COGS Analysis for Novel Biologics Platform

A client determined how to achieve lower COGS through LBG’s expert analysis and modeling.


A large global NGO needed Cost of Goods Sold (COGS) analysis for a CDMO’s alternative biologics manufacturing platform. Traditional biologics manufacturing (e.g., mAbs) is well understood and easy to model. However, alternative platforms with a very different upstream process require more flexible modeling.

The client needed to understand the likelihood that the CDMO could achieve very aggressive COGS reduction targets. This involved:

  • Biologics expert review and analysis of current process
  • Understanding the impact of manufacturing scale on COGS
  • Identifying the risks versus traditional biologics.

The client partnered with LBG because of our in-depth biologics expertise, our previous experience working with clients with similar alternative biologics platforms, and our ability to provide a flexible modeling approach.


Our team performed both primary research (leveraging industry contacts, including biologics experts, financial modelers, and junior researchers) and secondary research (to validate and challenge assumptions). We collaborated with the client and the subcontractor to identify areas in which we agreed and areas in which we had different views to determine how these views impacted the resulting COGS.

The solution was a flexible Excel-based model that allowed for assessment of various inputs, such as labor, unique processing equipment, and utility costs, and how these factors changed as scale-up progressed. A presentation given as the final report showed outputs of various scenarios as well as sensitivities and risks. The timeline from kickoff to the final report was three months.

Results and Impact:

Our analysis enabled the client to understand the current COGS and how they could lower COGS with additional support and development. We assessed the current state compared to traditional COGS (50x reduction of <$1/g Ab) as well as a future optimized state of 100x reduction—a very large improvement over traditional mAbs that cost $15 – $35/g Ab.

The client was able to see much lower COGS than that of traditional biologics manufacturing and understand the drivers, optimization requirements, and potential risks that led to lower COGS, which enabled them to develop long-term plans with the subcontractor with regard to goals and project milestones. They have since hired LBG for multiple follow-on projects, including additional COGS assessments of other alternative biologics manufacturers, and providing technical coordination and strategic input for other programs as they move towards an IND.