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Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)
The Pharmaceutical CDMO Market was valued at USD 183. 62 billion in 2021. It is expected to reach USD 289. 64 billion by 2027, registering a CAGR of 7. 29% during the forecast period. Key Highlights
New York, June 10, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)" - https://www.reportlinker.com/p06221874/?utm_source=GNW
As a result of the rising demand for generic medicines and biologics, the capital-intensive nature of the business, and the complex manufacturing requirements, many pharmaceutical companies have identified the potential profitability in contracting with a CMO (contract manufacturing outsourcing) for both clinical and commercial stage manufacturing.
The most significant factor driving the growth of CMOs in the pharmaceutical industry is the growing need for state-of-the-art processes and production technologies, which have proven significantly effective in meeting regulatory requirements.
The pharmaceutical companies have been directing their priorities toward core competency areas. Hence, they prefer not to dispense available resources, expertise, and technology on formulating the final dose of medicines. The increased competition and shrinking profit margins compelled the pharmaceutical companies to revisit their production processes and R&D activities instead of manufacturing the formulated drug to stay competitive in the market.
The complexity of the biopharmaceuticals and the highly personalized medical therapies and devices drive the increased complexity in the supply chain operations and lead to increasing reliance on contract manufacturing. Factors such as these are helpful in the proliferation of the CMO market. In March 2021, Fujifilm Diosynth Biotechnologies selected Holly Springs, North Carolina, for its new JPY 200 billion large-scale cell-culture biomanufacturing site. The new facility will provide large-scale cell-culture manufacturing for bulk drug-substance production. The facility is expected to be operational by the spring of 2025.
The CMO/CDMO service sector is uniquely positioned to address some of the challenges drug developers face amid the COVID-19 pandemic. This pandemic has impacted multiple aspects of the pharma and biopharma industry, from drug development, clinical trials, supplies, manufacturing to supply chain logistics. However, the drug shortages due to COVID-19 are limited, and they are expected to remain so for the short term due to stockpiles of pharmaceuticals and APIs globally.
Key Market Trends
Increasing Investment in R&D expected to Drive the Market
The United States is the largest market for drugs worldwide and accounts for about half of the R&D expenditure in the pharmaceutical and biotechnology markets. Hence, CMOs play a critical role in this market and have invested in new facilities and technologies to cater to a wide range of outsourcing units. Besides capturing the benefits of a location in Asia through an in-house investment, the companies are also turning to research-based partnerships as a way of high-end sourcing expertise, building drug discovery, and manufacturing investments in Asia.
The Chinese professional manufacturer of drugs for dermatology and anti-tuberculosis, Huapont, is one of the fastest-growing pharmaceutical manufacturers in China, mainly dependent on R&D and market expansion. CRO/CMOs are able to leverage their expertise, owing to their R&D and complex manufacturing capabilities, to fill the needs of the large generic pharmaceutical and biotech companies.
The gradual change in the working principles of the companies in the market led to the shift in pattern, from cost-control to re-emphasis on value-added services. They also allowed their integration into the value chain of companies. The highly fragmented nature of the US pharmaceutical contract manufacturing market, with more than 150 CMOs, results in competition (in terms of price) and drives impacts the revenue of CMOs.
R&D investments, as well as capacity expansions, are expected in the injectable and sterile liquid dose formulations segment. Small biotech firms get access to specialized knowledge and resources, which help them expedite their R&D activities. Greater technological complexity in drug development and greater specificity in targets helped in the average R&D costs, as firms identify drugs with particular molecular characteristics, as opposed to using trial-and-error methods to find compounds that work in the desired way.
Furthermore, the need to have proper infrastructure for the safe handling and safe containment of highly potent drugs, as well as the need for suitable analytical capabilities, particularly for high potency drugs, proper project management (that includes proper induction, running, and completion) highlight the need for R&D in the market.
North America is Estimated to hold the largest market for CMO
Contract manufacturing organizations (CMOs) in the United States have evolved from initially providing basic manufacturing services to providing a wide range of services that suit the demand of the market and the outsourcers. The steady growth of the US pharmaceutical industry and increased outsourcing of large pharma companies that are focusing on core competencies to improve profit margins are driving the market in the country.
The stricter regulation in the country ensures superior quality of the manufacturing and the end-product that is being adhered to by the CMOs. For instance, the process of manufacturing autologous or allogeneic therapies is complex, and the manufacturing facilities are required to attain a GMP accreditation.
There are more than 800 active Investigational New Drug (IND) waiting for approval from the FDA. This burgeoning approval and drug-developing pipelines are expected to promise more opportunities to CMOs in the future. Nevertheless, many of the drugs approved had orphan designation, which suggests that they are targeted at people with rare diseases.
The pharmaceutical industry of Canada is one of the most innovative in terms of products. Pharmaceutical, a key sector of the Canadian economy, is supported by the Canadian government, which provides a business-friendly environment for pharmaceutical companies and can leverage assets for short- and long-term business strategies.
In the wake of the patent cliffs, pharmaceutical companies in the country are reorganizing and looking for new business models built on third-party partnerships and external networks. This model of business mostly relies on outsourcing most of the operations, including manufacturing, thereby providing good growth opportunities for CMOs in this region.
Competitive Landscape
Although the market studied is highly fragmented, major vendors account for the majority of the market share. The presence of many players in the market studied has an impact on the pricing of services, making it a direct competing factor, especially for small-scale vendors. The vendors in the market studied are expected to focus on providing one-stop-shop services, which would provide them with a competitive advantage. These practices would be possible for the CMOs with access to large capital. This factor increases the competition and acts as a barrier to entry for new players.
March 2022 - Catalent announced a collaboration agreement focused on the generation, testing, and manufacturing of dry powder formulations for a range of biotherapeutics through the application of TFF Pharmaceuticals’ patented Thin Film Freezing (TFF) technology.
February 2022 - Recipharm announced the acquisition of Arranta Bio, a prominent advanced therapy CDMO. The acquisition is a key component of Recipharm’s ambition to provide scientifically differentiated contract development and manufacturing services to innovative medication developers in the biologics sector.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report: https://www.reportlinker.com/p06221874/?utm_source=GNW
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