potential partners that a methodical, science-driven approach to formulation has occurred and that formulation issues are solvable.

While CMC development plans and timelines are outside of this article’s scope, small pharma should appreciate the impact that active substance properties will have on the cost, complexity and duration of the CMC development programs.

CMC Development Strategies by Functional Area

Strategies for Drug Substance Development for Clinical Studies

In the synthetic area, three strategies are offered for consideration. The Practice Guide for Active Pharmaceutical Ingredients, explicitly includes first takes advantage of the FDA guidelines on cGMP for Phase 1 clinical studies [3]. This guidance recommends that manufacturers document the starting materials and reagents used in the synthesis of drug substance used in initial Phase 1 clinical studies, but stops short of recommending batch records. Some organizations have adapted their processes to document in laboratory records all of the information normally expected for cGMP synthesis, but to do so in a laboratory notebook or equivalent record. Then at the last or next-to-last synthetic step, more typical GMP controls (e.g., batch records) are introduced. This provides assurance that isolation of the drug substance takes place in a cGMP environment with its appropriate controls.

A second strategy long used by some organizations is to synthesize a drug substance batch of sufficient quantity to conduct both the necessary safety studies and the first in human studies. This reduces the synthetic cost by requiring only a single batch, and guarantees that the impurity profile of the clinical batch is fully qualified.

The third strategy addresses the costs of a long linear synthesis, or a convergent synthesis when one or more fragments have lengthy synthetic paths. Most small pharma sponsors now identify a suitable intermediate as representing the start of GMP synthesis, and that intermediate is often outsourced as a non-GMP material, thereby lowering the cost. The optimum strategy identifies synthetic intermediates that the FDA will accept as regulatory starting materials. The sponsor should make the most of the opportunity to gather historical data regarding control and fate of impurities in the regulatory starting material. Agreement with FDA on the definition of the regulatory starting material(s) is sought at the End of Phase 2 meeting. FDA thinking on regulatory starting materials continues to evolve with the recognition that many firms are seeking to use this strategy, and that the earlier requirement that regulatory starting materials be commercially available has not necessarily conferred a higher level of quality in the final drug substance.

While there is more flexibility than many organizations use, there are aspects to development where early investment pays well. Besides smart selection of regulatory starting materials, using a synthetic process that avoids overly hazardous reagents, avoids intermediates with genotox potential, uses scalable chemistry, selects early for a solid state form based on a thorough solid-state screening study, and settles early on a the final isolation solvents will generally create a package attractive to potential partners and regulatory authorities.

Strategies for Analytical Methods and Testing Of Active Substance during Clinical Development

While often treated as a ‘supporting’ element secondary in importance, the cost of analytical activities adds up quickly and often occupies the critical path to material or submission milestones. Some tactics that may be used in efficient development are listed below:

  • Start analytical method development activities as early as possible. Usually a competent analytical lab can start method development work with much less than a gram of drug substance, even 50 milligrams.
  • Use representative stability data to provide support for additional drug substance batches made by the same chemical transformations at the same site, and isolated by the same solvent system. A clinical drug substance should be supported by stability data generated according to cGMP. It is not always necessary for regulatory purposes to carry out stability studies on new batches of drug substances made by routes already supported by GMP stability data. Assurance that the subsequent lots possess the same solid state form, and are isolated using the same solvent system is required.
  • Validate analytical methods to a phase-appropriate standard during early clinical development. Both the FDA Phase I cGMP guidance and ICH Q7 specifically note that full validation of methods for clinical phase release testing is not required. For those validation characteristics evaluated, they should be restrained and should recognize the very rugged performance usually afforded by an externally standardized HPLC method. An article based on a PhRMA 2003 workshop provides helpful guidance [4].
  • Use a generic HPLC method (e.g. water:acetonitrile gradient on a C-18 reversed phase column) to characterize the drug substance for non-clinical and Phase 1 materials.

Strategies for Drug Product Development for Clinical Studies

Several useful approaches exist for the rapid manufacture of small quantities of drug product for initial clinical studies of orally bioavailable compounds. One popular method is weighing drug substances directly into capsules. A point to consider includes whether the investigational drug has suitable biopharmaceutical properties that are combined with suitable mechanical properties for use in powder weighing systems. Normal formulation development steps such as excipient compatibility and formulation development may then be staged later so that more project risk is discharged prior to initiation of the commercial-platform drug product program. A significant advantage of powder-in-capsule or powder-in-bottle approaches is the ability to cover the wide range of doses typically required in a single-dose dose-escalation study. This avoids the cost of developing multiple strengths of a capsule or tablet at a clinical phase when the effective dosage is unknown.

development is to use a liquid-filled capsule for actives which benefit from a lipid or other solution approach. Although a tablet or solid-filled capsule or soft capsule may be preferable for Phase 3 and commercialization, the short development times associated with liquid-filled hard capsules in early development are attractive.

