Growing Demand for Contract Pharmaceutical Organizations

Contract development and manufacturing organizations (CDMOs) have played an increasing role in getting new pharmaceutical products to market over the past decade. The expanding CDMO industry has leveraged its adaptable nature to tackle increasingly complex regulatory requirements and accelerated development speeds, while maximizing financial return.

CDMOs are positioned for exponential growth.  As big pharma focuses its resources on developing patent-protected products, partnering with best-in-class CDMOs is vital for these pharmaceutical organizations to serve their customers and create value for their shareholders.

The benefits of partnering with CDMOs range from reduced capital costs, de-risking R&D expenditures, increasing go-to-market speed and diversifying operational capabilities. Through engagement with CDMOs, pharmaceutical companies can streamline development processes, drive growth and devote added resources to innovation and discovery.

CDMOs have become an instrumental fixture across the pharmaceutical industry – expanding throughout the United States, Europe and other key markets. Advancing science and technology has enabled revolutionary discoveries across the pharmaceutical industry. Accelerating development and manufacturing processes enables life-saving products to reach at-risk populations quickly.

With the stature of CDMOs validated and thought leadership from the sector continuing to elevate, the following industry trends have emerged.

  • Unique & Diversified Technical Capabilities

Pharmaceutical companies have a growing preference for CDMOs offering diverse technical capabilities. By diversifying across product forms and stages of product development CDMOs are better equipped to meet the needs of a broadening customer base. CDMOs offering a fully integrated solution has led to accelerated development timelines and streamlined approval processes, while diversifying capabilities across product forms like tablets, injectables, and transdermal products has enabled CDMOs to serve customers entire product portfolio. The diversification of technical capabilities has driven CDMO growth and optimized value through the development of comprehensive, strategic partnerships with pharmaceutical companies.

  • Therapeutic Specialization

Specialization has emerged as a key trend across the CDMO industry. Players engaging in therapeutic specialization tactics, seek to achieve differentiation and a competitive advantage in more niche markets. Rapid technological advancements have required continued adaptations by CDMOs to meet the needs of novel innovations. Specialized CDMOs are proving especially successful in meeting the demands of emerging platforms. Thus, pharmaceutical companies have increasingly turned to specialized CDMOs to meet development needs for even the most complex and revolutionary products. As advancements continue to occur, specialized CDMOs across focus areas are set to emerge and grow.

  • Geographic Expansion

A prominent trend seen across the CDMO industry is geographic expansion. With expansion occurring both domestically and globally, CDMOs are preparing to serve a larger and more distributed customer base. Global CDMOs can meet regulatory requirements across regions which is highly valuable for go-to-market speed. Reductions in risks associated with regional shutdown, supply chain stressors and facility closures are also mitigated through geographic dispersion.  Expanding the geographic footprint of CDMOs to regions with lower development and manufacturing costs has also proven financially advantageous for product development. Through geographic expansion, CDMOs can better serve customers globally while stabilizing supply chains and reducing cost.

The CDMO industry is undergoing a major transformation. The CDMO industry is beginning to consolidate. Yet, there remains considerable fragmentation, presenting major opportunity for investment. Multiple consolidations pathways are being considered as CDMOs seek to expand.

By streamlining development processes, reducing capital costs, and navigating regulatory requirements contract organizations are critically impacting the go-to-market process. The industry is experiencing ever increasing business from pharmaceutical, biotech and medical device organizations. Complimenting this influx, a growing interest from private investors and major corporations has sparked even greater opportunity for CDMOs globally. As technology continues to transform the pharmaceutical industry, best-in-class, reliable and adaptable contract organizations will continue to experience dramatic growth.

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Health Care Practice