Two Steps to Improve Chances of FDA Approval and Maximize Exit Valuations
Very few promising life science discoveries actually result in an approved FDA product. But once your portfolio company clears significant discovery, safety and clinical milestones, there are a few straightforward steps they can take to improve the chances of regulatory approval and maximize their exit valuation down the line. These initiatives relate to data management and manufacturing.
Data in the Crosshairs
Over half of the FDA’s warning letters in the last five years have been related to data integrity. With the extensive reliance on 1) CMOs (contract manufacturing organizations) for product development, supply of clinical material and commercial manufacturing and 2) reliance on paper records and spreadsheets for managing process and product data, the FDA has increased pressure on life science companies to adopt better data practices as a means of improving drug product quality and safety.
The FDA has issued extensive guidelines Process Validation: General Principles and Practices on the need for drug sponsors to better manage CMOs and demonstrate control over manufacturing processes – despite the typical scope of extended manufacturing networks.
M&A Deals Impacted by Data and the Reliance on CMOs
The termination of Fresenius’ acquisition of Akorn Pharmaceuticals demonstrated that regulatory approvals – and commercial successes – are no longer sufficient to guarantee liquidity events. Acquirers and their advisors are scrutinizing the data sets of their targets to ensure that each revenue stream (drug product) has an inscrutable, high integrity, historical data set upon which to rely. Best practices dictate that companies address digital data gaps as early as possible in their product and process development operations.
Two Simple Steps
There are a few steps that investors and boards should direct management to take to ensure best practices are implemented for data management and manufacturing.
- Implement a digital data platform early in the product life cycle. A platform that serves as a single source of data truth that provides ready access to development, batch, specifications and limits data and enables rapid analytics will deliver tangible benefits to the business while minimizing enterprise risks.
- Secure full data transparency in supply and quality agreements with contract manufacturers. While attorneys are adept at crafting language to address issues like indemnity and choice of law, it is essential they also negotiate these agreements carefully as they govern issues that affect intellectual property, drug product quality, data integrity and FDA compliance.
As a former biotech executive and general counsel, I look forward to discussing with you ways to mitigate risks in your portfolio. Part of the solution is the Skyland PIMS® process and product data management platform, an FDAcompliant solution designed for collaboration between drug sponsors and CMOs and the management and analysis of data throughout the drug product life cycle.
Robert Di Scipio | Skyland Analytics CEO
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