In an industry where the wrong manufacturing partnership can derail a drug program, and the right one can accelerate it, biotech leaders face mounting pressure to make smarter, faster decisions about their CDMOs. But are they asking the right questions? And are they truly listening to the answers?
Kenneth Drew, Vice President at Flamma USA, a specialty CDMO with operations spanning multiple continents, has spent more than two decades in contract development and manufacturing. In this article, he explains how too many biotechs are making avoidable mistakes, often because they hear what they want to hear rather than what they need to hear.
Don’t Overreact to Geopolitical Noise
With the ongoing push-and-pull between reshoring and global diversification, many biotech leadership teams are responding to regulatory and political pressure by adopting blanket “No China” sourcing policies. Kenneth urges caution.
“Don’t overreact and become a lemming falling victim to the ‘No China’ policy being adopted by many biotech leadership teams who fail to understand the industry and its dynamics,” he says.
His recommended approach is strategic rather than reactive. “CDMOs with global footprints bring significant value to having a secure supply chain,” Kenneth notes. “Take advantage of your current Plan A, but always have a Plan B ready to go.”
Resilience is not the same as restriction. Diversification, done thoughtfully, beats blanket exclusions.
Size Isn’t Everything
A persistent assumption among emerging biotechs is that aligning with a large, well-known CDMO signals credibility to investors. Kenneth pushes back on this logic.
“Not everyone wants to shop at Walmart,” he says. “Bigger is not necessarily better. Just because you think investors like to see that you are working with a large, well-known CDMO, you might be doing yourself a disservice.”
Kenneth warns that larger CDMOs may obscure slow timelines in their proposals, telling clients what they want to hear to win the contract — only to begin expanding scope months later when switching becomes impractical.
“The tactic of ‘bait and switch’ is very much alive in the industry and many biotechs are falling victim to this,” he says. “A good partner CDMO will tell you what you need to hear, being realistic yet optimistic about the project.”
His advice to emerging biotech leadership: trust your CMC teams, and resist signing one-sided supply agreements early under pressure because of purported or perceived capacity constraints. “A CDMO that is looking to be a long-term partner will never do this.”
Red Flags in CDMO Relationships: Watch for Pressure Tactics
“A solid partnership avoids pressure,” he says. “I have seen countless biotechs succumb to imaginary pressures. ‘We require a non-refundable reservation fee to hold your production slot’ or ‘We cannot guarantee that we will have capacity to make your molecule without a supply agreement.'”
These tactics, he argues, are manufactured urgency designed to push biotechs into commitments before they’ve had time to properly evaluate the relationship. A genuinely partner-oriented CDMO takes a different approach.
“Transparency goes a long way to build that relationship,” Kenneth says. “As a CDMO, it is OK to decline a project. Biotechs should remember the CDMO that tells you what you need to hear, not what you want to hear. These are the companies you want to establish a rapport with.”
Evaluating Specialized Capabilities: The HPAPI Lesson
As demand grows for CDMOs with expertise in complex molecules such as GLP-1s, highly potent APIs (HPAPIs), and other specialized chemistries, Kenneth draws on a cautionary historical parallel.
“Raise your hand if you remember the beginning of HPAPIs?” he says. “At that time, there were few CDMOs that specialized in the field. Then suddenly, everybody claimed to be an expert just because they purchased an isolator. The problem was simple — they were not experts.”
The same dynamic, he implies, is playing out now in emerging therapeutic categories. A website claim is not a capability validation. Kenneth recommends a more rigorous vetting process: leverage industry contacts, visit facilities in person, and take advantage of conferences to assess CDMOs directly.
“Checking with industry contacts as well as visiting a CDMO onsite is extremely valuable,” he says. “It will be cost-effective and very informative when you select your next CDMO.”
Budgeting for Reality: The Conversation to Have Before the SOW
“The single most important conversation should NOT be with the CDMO you are considering but it is with your own finance team,” Keneth argues.
“Rarely do you find a first-time project that stays under budget,” he says flatly.
His practical framework for avoiding financial shock:
- Be wary of the lowest quote. Low-ball bids are increasingly used to win projects, with scope changes deployed later to recover margin once switching is no longer viable.
- Expect cost overruns. Detailed proposals signal a CDMO that has genuinely engaged with the project’s complexity, and these partners tend to deliver better outcomes.
- Budget at least 20% above the projected cost. “It is always better to come in under budget than to ask your finance team for more funding due to scope changes,” Kenneth advises.
