For virtual biotechs and lean startups, choosing the right Contract Manufacturing Organization (CMO) is one of the most important decisions in early development.
The right partner can be the foundation for smooth IND filings, clinical supply readiness, and future commercialization.
The wrong one?
It can trigger delays, regulatory issues, budget overruns—and even force you to change vendors midstream.
Here’s a look at the most common CMO selection mistakes startups make—and how to avoid them.
1. Choosing Based on Price Alone
The Mistake:
Startups under pressure to conserve cash often gravitate toward the cheapest quote without fully evaluating technical capabilities, regulatory history, or quality systems.
Why It Hurts:
- Low-cost CMOs may lack the expertise needed for phase-appropriate CMC work.
- Cut-rate vendors may introduce hidden costs later (e.g., failed batches, inadequate documentation).
- Regulatory deficiencies during Pre-Approval Inspection (PAI) can stall or derail approval.
How to Avoid It:
Evaluate total value—technical expertise, regulatory track record, scalability—not just upfront pricing.
2. Failing to Align on Phase-Appropriate Expectations
The Mistake:
Assuming that all CMOs automatically know how to design manufacturing and testing processes appropriate for your stage (preclinical, Phase 1, Phase 3, etc.).
Why It Hurts:
- Early-stage development requires flexibility and understanding of evolving regulatory expectations.
- Late-stage or commercial-only CMOs may over-engineer Phase 1 supplies, wasting time and money.
How to Avoid It:
Select a partner experienced with clinical development at your intended phase—not just commercial production.
3. Ignoring Regulatory and Quality Systems Readiness
The Mistake:
Focusing purely on technical capabilities while neglecting the CMO’s quality systems and regulatory compliance history.
Why It Hurts:
- FDA warning letters, observations (483s), or compliance gaps can derail your submission.
- Poor documentation and record-keeping can force expensive remediation.
How to Avoid It:
Request and review:
- Recent regulatory inspection history
- Sample batch records, deviation reports, and change control logs
- Current GMP certifications and audit reports
4. Overlooking Scalability
The Mistake:
Choosing a vendor that can handle early batches but not later scale-up to Phase 3 or commercial volumes.
Why It Hurts:
- Technology transfers between CMOs add cost, risk, and regulatory scrutiny.
- Process validation (PPQ) planning becomes much harder when switching vendors late.
How to Avoid It:
Ask about scalability early:
- What are their batch size capabilities today—and how easily can they scale?
- Can they handle clinical to commercial transition if your program succeeds?
5. Not Defining Ownership of IP, Methods, and Data
The Mistake:
Failing to ensure clear contractual language around method ownership, process IP, and data rights.
Why It Hurts:
- You may find yourself unable to freely transfer methods to a new CMO or commercialize.
- Disputes over ownership can delay filings and commercialization.
How to Avoid It:
Work with legal and regulatory experts to negotiate clear ownership terms before work begins—not after.
Final Thoughts
For virtual biotechs, your CMO is an extension of your company.
A strong CMO partner helps you stay inspection-ready, file faster, and advance without costly setbacks.
A poor fit?
It can drain resources, delay approvals, and weaken investor confidence.
At DSI, we help startups and virtual sponsors select, qualify, and manage CDMOs/CMOs with an eye toward long-term regulatory success.
If you’re preparing for IND, clinical supply, or future commercialization, we can help you avoid CMO selection mistakes—and set your program up for success from the start.
