In the bio/pharmaceutical industry the loss of a desired CMO or CRO can be difficult to recover from. It can result in a negative impact on timelines, which in turn can lead to loss of investor confidence, disgruntled customers as well as incredible stress for employees trying to sort another contractor at short notice. This is where having a back up contractor can make a huge difference.
As part of the process used to select your preferred CMO or CRO, there will have been other companies that could also have done the job very well, but might not have impressed quite as much as your chosen partner .
After you have communicated to them you have chosen another contractor, do keep dialogue up with these other contractors. Most business development managers will be very happy to do this. Be honest and explain that your business would like a contingency option for this kind of work and that their company would be a good fit for this. Also ask if it would be possible to see their standard terms and conditions or contract (whichever is appropriate), to check if there aren’t any showstopper clauses. This will help your business switch to them at short notice if required.
I would advise you do this with at least those outsourced projects that would critically affect the business in terms of timelines or cost, if there were any delays, e.g. manufacturing of drug substance, final product manufacture, pre-clinical testing. However it is always worth while having other contractors on hand in other areas, you never know what can happen.
I have seen this contingency option work very well in the past:
When working as a outsourcing expert at a previous employer, I recommended the selection of a large CMO to manufacture our drug substance. We had delays to our manufacturing start date, due to requirements from our board to see more technical data, before they committed to such a significant spend. By the time we were ready to proceed, the CMO was frustrated with these delays and as our quote had technically expired, decided to double the price of the project at very short notice. The revised price was far too high for us, and could have put us in a very difficult situation as to start afresh with another contractor would have taken several months. But as I had arranged a contingency option with an equally good company, we were able to switch manufacturing to them instead. We were able to do this very quickly as every was in place and the project ran very smoothly, with the backup company doing an excellent job. This was all because I had stayed in constant communication with this back up option and so timelines were hardly effected. If we hadn’t done this we would have lost at least 6 months on our overall drug development programme, failing our business goals significantly.