Manufacturing Strategy
Phased approach from contract manufacturing to full vertical integration.
COGS Progression
$180
Phase 1
$140
Phase 2
-22%
$85
Phase 3
-53%
Cost per unit decreases as manufacturing scales and moves in-house
PHASE 1
Contract Manufacturing
Months 0-24
Partner with established CMOs for initial production. Focus on product development and regulatory clearance.
Strategy
- •Select FDA-registered CMO with hydrogel/biologics experience
- •Tech transfer of formulation and process
- •Establish QA/QC specifications
- •Build inventory for launch
Cost Structure
Setup Cost$200K-300K
Cost per Unit$180
Batch Size500 units
Annual Capacity10,000 units/year
Trade-offs
ADVANTAGES
- +Minimal capital investment
- +Leverage existing FDA-compliant facilities
- +Flexible scaling
- +Focus resources on R&D and commercialization
RISKS
- −Supply chain dependence
- −Lower margins
- −IP exposure
- −Quality control distance
PHASE 2
Hybrid Model
Months 24-48
In-house QC and finishing operations while maintaining CMO for bulk manufacturing.
Strategy
- •Establish in-house quality laboratory
- •Bring final formulation and packaging in-house
- •Maintain CMO for component manufacturing
- •Build cell processing capabilities for Phase 2 product
Cost Structure
Setup Cost$1.5M-2M
Cost per Unit$140
Batch Size1,000 units
Annual Capacity50,000 units/year
Trade-offs
ADVANTAGES
- +Improved margins (22% reduction in COGS)
- +Better quality control
- +Faster iteration on formulation
- +Cell handling expertise development
RISKS
- −Increased capital requirements
- −Regulatory complexity (facility registration)
- −Staffing challenges
PHASE 3
Vertical Integration
Months 48+
Full in-house manufacturing with domestic sourcing. Maximum control and margins.
Strategy
- •Dedicated manufacturing facility
- •Domestic raw material sourcing
- •In-house cell banking and processing
- •Automated production lines
Cost Structure
Setup Cost$8M-12M
Cost per Unit$85
Batch Size5,000 units
Annual Capacity500,000 units/year
Trade-offs
ADVANTAGES
- +Maximum gross margins (82%+)
- +Complete supply chain control
- +Rapid response to demand
- +Full IP protection
RISKS
- −Significant capital investment
- −Facility qualification timelines
- −Operational complexity
Supply Chain Components
🧪
Hyaluronic Acid
Medical-grade HA for hydrogel base
Source: Fermentation-derived
Phase 3: Domestic supplier
🌿
Alginate
Ultra-pure alginate for crosslinking
Source: Seaweed-derived
Phase 3: Domestic supplier
🔬
Growth Factors
NGF, PDGF-BB, BMP-7, BDNF
Source: Recombinant production
Phase 3: In-house expression
💉
Delivery System
Pre-filled syringes, packaging
Source: Contract packaging
Phase 3: In-house
Quality Systems
Regulatory Compliance
- ✓21 CFR Part 820 (QSR)
- ✓ISO 13485:2016
- ✓cGMP for biologics (Phase 2+)
Testing Requirements
- ✓Sterility testing
- ✓Endotoxin limits
- ✓Growth factor potency
- ✓Rheological properties
Shelf Life
- ✓Target: 24 months at 2-8°C
- ✓Real-time stability studies
- ✓Accelerated aging protocols
Domestic Sourcing Strategy
Phase 3 emphasizes US-based supply chain for security, quality control, and regulatory simplicity.
Benefits
- •Reduced supply chain risk
- •Faster response to demand changes
- •Simplified regulatory documentation
- •Quality audit accessibility
Target Regions
- •Northeast corridor for biomanufacturing
- •Research Triangle for R&D
- •California for component suppliers