Background and challenges
The client in this case was a clinical-stage biopharma company specializing in the development of therapeutics using antibody-drug conjugate (ADC), with operations spanning multiple sites including dedicated process development and Good Manufacturing Practices (cGMP) facilities. The company was facing a pivotal strategic shift after recently deciding to outsource key capabilities.
To align with this evolving strategy, the client sought to evaluate cost-efficient operating models that aligned with its longer-term strategy. Key challenges included realigning cGMP manufacturing operations to meet future needs, assessing the financial implications of structural changes to improve cost-effectiveness and creating a roadmap for effective implementation of changes.
Approach
The L.E.K. Consulting team undertook a comprehensive diagnostic to evaluate and align the cGMP manufacturing facilities with the client’s evolving strategy. The approach included the following key steps:
Phase 1: Establishing a baseline and strategic options
The team first established a baseline low-cost scenario, externalizing key manufacturing processes while maintaining the facility’s existing structure. This served as a cost-efficiency benchmark for comparison. Next, a range of strategic options was developed to realign the operational footprint with the client’s growth objectives while ensuring regulatory compliance and efficiency.
Phase 2: Quantifying and prioritizing scenarios
Each option was assessed based on its financial impact, operational feasibility and degree of strategic alignment. A prioritization framework highlighted the most feasible paths to cost savings and sustainable growth.
Phase 3: Financial and operational impact analysis
Our team identified key operational changes including workflow redesign and optimized resource use. A detailed financial analysis estimated savings, efficiency improvements and five-year financial impacts.
Phase 4: Business case and implementation roadmap
For the top strategic options, business cases were developed to quantify benefits and inform leadership decision-making. A high-level implementation roadmap provided key milestones and risk management strategies for execution.
Results
L.E.K.’s analysis enabled the client to adopt a strategic plan that optimized its cost structure and streamlined operational focus. Through the transition from in-house cGMP manufacturing to a more flexible external supply model, the client significantly reduced fixed costs and labor-related costs while reallocating resources to higher-value activities such as new product development and process improvements. The new approach enhanced financial performance, scalability and the client’s ability to innovate and remain competitive in a rapidly evolving market.
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