Stuart R. Gallant, MD, PhD
Non-clinical development has two chief goals: 1) to develop safety data enabling the entry of the medicine into human clinical trials and 2) to manufacture and release one or more lots of the medicine to supply the clinical trials. The data from these two activities are provided in regulatory filings (i.e., the Investigational New Drug Application (IND) in the US and the Investigational Medicinal Product Dossier (IMPD) in the EU) prior to initiation of the First in Human (FIH) studies and are subject to rigorous and comprehensive review prior to clearance to proceed with the FIH trials.
Pharmaceutical companies attempt to delay as many expenditures as possible until safety and efficacy can be determined; however, there are some expenses which cannot be delayed—these include chemistry, manufacturing, and controls (CMC) and nonclinical studies. In this final part of this three-part series, these costs are considered.
Non-Clinical Development
Excellent documents are available on the scope of nonclinical studies [1, 2, 3, 4], as well as Guidance to Industry. Attached, you will find a summary table of nonclinical study activities.
What is the expected cost of these studies? A 2013 study of pharmaceutical companies provides some average number [5]. The study was conducted in the form of interviews of nine biopharmaceutical companies in late 2012 and early 2013. Seven of nine were top 20 biopharma companies, and eight of nine companies focused on both small and large molecules across multiple therapeutic areas. The results of the survey in tabular form were:
| Average | Min | Max | |
| CMC | $3,100,000 | $400,000 | $8,900,000 |
| Pharmacology | $600,000 | $100,000 | $2,000,000 |
| Metabolism | $500,000 | $10,000 | $1,200,000 |
| Pharmacokinetics | $300,000 | $40,000 | $1,000,000 |
| Toxicology | $1,500,000 | $50,000 | $250,000 |
| Total (w/o CMC) | $2,900,000 | $200,000 | $4,450,000 |
Let’s ignore CMC until the discussion below. The average total for nonclinical ($2.9M) seems a little high. Based on the author’s experience, for a biologic, with pharmacology, assay development, exploratory toxicity and PK, repeated dose GLP toxicity, and safety pharmacology, the overall payment to contract research organizations (CROs) should be in the range of $750k to $1M. There are additional studies required for Phase 3 [3], but this is a good estimate to take a startup pharmaceutical company through IND filing.
Chemistry, Manufacturing, and Controls (CMC)
CMC is traditionally thought of as the most expensive item in an IND. It encompasses many interdependent activities that take place across time and across geography. Attached, you will find a summary table of CMC activities.
What is the expected cost of these studies? Stergiopoulos’s 2013 survey had an even wider range for CMC activities than for nonclinical activities [5]. The low value was $400,000, and the high value was $8.9M. This wide range makes a good deal of sense because it is attempting to express the entire range of expense from small molecules to proteins and from relatively well-known technologies (e.g., antibodies) to entirely novel molecules and methods of delivery.
Consider the relatively common case of an antibody:
- CHO Cell line development: it’s critical to have a high producing stable cell line; cell line development, manufacturing of Master Cell Bank (MCB), and MCB characterization will be about $1.1M. CMOs often charge less, but that is in exchange for an agreement that may restrict movement of the project to another CMO or requires purchase of cell culture media from the CMO.
- Upstream and downstream process development: $2.3M, including small scale, 10L, and 200L runs, materials, viral clearance study, laying down reference standard
- Analytical development: $1.0M
- Manufacturing: $2.5M for a single 2000 L cell culture batch, including materials and release testing; $570k for ICH stability; $500k for filling
- Regulatory: $250k
A total CMC expense of $7.2M, excluding the cost of distribution which typically falls on the Clinical department. A possible reason that the average CMC cost number reported in Stergiopoulos’s 2013 survey was lower ($3.1M) is that at larger pharmaceutical companies establishing true costs can be difficult because some costs (e.g., maintenance of manufacturing and analytical groups and facilities) may appear as overhead, rather than as itemized costs. So, the cost of CMC can appear falsely low.
Caveats
It is important to recall that there are other startup costs which have not been itemized in this three-part series. Costs like 1) office space and staffing and 2) fund raising and investor relations need to be considered. Additionally, management of functions such as technical operations, pre-clinical, clinical affairs, quality, and distribution have significant internal costs above and beyond the proposals from CMOs and CROs.
Another way to represent this idea is that overall budgetary costs to file an IND are significantly higher than the line items addressed in this series. The best way to address this disparity is to assemble two budgets: 1) a bottom-up budget based on proposals from CROs and CMOs and 2) a top-down budget based on the development team’s experience. Over time those two budgets can be driven together to understand the finances of the project.
Note: a comparison of the CMC costs for small molecule product, versus fermented/peptide product, versus cell culture product may be subject of a future post.
[1] Shen, J., et al. “Design and Conduct Considerations for First-in-Human Trials,” Clin Transl Sci (2019) 12, 6–19; doi:10.1111/cts.12582
[2] Andrade, E.L., et al. “Non-clinical studies in the process of new drug development – Part II: Good laboratory practice, metabolism, pharmacokinetics, safety and dose translation to clinical studies,” Brazilian Journal of Medical and Biological Research (2016) 49(12): e5646, http://dx.doi.org/10.1590/1414-431X20165646
[3] Hawes, J. “Nonclinical Studies to Support Clinical Trials,” pharmtox.uams.edu/wp-content/uploads/sites/75/2020/02/Nonclinical-Studies-to-Support-Clinical-Trials_Hawes_UAMS_2020.pdf
[4] Muller, P.Y., et al. “The minimum anticipated biological effect level (MABEL) for selection of first human dose in clinical trials with monoclonal antibodies,” Curr Opin Biotechnol. 2009 Dec;20(6):722-9. doi: 10.1016/j.copbio.2009.10.013. Epub 2009 Nov 5.
[5] Stergiopoulos, S.,et al. “Characterizing the Cost of Non-Clinical Development Activity,” www.contractpharma.com/issues/2013-06/view_features/characterizing-the-cost-of-non-clinical-development-activity/
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