BIOPHARMACEUTICAL CMO AND CRO MARKET ANALYSIS

The global biopharmaceutical CMO and CRO market was valued at US$ 32.4 Bn in 2022 and is forecast to reach a value of US$ 54.1 Bn by 2030 at a CAGR of 5.9% between 2023 and 2030. The global biopharmaceutical CMO and CRO market is experiencing strong growth due to the rise in burden of chronic diseases and growing trend of outsourcing across the globe. Moreover, increasing demand for biologics or biosimilars and rapid growth of the biopharmaceutical industry is expected to boost the market growth. However, factors such as stringent regulatory framework and rise in cost of raw materials are expected to hamper the market growth.

Global Biopharmaceutical CMO and CRO Market: Regional Insights

Based on geography, the global biopharmaceutical CMO and CRO market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa.

Among regions, North America is expected to gain highest share in the market during the forecast period owing to the increasing incidence of chronic diseases, increasing demand for generics and biologics, rise in demand for biosimilars, and rising investments in the biopharmaceutical industry. For instance, in September 2022, Pfizer announced multi-year partnership with CytoReason to use CytoReason’s artificial intelligence (AI) technology for Pfizer’s drug development programs. The partnership will support the development of additional disease models and the creation of the high-resolution models, spanning across a number of therapeutic areas.

Europe and Asia Pacific are also expected to witness robust growth in the global biopharmaceutical CMO and CRO market due to the rise in burden of chronic disease, increasing demand for generics, biologics, and biosimilars, increasing drug discovery and drug development, and rapid growth of the biopharmaceutical industry. For instance, Hamburg is on its way to becoming a leading hub of Europe's academic drug discovery, with the German city's town hall announcing the foundation of European ScreeningPort GmbH, in April 2023, (European Centre for Modern Drug Discovery), a company that will run a state-of-the-art drug discovery service centre.

Figure 1. Global Biopharmaceutical CMO and CRO Market Share (%), by Region, 2023

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Global Biopharmaceutical CMO and CRO Market Drivers:

High demand for biologics/biosimilars to propel market growth

One of the key factors expected to augment the growth of the global biopharmaceutical CMO and CRO market over the forecast period is the increasing demand for biologics and biosimilars around the world. For instance, in February 2023, Enzene Biosciences, subsidiary of Alkem Laboratories begun commercial supplies of adalimumab biosimilar used for treating autoimmune disease such as rheumatoid arthritis and ankylosis spondylitis. Enzene Biosciences believes that the commercial launch using continuous manufacturing technology will help reduce a cost of rheumatoid arthritis treatment for millions of patients across India.

Growing trend of outsourcing to boost market growth

Another factor which is driving the growth of the global biopharmaceutical CMO and CRO market is the growing trend of outsourcing in the biopharmaceutical industry. For instance, in November 2021, Baxter International Inc. announced around US$ 100 million expansion of its sterile fill and finish manufacturing facility located in Halle or Halle Westfalen, Germany. The facility is operated by BioPharma Solutions (BPS), a business unit of Baxter that specializes in partnering with leading pharmaceutical and biotech companies on the development and contract manufacturing of drug products for parenteral (injectable) pharmaceuticals.

Global Biopharmaceutical CMO and CRO Market Opportunities:

Growing incidence of chronic diseases around the world is expected to provide significant growth opportunities for players in the biopharmaceutical CMO and CRO market. For instance, with the rise in burden of chronic diseases, the demand for safe and effective therapeutics is also increasing with a rapid pace. Which in turn propel the drug discovery and drug development process. In May 2023, Alkem Oncology announced the launch of Cetuxa, the world’s first biosimilar of Cetuximab used to treat head and neck cancer. Cetuxa has been researched and manufactured indigenously by Enzene Biosciences Limited, the biological arm of Alkem Laboratories.

Rapid growth of the biopharmaceutical industry is expected to offer lucrative growth opportunities for players in the biopharmaceutical CMO and CRO market. For instance, with the rapid growth of the biopharmaceutical industry, the trend of outsourcing is also increasing with the rapid pace. According to India Brand Equity Foundation (IBEF), Indian biotechnology industry is expected to reach around US$ 150 billion by 2025 and has the potential to reach around US$ 270-300 billion by the year 2030. Moreover, by 2025, the contribution of the Indian biotechnology industry to the global biotechnology market is expected to grow to 19%

Global Biopharmaceutical CMO and CRO Market Trends:

Increasing demand for API manufacturing is a recent trend

Active Pharmaceutical Ingredients (API) manufacturing is witnessing a steady growth in demand over the last few years. This is attributed to rise in burden of cancer and age-related diseases, rise in the global generic production capacities, and innovation in biologics. Thus, players in the market are focusing on the development of biological APIs, increasing the API manufacturing capacities. This in turn is expected to offer better opportunities for CMOs, both in the biopharmaceutical and small molecule API sectors, and this trend is expected to continue over the forecast period.

