Societal CDMO Unveils “20/80 Second Source Technical Transfer” Service Model, Offering Cost and Time Savings for Pharmaceutical Manufacturing

Rhea-AI Summary

Societal CDMO has introduced a new service model, the 20/80 Second Source Technical Transfer, aimed at enhancing supply chain preparedness for pharmaceutical companies. Launched on May 17, 2022, during the CPhI North America meeting, this model allows companies to execute planning and sourcing activities ahead of time, potentially reducing supply disruption response time by a year while only committing 20% of total technical transfer costs initially. This proactive approach addresses critical supply chain vulnerabilities heightened by global disruptions, offering cost and time savings, and aligns with the need for trusted second suppliers.

Positive

• The new service model could reduce the supply disruption response time by a year.
• Initial investment needed is only 20% of total technical transfer costs.
• Addresses critical supply chain vulnerabilities in the pharmaceutical industry.

Negative

• None.

Preparedness Strategy Provides BioPharmas an Opportunity to Mitigate Supply Chain Risks and Vulnerabilities While Initially Committing a Fraction of the Total Tech Transfer Investment

Proactive Initiation of Second Source Technical Transfer Activities Today Can Position Company as “Supply Ready” up to One Year Earlier than Waiting for a Supply Disruption

SAN DIEGO and GAINESVILLE, Ga., May 17, 2022 (GLOBE NEWSWIRE) -- Societal CDMO, Inc. (“Societal CDMO” or "Societal"; NASD: SCTL), a contract development and manufacturing organization (CDMO) dedicated to solving complex formulation and manufacturing challenges primarily in small molecule therapeutic development, today unveiled the company’s new “20/80 Second Source Technical Transfer” service model. This new CDMO offering is designed to provide pharmaceutical companies with a time- and cost-efficient preparedness strategy for mitigating supply chain risks and vulnerabilities. Societal introduced the “20/80 Second Source Technical Transfer” model in conjunction with the CPhI North America 2022 Meeting, held May 17-19, 2022, in Philadelphia, PA.

Societal created this new service model in response to the growing risks and vulnerabilities associated with the global supply chain that have significantly elevated the importance of second source suppliers within the pharmaceutical industry. Over the past decade, supply chains in the global life sciences industry have been increasingly interrupted and/or impacted by a broad range of natural disasters, geopolitical threats, and regulatory/compliance failures, as well as the global COVID-19 pandemic. This volatility has created an environment in which risk mitigation, reshoring of manufacturing to the United States, and supply chain continuity have become much more critical considerations for supply chain management within the pharmaceutical sector.

Under the framework of Societal’s “20/80 Second Source Technical Transfer” model, pharmaceutical companies are able to collaborate with Societal to execute all sourcing and planning phase activities of a standard technical transfer process prior to the time that product supply is needed. By undertaking these activities in advance, Societal customers can complete approximately half of the technical transfer process and position themselves to initiate the transfer of material and commence the batch manufacturing (execution phase) whenever new and/or additional finished drug product supply is required. By executing the materials sourcing, planning and other production preparation phases of the technical transfer, a Societal customer can be “supply ready” approximately a full year sooner than if it commenced these activities at the onset of a supply disruption. Importantly, investing in the initial sourcing and planning phase activities accounts for 20 percent, on average, of the total technical transfer costs for a commercial product, whereas the execution/manufacturing phase makes up the remaining 80 percent of costs.

“We believe that this new service offering addresses a critical and growing need in the pharmaceutical manufacturing space, allowing Societal customers to achieve cost and time savings while establishing a back-up plan that we view as akin to insurance for safeguarding the continuity of their supply of important drugs to the patients we all ultimately serve. Essentially, customers will be able to complete approximately 50 percent of a tech transfer project timeline while committing roughly 20 percent of the total costs upfront, offering the peace of mind that comes with being prepared to quickly respond to any issues that arise within their supply chain,” said David Enloe, chief executive officer of Societal CDMO. “In addition to the valuable cost and timing savings provided by this program, it also helps our U.S. customers address several additional industry hot-button issues, such as the need for trusted second sources and reshoring of manufacturing activities. We are eager to deliver this unique service offering to our current and future customers.”

About Societal CDMO
Societal CDMO (NASDAQ: SCTL) is a bi-coastal contract development and manufacturing organization (CDMO) with capabilities spanning pre-Investigational New Drug (IND) development to commercial manufacturing and packaging for a wide range of therapeutic dosage forms with a primary focus in the area of small molecules. With an expertise in solving complex manufacturing problems, Societal CDMO is a leading CDMO providing therapeutic development, end-to-end regulatory support, clinical and commercial manufacturing, aseptic fill/finish, lyophilization, packaging and logistics services to the global pharmaceutical market.

In addition to our experience in handling DEA controlled substances and developing and manufacturing modified-release dosage forms, Societal CDMO has the expertise to deliver on our clients’ pharmaceutical development and manufacturing projects, regardless of complexity level. We do all of this in our best-in-class facilities, which total 145,000 square feet, in Gainesville, Georgia and San Diego, California.

Societal CDMO: Bringing Science to Society. For more information about Societal CDMO’s customer solutions, visit societalcdmo.com.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “anticipate”, “believe”, “could”, “estimate”, “upcoming”, “expect,”, “intend”, “may”, “plan”, “predict”, “project”, “will” and similar terms and phrases may be used to identify forward-looking statements in this press release. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Factors that could cause the company’s actual outcomes to differ materially from those expressed in or underlying these forward-looking statements include risks and uncertainties associated with the ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the customer ordering patterns or inventory rebalancing or disruption in raw materials or supply chain; demand for the company’s services, which depends in part on customers’ research and development and the clinical plans and market success of their products; customers’ changing inventory requirements and manufacturing plans; customers and prospective customers decisions to move forward with the company’s manufacturing services; the average profitability, or mix, of the products the company manufactures; the company’s ability to enhance existing or introduce new services in a timely manner; fluctuations in the costs, availability, and suitability of the components of the products the company manufactures, including active pharmaceutical ingredients, excipients, purchased components and raw materials, or the company’s customers facing increasing or new competition. These forward-looking statements should be considered together with the risks and uncertainties that may affect our business and future results presented herein along with those risks and uncertainties discussed in our filings with the Securities and Exchange Commission at www.sec.gov. These forward-looking statements are based on information currently available to us, and we assume no obligation to update any forward-looking statements except as required by applicable law.

FAQ

What is the '20/80 Second Source Technical Transfer' model by SCTL?

It is a new service model introduced by Societal CDMO designed to enhance supply chain preparedness for pharmaceutical companies by allowing them to execute sourcing and planning activities in advance.

When was the '20/80 Second Source Technical Transfer' model launched?

The model was launched on May 17, 2022, during the CPhI North America meeting.

How does the new service model benefit pharmaceutical companies?

It allows companies to complete planning and sourcing phases earlier, reducing supply disruption response time and minimizing upfront investment.

What percentage of costs does the initial investment cover in the '20/80 Second Source Technical Transfer' model?

The initial investment covers approximately 20% of the total technical transfer costs.

Why is the new service model important for SCTL's clients?

It helps clients mitigate supply chain risks and address challenges like the need for trusted second sources and reshoring of manufacturing.