Selecting a CDMO Part THREE: CDMO EVALUATION AND SELECTION

We are now entering the final phase of the process. I am hesitant to say it’s the most important, as I feel the preparation steps taken prior to this point are equally important in the overall process. Nevertheless, people naturally look forward to this phase, as it entails significant interactions with potential partners, which can be both a challenge and a great deal of fun!

The need to develop quantitative criteria for evaluating proposals is paramount. If crafted carefully, the RFP itself can form the basis for a great scorecard upon which to evaluate proposals. I generally suggest sponsors create a scorecard in Excel or Smart Sheets, as the columnar formats lend themselves to easy and insightful comparisons of options.

The criteria should be clearly listed, based on the criteria outlined in the SCOPE section of the RFP. Weighting can be applied to the criteria to reflect sponsor priorities and constraints. Examples of criteria could include:

• Development capabilities (both process and analytical; including evaluation of the proposed development pathway)

• GMP facility fit (laboratory and production)

• Qualifications of key personnel

• Timeline (as proposed by candidate relative to the needs of the sponsor)

• Project management approach (including structure, documentation management)

• Regulatory history (may be obtained from publicly available information or elsewhere)

• Quality systems approach (ideally based on firsthand interactions with the Quality unit, but could be addressed later after face-to-face meetings)

• Adherence to required deliverables (based on the RFP requirements, i.e. will they provide required analytical data?)

• Quality of proposed stability plan

• Overall cost

• Terms and conditions

Numerical values should be assigned to each criterion, based on a consistent scale. It will be difficult to make apples to apples comparisons, as the format and level of detail will vary in each proposal. Nevertheless, enough information should be available to allow a first cut to reduce the number of candidates to a manageable level (ideally 3-4).

Input should be sought with all stakeholders and preferably in a round table format. This will allow for in-depth commentary that will add necessary color to the conversation. Depending on the number of proposals, this part of the process could take some time. In addition to scoring the proposals, the team should compile a list of open issues or questions specific to each proposal.

The target of this phase is to identify a small number of candidates for further review. This typically involves either a F-2-F meeting on the site of the candidate or a video conference (or both). The sponsor should focus the meetings on clarification of any ambiguities in the proposal. Any questions should be relayed to the candidate prior to the meeting, with the expectation they will be prepared to address these in detail.

After a round or two of interactions, the scorecard should be updated with new information. The top two to three contenders should be visited, if this hasn’t already been done. The focus of the visit is to confirm the adequacy of the facilities and staff and to begin the process of qualifying the vendor by the Quality unit. Although a formal quality audit may not be possible until after a contract is in place, there is no reason that a reasonably detailed Quality assessment cannot be performed during an on-site visit.

The outcomes of the site visits should provide the final data needed to finalize the scorecard. Ideally, one or two candidates should have risen to the top by now and can be moved to the final phase of the process, negotiating the final contract.

Negotiations need not be a source of conflict. Rather, I tend to view them as the beginnings of building a strong professional relationship. Although the two parties will disagree, sometimes significantly, this is no different than any relationship between close friends. And like those relationships, the keys lie in the ability of both parties to understand their core values, priorities and constraints. The sponsor must understand where flexibility is possible and where it is not. Although overall costs are often the main source of contention, other factors can also be prime topics for negotiation. These include:

• Inclusion of data and reports

• Timing for delivery of key milestones

• Payment terms, including bonuses and penalties

It sometimes happens that the sponsor and top candidate cannot come to mutually acceptable terms. This is why it is important to have a backup. Sponsors sometimes get enamored of their top choice and are reticent to consider other options, even to the point of making concessions they shouldn’t make. The point of the prior rigorous evaluation process was to allow for this possibility. Don’t let perfection become the enemy of the good, especially if the ‘good’ second place candidate is more accommodating and likely, a better, more flexible business partner in the long run.

Small and midsize companies depend almost exclusively on the support from 3rd party service providers. Having a sound business process to evaluate and select from the many available options is essential for any successful company. I hope this review helps set you on that path.