Transcript CAPEX and OPEX

Building a business case for a fully
continuous biomanufacturing platform
Integrated Continuous Biomanufacturing
Jason Walther
23 October 2013
Sol Pompe disease Argentina
www.genzyme.com
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Fully continuous biomanufacturing platform
• Genzyme developing a continuous integrated platform
− Technical results are promising
− But can we justify the platform from a business perspective?
− And can we use economic modeling to guide development?
2
Economic drivers for the continuous platform
CAPEX
Universal platform
OPEX
Risk
Omni-product facilities Common work force Flexible infrastructure
Step reduction
Smaller facilities
Simpler process
Volume reduction
Smaller facilities
No scale-up
Single-use tech
More automation
Faster build times
Reduced turnaround
Increased complexity
Less labor
Steady state
High-productivity
Consistent operation
Smaller facilities
Closed process
Steady quality
Media requirements
• Can we quantify these advantages and disadvantages?
3
Financial valuation methodology
•
•
•
•
Estimate CAPEX/OPEX using BioSolve software
Estimate platform dev costs and lay out a future product timeline
Predict discounted cash flows for legacy & continuous platforms
Calculate financial indicators (e.g., NPV) and make assessment
Facility
Estimates
Cash Flow
Projections
Financial
Indicators
CAPEX/OPEX savings
using the new platform
Discount future costs
CVI, NPV, IRR, etc.
Development Costs
Launch
Scenarios
Inputs
Assessment
Outputs
Facility estimates: CAPEX and OPEX
• Use BioSolve software package
− Define process (unit ops, scaling rules, assumptions)
− Calibrate cost data (equipment, materials, labor, etc.)
− Benchmark against previous internal and external projects
Facility A
Facility B
Facility C
Facility D
Facility E
Facility Scale
(Reactor # and Size)
Facility CAPEX
(Actual:Estimated)
4X20,000L
12X12,000L
6X15,000L
3X10,000L
3X4,000L
104%
101%
101%
102%
120%
− Biosolve capital estimates are acceptably accurate
5
Facility estimates: Platform assumptions
Legacy Platform
mAb
500 kg/y
Enzyme
20 kg/y
6
US
DS
Time
IVCD
Titer
US
Fed-batch
1X10,000L SS
Batch
12 days
3000 Mcell·h/mL
3.5 g/L
Microcarrier perfusion
2X2,000L SS
DS
Batch
Time
60 days
VCD
5 Mcell/mL
Titer
0.05 g/L
Continuous Platform
US
Suspension perfusion
2X500L SU
DS
Continuous
Time
60 days
VCD
100 Mcell/mL
Titer
1.4 g/L
US
Suspension perfusion
1X500L SU
DS
Continuous
Time
60 days
VCD
100 Mcell/mL
Titer
0.5 g/L
Facility estimates: Platform assumptions
CAPEX ($M)
mAb
OPEX ($/g)
Legacy
500 kg/y
2X
1.2X
1X
1X
Continuous
Enzyme
20 kg/y
1X
7
50X
3X
8X
Cost impacts of the fully continuous platform
mAb OPEX
Overall: –54%
Overall: –20%
% overall cost
mAb CAPEX
8
Cell-Specific Perfusion Rate
CAPEX/OPEX sensitivity analyses
Red = More Savings
CAPEX Savings
OPEX Savings
(Fed-Batch mAb – Continuous mAb)
(Fed-Batch mAb – Continuous mAb)
Viable cell density
• Financial estimates can guide process development
− (For example, CSPR and VCD targets)
9
CAPEX/OPEX sensitivity analyses
Red = More Savings
Cell-Specific Perfusion Rate
ΔNPV for a single facility
(Fed-Batch mAb – Continuous mAb)
Viable cell density
• Financial estimates can guide process development
− (For example, CSPR and VCD targets)
10
Financial valuation methodology
Facility
Estimates
Cash Flow
Projections
Financial
Indicators
CAPEX/OPEX savings
using the new platform
Discount future costs
CVI, NPV, IRR, etc.
Development Costs
Launch
Scenarios
Inputs
Assessment
Outputs
Product launch scenario
2025
2026
2027
2028
2029
2030
2031
2032
• Create a hypothetical product timeline with various mAb
and enzyme product launches
• Calculate NPV for two scenarios
− Legacy platforms (fed-batch and microcarrier perfusion)
− Universal continuous platform
• Compare NPVs to estimate value of new platform
12
Advanced Modeling – An Integrated Approach
Sales
Profiles
Product
Definition
Dashboard
Development
Profiles
Stocking
Strategy
In partnership with
Biopharm Services Ltd.
13
Product NPV
Portfolio NPV
Manufacturing
Network
Relative cash flow projections
ΔNPV for product portfolio
mAb OPEX
Enzyme OPEX
mAB CAPEX
Enzyme CAPEX
Development Cost
discount rate = 7%
• Clear benefits to new platform (given the assumptions)
• Hundreds of millions of dollars in potential savings
14
Relative cash flow projections
ΔNPV for product portfolio
High demand
Medium demand
Low demand
• Different product launch scenarios can be investigated
• Continuous platform competes in a variety of scenarios
15
Conclusions
• Infrastructure in place for economic modeling of future
platforms
• Preliminary analysis shows strong, quantifiable business
drivers for continuous platform
− We will continue to revisit and improve assumptions
− Additional sensitivity analyses
− Expand comparisons to other platforms (e.g., disposable FB)
• Process development guidance
− Cell density and CSPR are influential upstream parameters
− Similar parameters will be found for downstream process
16
Acknowledgments
• Genzyme Late Stage Process Development
• Genzyme Capital Finance
• Genzyme Industrial Affairs
• Sanofi Biologics Research & Development
• Biopharm Services
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