In the cases where single-dose studies are conducted with an onsite formulation such as powder-in-bottle dissolved or suspended for administration, it is often useful to include in the first-in-human study a single dose level with a platform formulation such as a blend-filled capsule. This helps the team assess the degree of difficulty of formulating the active into an oral solid dose product, but retains the dose flexibility of solutions or suspensions for the single-dose dose-escalating study.

For sterile products, early development might make use of cold storage conditions if sufficient resources to develop a room temperature-stable formulation are not available.

Strategies for Analytical Testing of Drug Product for Clinical Studies

An obvious strategy for analytical testing of the drug product is to apply the same methodology as used for the drug substance, typically HPLC using identical method parameters (column, detection scheme, mobile phase, flow rate and injection volume). There should be confirmation of the absence of interference of any formulation components, but otherwise even some validation aspects such as linearity might be used in common for the two assays if the work is performed at a single lab. Using one method for both drug substance and drug product saves on development costs, and allows for the ready identification of drug substance-related impurities.

In the case of solid oral drug products, for the first clinical study it is reasonable to consider not setting a dissolution specification if the regulatory authorities will accept the approach. Disintegration assures that the active is released from the dosage form, and dissolution could optionally be reported for information only. This may save the costs of one or both of development and validation of a dissolution method for Phase 1 clinical studies. Consideration of the BCS category is also relevant to this strategy.


The use of phase-appropriate CMC development strategies maximizes the limited resources available to small pharma. This is particularly important given the nature of the small pharma – CDMO relationship, and many small pharma use consultants with large pharma experience. Recognition of the value drivers for each new drug is one key to selecting the optimum development strategy, and these value drivers are dependent on the nature of the new active and new drug product. Attention to the value drivers for a new drug or drug product also creates the most attractive asset for potential partners. Scientifi c and regulatory strategies are available to the small pharma-CDMO partnership for more effi cient development of new drugs.


Thanks to Randall Guthrie of RHG and Associates for helpful discussions on the perspective of contract development organizations.


  1. Gordon Amidon, H. L. (1995). A Theoretical Basis For a Biopharmaceutics Drug Classifi cation: The Correlation of In Vitro Drug Product Dissolution and In Vivo Bioavailability. Pharmaceutical Research, 413-420.
  2. United States Food and Drug Administration, C. (2000, August). Waiver of In Vivo Bioavailability and Bioequivalence Studies for Immediate Release solid Oral Dosage Forms Based on a Biopharmaceutics Classifi cation System. Guidancve for Industry . United States Department of Health and Human Services.
  3. US Food and Drug Administration. (2008). CGMP for Phase 1 Investigational Drugs. Rockville, MD: U.S. Department of Health and Human Services.
  4. Boudreau, S. P. (2004, November). Method Validation by Phase of Development. Pharmaceutical Technology , pp. 54-66.

Dr. James Bernstein is a pharmaceutical consultant with expertise in the CMC development of small molecule pharmaceuticals. He founded Live Oak Pharmaceutical Consulting Inc. in 2007 after 24 years of experience at GlaxoSmithKline. He also serves as Chief Scientifi c Offi cer of SOV Therapeutics Inc., a small drug development start-up. Live Oak provides the full range of CMC consulting needs (synthesis, formulation, analytical, regulatory, toxicology, statistics and project management) through its network of experienced consultants. Project phase and type include pre-IND through launch, review and guidance of sponsor’s third party suppliers, creation and review of IND, IMPD, NDA, MAA and DMF submissions, preparation for FDA meetings, and strategic decisions in CMC development. His responsibilities at GSK included the CMC leadership of multiple projects from pre-IND through Phase III, primarily in the HIV and diabetes therapeutic areas. Dr. Bernstein is a member of the American Association of Pharmaceutical Scientists, the American Chemical Society, and the American Society for Quality. Dr. Bernstein earned a B.S. in Chemistry and Physics from Centenary College of Louisiana and a Ph.D. in Physical Chemistry from the University of North Carolina at Chapel Hill.