Ahead of BIO San Diego next month, Shilpa Biologicals has called on emerging biotech companies to rethink how they approach CDMO Selection as investment conditions begin to improve across the biopharma sector. Madhav Bhutada, Director of Shilpa Biologicals, said many innovators developing increasingly sophisticated therapies, including bispecific and trispecific antibodies, continue to depend on a limited group of large contract development and manufacturing organisations (CDMOs), potentially exposing programmes to avoidable risks.
According to Bhutada, biotech firms often fail to fully account for the operational realities associated with major CDMOs, particularly when it comes to manufacturing capacity and handling work that falls outside the originally agreed project scope. Although developers generally understand that manufacturing slots can be difficult to secure and that additional expenses may arise, many still gravitate toward the largest providers. As projects evolve, unexpected changes can trigger substantial extra costs, while difficulties in obtaining alternative manufacturing capacity may prolong development schedules. Shilpa Biologicals estimates that such overruns can increase programme budgets by 20–40% and significantly postpone entry into clinical trials.
The challenge is especially common among teams that originate from large pharmaceutical companies. Bhutada noted that expectations shaped by big pharma environments do not always align with the realities of operating as a start-up biotech within the customer base of a major CDMO. “Too often, a biotech operating on a tight budget assumes a perfect manufacturing scenario with no challenges,” Bhutada said. “This is where problems begin.”
He added that greater attention to planning, scope management and contingency arrangements is becoming increasingly important because unexpected project changes remain a frequent cause of both financial pressure and delays in biologics programmes. In many cases, smaller CDMOs can offer a faster route from discovery to the clinic. While large providers may theoretically complete projects within around six months, real-world timelines often extend to 12 months when complications occur. Smaller organisations, meanwhile, can often complete similar work in six to nine months while offering dedicated scientific teams focused on rapid problem-solving.
Bhutada also highlighted a broader industry shift toward diversified CDMO Selection strategies. He said consultants involved in chemistry, manufacturing and controls (CMC), along with investors, are placing increasing importance on CDMO choice and network design during due diligence. “I cannot stress this enough – particularly when getting into the clinic and ultimately phase ii, which is where companies are made or broken,” he said. “It is not only cost, but time lost, that is critical to long-term commercial viability. So I predict you will see both VCs and consultants at BIO now factoring this into their decision-making triage on biotech investments.”
