Leadership Perspective: Q: What Are Some Key Mistakes Clients Make When Engaging a CMO? And How to Avoid Them
With Keith Kentala, Vice President, Commercial Operations
I can think of four considerations a sponsor will face when selecting a CMO that could lead to trouble – price, technical expertise, manufacturing assets, and culture. Paying too much attention to one, or not enough to another, can cause avoidable challenges that can add costs, delays, or even derail the project. They key is, these are avoidable.
Customers often rank price fairly low on CMO surveys, but my experience is that it actually gets brought up very quickly in discussions. Of course, the outsourced project needs a budget and the sponsor is right to articulate that, but price should never be the primary driver. If you’re choosing someone on price alone, you’re probably making the wrong choice.
How to Avoid It?
Keep an eye on the big picture. A higher-cost CMO may have the equipment and expertise that’s needed to bring your product all the way to commercial manufacture, whereas going with a lower-cost CMO may then require switching and the expense and time for a technology transfer.
It’s very important to select a CMO with the requisite technical expertise for the job at hand. Many times, however, the sponsor doesn’t know or isn’t certain of the exact expertise needed. They need more information to make an informed choice, and some CMOs could take advantage of that lack of knowledge and oversell their capabilities.
How to Avoid It?
Ask the CMO to demonstrate how they have worked on similar projects. In our industry, projects can be confidential, but it is still within a client’s rights to push CMOs for evidence of their body of work, or for permission to speak with a satisfied client with a similar project. Word-of-mouth recommendations are important to learn about CMOs that have delivered like projects.
Lack of experience can make it hard for sponsors, particularly in early phases, to have a full-horizon view of their project and, therefore, awareness of equipment needs for the long haul. Decision makers may be considering immediate needs only, which can be short-sighted and add costs and delays further along. A CMO can oversell its manufacturing assets, potentially leading to a request for capital investment down the road.
How to Avoid It
Like price, manufacturing assets should be evaluated through a big-picture lens. Ask yourself, “With every action I take with my CMO, where does this take me? What’s my next action going to be with them?”
It’s important to ask your CMO to lay out the journey you can take with them if you are successful at individual stages and phases. Find out how the CMO will support your project, what equipment they have available at each phase, and how your project fits into their utilization 18 and 36 months out. If you are cognizant of the tasks to come, not just those at hand, you’ll be better prepared to select the right CMO – one that can take the project to completion. For that reason, I recommend a full-service CMO that can address all phases of need, from development through commercial manufacturing.
In previous columns, I’ve talked about the two sides of a ledger – evaluating the tangibles on the one hand, and the intangibles on the other – when evaluating CMOs. One mistake is paying too much attention to the tangibles – the equipment, the budget, the timelines – and not enough to the intangible of relationship between the CMO and the sponsor. Discounting relationship is a mistake, and not paying attention to red flags or minimizing them can lead to regret.
How to Avoid It
In addition to making sure price, equipment, and expertise are lined up, make sure the relationship is in alignment too. Ask yourself, “When we hit the inevitable hiccup, how will this CMO respond?” Talking with a CMO customers, getting word-of-mouth recommendations, can help you develop an understanding of the CMO’s culture and commitment to its sponsors. Look for CMOs where problems are a relationship-strengthening experience, not a diminishing one.