NAMs move into the mainstream - and US manufacturing capacity is racing to catch up

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The rise of New Approach Methodologies (NAMs) is creating a new manufacturing opportunity for the biopharmaceutical industry.

As regulators in the US and Europe push for greater adoption of human-relevant models that can reduce reliance on animal testing, demand is growing for the high-quality iPSC-derived cells needed to support drug discovery, safety assessment and emerging therapeutic applications.

For Fujifilm Cellular Dynamics, that shift is already reshaping manufacturing strategy. The company is expanding its footprint in Madison, Wisconsin - the birthplace of its iPSC technology - to create additional capacity for both therapeutic manufacturing and the rapidly developing NAMs market.

"We always say we did NAMs when they weren't called NAMs," says Nina Bauer, SVP Strategy & Commercial at Fujifilm Cellular Dynamics. "But we really saw an uptick in demand over time, and NAMs have only really emerged as a major focus over the last 18 months."

The expansion reflects a wider transformation taking place across the US biopharmaceutical manufacturing landscape. While much of the cell and gene therapy conversation has historically focused on scientific breakthroughs, companies are increasingly investing in the infrastructure required to manufacture these products consistently, at scale and under increasingly demanding regulatory standards.

The decision to expand in Madison was driven by both operational requirements and market opportunity. The company's original facility was established when Cellular Dynamics was still a small biotechnology company spun out of the University of Wisconsin-Madison. As the business evolved from a therapeutic developer into a CDMO supporting external customers, the need for larger, commercially ready manufacturing capacity became clear.

"Building such a facility takes some time, so you have to look back probably about five years," says Bauer. "When Fujifilm acquired Cellular Dynamics, it was a really small startup company out of Madison, with little offices and labs spread across different buildings. As we grew, it became clear that where we were wasn't going to work long term."

The expansion also reflects the increasing complexity of supporting advanced therapies.

"We originated as a therapeutic developer, but we had a shift in strategy towards the CDMO services business and the NAMs business," she explains. "With these programmes and new ones coming in, we knew we wouldn't have enough space."

Madison remains central to that strategy because of its established biotechnology ecosystem, workforce and academic links.

"We're a Madison company, and expanding there was a very deliberate decision," says Bauer. "The technology was spun out of the University of Wisconsin-Madison, so we still have close ties with the university."

The region's workforce infrastructure has also supported expansion.

"We work very closely with BioForward on workforce development. They engage high school students all the way through universities, and they regularly ask what we're seeing, what is changing and what we need."

Despite significant investment across advanced therapies, manufacturing remains one of the sector's biggest challenges.

Unlike traditional biologics, where the final therapeutic product is typically a purified molecule, cell therapies rely on the cells themselves as the therapeutic agent.

"The biggest bottleneck is that many steps in the manufacturing process are still very manual," says Bauer.

Automation is progressing, but industry needs greater process understanding.

"We do have a mandate internally to move more into AI, but AI is a very short word for many different things," she explains. "It's not going to come in and suddenly means you only need a third of the workforce."

Instead, the immediate opportunity is using AI to improve quality control and generate deeper insight into cell behaviour.

"Where AI comes in first is really more on the cell quality monitoring side. You take pictures at regular intervals, and AI can tell you whether your cells are still on the right track."

The company is also applying AI to large biological datasets generated through its manufacturing processes.

"We have an enormous amount of data that we push through AI for pattern recognition," she says. "You need to have something to tell the automation systems. Otherwise, you just have a fancy machine that still needs a human behind it."

The new manufacturing capacity will support two growing areas of demand.

Currently, activity is weighted towards NAMs, although therapeutic manufacturing demand is increasing as cell therapy developers advance programmes.

"Activity-wise, we're probably around two-thirds NAMs and one-third therapeutic manufacturing," says Bauer. "We are definitely seeing an influx of therapeutic players that need support, and we are hoping to approach a 50-50 balance."

Customer demand is also reflecting changes in biotech financing. Early-stage companies are increasingly approaching CDMOs before they have secured funding, looking for manufacturing strategies that strengthen investment discussions.

"They come to us saying, 'We're still raising funding, but what would manufacturing look like?' We help them by providing a proposal and showing what that relationship could look like."

The largest volume of activity currently comes from mid-sized biotechnology companies, many supported by larger pharmaceutical partnerships.

The Madison expansion comes as the US seeks to strengthen domestic manufacturing capabilities across critical healthcare sectors.

For Fujifilm Cellular Dynamics, the location provides access to a specialised workforce, academic expertise and an established life sciences ecosystem.

However, the company is also leveraging a wider global network, with manufacturing and development capabilities across the US, Europe and Japan.

The opportunity, says Bauer, is not simply about adding capacity—it is about creating infrastructure capable of supporting the next generation of medicines.

As NAMs move closer to mainstream adoption and cell therapies progress towards commercialisation, manufacturing capability will increasingly determine which technologies can successfully reach patients.