It is obvious from talking to Datuk Dr Mohd Nazlee Kamal that he has changed from being mainly a scientist to more of a businessman. The 90-minute interview with him was peppered with frequent references to the terms “business model” and “revenue generation”. In fact, “from day one itself, there was a business model focus”, he says.

This explains why Inno Biologics Sdn Bhd (InnoBio), of which Nazlee is CEO, got into the less glamorous contract manufacturing side of the drugs business instead of the sexier but also costlier, more time-consuming and harder-to-score drug discovery side.
It is also clear that Nazlee is very lucky to be living his dream. The bio-manufacturing facility he runs, which cost RM80 million, is actually a realisation of his PhD thesis on profusion technology.

InnoBio focuses on manufacturing small quantities of cell cultures for companies to conduct drug testing in the early stages before the drug goes into full commercial production. (Cell culture is the process by which prokaryotic or eukaryotic cells are grown under controlled conditions. According to Wikipedia, in practice, the term “cell culture” has come to refer to the culturing of cells derived from multi-cellular eukaryotes, especially animal cells.)

In the pharmaceuticals industry, the early testing of a particular drug is called pre-clinical trials followed by clinical trials Phase 1, Phase 2 and Phase 3. Wikipedia describes pre-clinical development as a stage of research that begins before clinical trials (testing on humans) can begin and during which important feasibility, iterative testing and safety (also known as Good Laboratory Practice or GLP) data is collected. The main goals of pre-clinical studies (also called pre-clinical studies and non-clinical studies) are to determine a product’s ultimate safety profile.

If a drug passes the pre-clinical phase, it moves on to the lengthy and costly clinical trials phase. This takes anywhere from 5 to 10 years and involves testing on humans. It is also very costly. Phase 1 trials ensure the safe and effective use of the therapy. Generally using a small number of participants, Phase 1 trials for medications test a range of dosages. Phase 2 trials test whether the medication is helpful in treating the target illness. These trials may also help determine other factors such as what types of patients may find the drug more effective than others. Phase 3 trials are the largest and may take months or years to complete. The new medication is tested against existing drugs and placebos. A Phase 3 trial must show a drug’s effectiveness and possible negative reactions. All three phases of drug trials must be completed before a manufacturer may apply for US Food and Drug Administration approval of a new medication.

The background explanation is necessary to set the context for InnoBio’s decision to focus on the manufacturing part of the drug business and specifically the pre-commercial phase, where the quantity of drugs needed is very small and does not require one to build a facility worth hundreds of millions of ringgit.

Besides its focus on the pre-commercial phase, a strategic decision was made early on to focus on mammalian cell cultures and not bacteria cultures. The reason for this was simple. “The market for bio-pharmaceuticals is growing fast, especially in the area of cancer drugs where more drugs are being developed in mammalian than bacteria cell cultures,” says Nazlee. As a result, InnoBio also focuses on the area of manufacturing for cancer drugs.

But while this strategy seems sound, which company will trust a yet unproven entity from a country more known for its commodities and electrical and electronics sector with its precious cell lines to manufacture on its behalf? Nazlee acknowledges the fact that companies are not comfortable with being the first customer of a new facility. This is where smart partnerships come in and where InnoBio has scored a major success, having been picked by the largest drugs contract manufacturer in the world, the Boehringer Ingelheim group, to be its partner in Asia.

Nazlee is very proud of this, especially since InnoBio beat Singapore competition in the process. It was an extensive process through which the company was evaluated and tested to ensure its plant design and people capability were up to the expectations of Boehringer. The CEO of Boehringer himself came down for the actual signing of the deal, says Nazlee.

Boehringer’s interest in partnering a specialised contract manufacturer like InnoBio is easy to understand. It wants to stay focused on the business of making drugs in the large quantities demanded in commercial production. For InnoBio, the deal removes the biggest hurdle any startup will face — a track record. With Boehringer passing on its cell cultures to InnoBio to manufacture, the issue of being the first customer does not arise anymore. Through this partnership, InnoBio will develop a dossier for customers that want to assess how good the company is in terms of manufacturing cell cultures.

But InnoBio will not just be relying on Boehringer for business. It is already working with an Australian and an Indian customer to start manufacturing their respective cell cultures. Just to show how long and complex building such relationships are, it has been 18 months since InnoBio and the Australian company sat down to discuss their potential working relationship. Since the end product is going to be consumed by human beings, the entire process is thorough, to say the least. Again, this is where InnoBio’s relationship with Boehringer comes in handy as it could face the problem of who will handle the commercial production should the drug get to that stage.

As Nazlee explains, this does not simply involve passing over the “recipe” of the drug and letting a commercial contract manufacturer reproduce the drug in the quantity needed. Very close scientific cooperation is needed between the pre-commercial manufacturer and commercial manufacturer to ensure the drug is reproduced exactly.

But for Nazlee, the day of commercial production is near and it would have been a long journey from when the idea was first discussed back in 2001. He was at the end of his contract as a lecturer at Universiti Teknologi Malaysia and had a discussion with the then vice-chancellor Tan Sri Ahmad Zaharuddin Idrus. The conversation, recalls Nazlee, focused on what Malaysia could do to move its fledgling biotechnology industry forward. They watched with interest as Singapore pumped in billions of dollars to jumpstart its biotech agenda. They early on decided that the plan should be to earn revenue as quickly as possible. They read something in a medical journal about a small country in Eastern Europe going into contract manufacturing. After some research into this and mapping it to what Malaysia could possibly offer, it was decided that this was the path forward.
Thus began Nazlee’s eight-year journey. It has not been without criticisms and jealousy from his peers.

Comments: [email protected]

This article appeared in Netvalue2.0, the technology section of The Edge Malaysia, Issue 747, March 23-29, 2009.