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Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market 2019: Opportunity, Trends, Share, Top Companies Analysis

(, June 26, 2019 ) For the Contract Manufacturing Outsourcing (CMO), the growing 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 for both clinical and commercial stage manufacturing. In the case of CRO's research and development is one of the largest key areas of investment in the pharmaceutical and biotech industry. Companies spend a high share of their capital and profits on research and development to produce better drugs at cheaper costs. This provides the pharma companies with a considerable competitive advantage, as price and function are the only competitive variables in the pharma and biotech market.

- Increased competition and shrinking profit margins have compelled pharma companies to revisit their production processes on drug R&D, instead of manufacturing the formulated drug to stay competitive in the market. The biggest 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 highly effective in meeting regulatory requirements.
- CMOs are consolidating as a means of improving profitability in this crowded and competitive market. Through consolidation, large CMOs can expand their geographic presence and penetrate niche markets, whereas, small CMOs can leverage the technical expertise and resources of larger CMOs.
- The United States as a nation is one of the largest R&D spenders in the pharmaceutical and biotechnology sector. According to Axios, a prominent online News company in the United States, as of 2018, pharmaceutical industries in the country have the tenth highest average after-tax profit levels when compared to more than 100 different industries. Also, it is estimated that while drug companies are responsible for 23% of the US health revenue, they also make 63% of the total profits.
- Further, the business models followed by CROs are putting them at a considerable advantage in the current market scenario. Currently, CROs either run in a preferred provider model or make strategic alliance partnerships with pharma companies. In the preferred provider model, the pharma company or the developer will get an exclusive price for CRO services, in exchange for guaranteeing a big part of the work to be outsourced to the CROs.

Scope of the Report
The pharmaceutical contract development and manufacturing market study is classified as Contract Manufacturing Outsourcing (CMO) and Contract Research Organization (CRO) which are further segmented based on type, research phases, geography relevant to the market. In the CMO service type breakup for the regional level has been considered for the study. CRO market scope is limited only to the regional level as against CMO where country-level segmentation is also present.

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Key Market Trends
Focus on Pre-clinical Development Services in CMO

- The biopharma industry has been consistently growing at a robust rate for the past five years. Being the largest and a consistently fast-growing segment of the healthcare industry, significant expansion is expected in the CMO market, reflecting demand, as many of the pharmaceutical companies continue to outsource.
- CMOs are focusing more on pre-clinical development services, such as formulation development, process support, process development, clinical trial manufacturing, analytical services, and regulatory support, in addition to offering lifecycle management and technology transfer capabilities.
- In-house pre-clinical development services and technology transfer are translated into higher overhead costs for pharma companies compared to outsourcing.
- One of the key trends in the last few years has been the emergence of CMOs in emerging markets, particularly in the BRIC nations (Brazil, Russia, India, and China). India and China are among the fastest growing segments in the APAC region. However, issues with delivery, service, and product quality are restraining this market.

Asia-Pacific Expected to Witness Highest Growth IN CRO Market

- Over the forecast period, Asia-Pacific is expected to witness the highest growth in the CRO market, owing to the low cost offered by the region, as compared to the United States and other developed economies. Additionally, growing incidences of chronic and lifestyle diseases, such as diabetes and heart disease, coupled with ease of patient recruitment and availability of expertise for clinical trials, are few driving factors boosting growth in the region.
- With increasing privatization of clinical trials, there has been an increase in the outsourcing of research processes in developing regions, such as China and India. For instance, the market is witnessing increased outsourcing of research services, such as Clinical Data Management, Pharmacovigilance, Biostatistics, etc., by large pharmaceuticals.
- Growing investments by several pharmaceutical and biopharmaceutical drugs manufacturing companies are also supporting the growth of the CRO market in the region. As part of its five-year Research, Innovation, and Enterprise 2020 plan, the Singaporean government has committed to invest nearly USD 2.4 billion, in advancing manufacturing and engineering in the pharmaceutical market.
- In January 2019, Lambda, headquartered in India, announced the acquisition of US-based Novum Pharmaceutical Research Services, in a move to increase its presence in the United States.

Competitive Landscape
The market is slightly consolidated in both the CMO and CRO segment. The need for continued research and development related expenses push forward for the extension of business opportunities. For instance, in the pharmaceutical industry, medicine is continuously tested and are most profitable during the patent period, the emergence of competitive solution can hamper the rate of return. Such factors push for continued innovation and fast track the introduction time to market. Partnerships, long term collaboration, mergers, and acquisitions are among the prevalent strategies in this market.

- May 2019 - Recipharm launched Recipharm Inhalation Solutions that offer pharmaceutical companies an outsourcing service for inhalation products, including metered dose inhalers (MDIs), dry powder inhalers (DPIs), and nasal sprays.
- April 2019 - LabCorp and Envigo signed an agreement to expand Covance’s non-clinical drug development capabilities and create an independent research model and services provider. Covance’s drug development division is expected to acquire Envigo’s non-clinical research services business and Envigo’s research models services business may acquire the Covance’s research products business.
- February 2019 - Jubilant Biosys, collaborated with Snafu in the CNS therapeutic area. The first collaboration with Sanofi started in 2016, to discover and develop small molecule inhibitors for multiple targets in the metabolic disorders therapeutic area.

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- 3 months of analyst support

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Major Point of TOC:






Chapter Six: Competitive Landscape



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