Increase in research and development is another trend

Players in the market are engaged in research and development activities for the development of safe and effective drugs to treat chronic, genetic, respiratory, and other age-related diseases and to reduce global disease burden. In November 2022, Sanofi and Insilico Medicine signed a US$ 1200 million Drug Development Deal. The agreement will allow Sanofi to use Insilico’s AI platform to advance drug development in up to six new targets. This trend is also expected to continue during the forecast period, driving the growth of the market.

Global Biopharmaceutical CMO and CRO Market Restraints:

Stringent rules and regulations to hamper market growth

One of the key factors expected to hamper growth of the global biopharmaceutical CMO and CRO market is the stringent rules and regulations or stringent regulatory framework. The Food and Drug Administration (FDA) defines and regulates contract research organizations (CROs), and may hold CRO directly responsible for any sponsor obligations it assumes under an investigational new drug application. The CRO needs to ensure that the drug trial is properly managed, and that it complies with the Good Clinical Practice and Harmonisation Guidelines.

However, to increase productivity and improve efficiency, reliance on the Contract Manufacturing Organizations (CMOs) and Clinical Research Organizations (CROs) continues to increase.

Rise in cost of raw materials to hinder market growth

Another factor hampering the growth of the global biopharmaceutical CMO and CRO market is the rise in cost of raw materials. According to the Indian Drug Manufacturers Association (IDMA), as of July 2021, the cost of raw materials for essential drugs, called APIs in the pharma sector, has seen a steep rise of around 140% since the pre-pandemic levels, posing a challenge for the industry. The overall increase, averaging around 50% owing to high-priced imports and supply disruptions from China, has raised concerns regarding the availability of drugs and could lead to shortages.

Figure 2. Global Biopharmaceutical CMO and CRO Market Share (%), by Source, 2023

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Global Biopharmaceutical CMO and CRO Market Segmentation:

The global biopharmaceutical CMO and CRO market report is segmented into Source, Service, Product, and Region.

Based on Source, the market is segmented into Mammalian and Non-Mammalian. Out of which, Mammalian Segment is expected to dominate the biopharmaceutical CMO and CRO market over the forecast period and is attributed to the increase in mammalian cell culture production, which leads to more productive and efficient manufacturing of biologics using mammalian cells.

Non-Mammalian Segment is also expected to witness significant growth in the near future and this is due to the increasing usage of non-mammalian sources to manufacture bio-therapeutics such as enzymes, hormones, cytokines, and antibodies.

Based on Service, the market is segmented into Contract Manufacturing and Contract Research. Out of which, Contract Manufacturing Segment is expected to dominate the biopharmaceutical CMO and CRO market over the forecast period and this is attributed to the increasing development and production of biopharmaceuticals.

Contract Research Segment is also expected to witness significant growth in the near future and this is owing to increasing research and development activities.

Based on Product, the market is segmented into Biologics and Biosimilars. Of which, Biologics Segment is expected to dominate the market over the forecast period and this is attributed to the increasing demand for biologics across the globe.

Biosimilars Segment is also expected to witness significant growth in the near future and this is owing to increasing demand for biosimilars worldwide.

Global Biopharmaceutical CMO and CRO Market: Key Developments

In February 2023, Lunaphore and Sirona Dx announced a strategic collaboration in which Sirona Dx will become the first CRO to offer Lunaphore’s flagship COMET spatial biology platform. A COMET will complement Sirona Dx’s portfolio of research service offerings to meet the needs of researchers and biopharma teams across various disciplines.

In March 2022, Meadowhawk Biolabs, Inc., a biotechnology and pharmaceutical CRO, announced the launch of its operations in the Boston and San Francisco areas.

In March 2022, Sterling Pharma Solutions UK, a global contract development and manufacturing organization (CDMO), announced the acquisition of Novartis Ringaskiddy Ltd.). Sterling acquired the 111-acre site, which includes three API manufacturing buildings, as well as facilities to support the development and scale-up in line with Sterling’s core business focus.

Global Biopharmaceutical CMO and CRO Market: Key Companies Insights

The global biopharmaceutical CMO and CRO market is highly competitive. This is attributed to the growing trend of outsourcing in the biopharmaceutical industry, as a result, market players are focusing on launching novel drugs/therapeutics in the market.

Some of the key players in the global biopharmaceutical CMO and CRO market are Allphase Clinical Research, AlcheraBio, Alcami, Akos Urgent Care, Agilent, AGC Biologics, Affinity Life Sciences, Inc., Actimus Bio, ACI Clinical, Accumedix, Inc., Absorption Systems, A10 Clinical Solutions, Albuquerque Clinical Trials (ACT), Ajinomoto Bio-Pharma Services, Advanced Clinical Services LLC, ACM Global Laboratories, Accelerated Enrollment Solutions, AbbVie Contract Manufacturing, Advanced BioScience Laboratories, Advanced Clinical Research Institute, and Alliance for Clinical Trials in Oncology, among others.

*Definition: Biopharmaceutical CMO (Contract Manufacturing Organization) is a company that serves other biopharmaceutical companies on a contract basis to offer services ranging from drug manufacturing services to packaging. While, contract research organization (CRO) is a company that provides support to biopharmaceutical companies in the form of research services outsourced on a contract basis.