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Global Small Molecule CMO Market 2019: Analysis On Size

Global Small Molecule CMO Market 2019: Analysis On Size

Lonza Group, Wuxi AppTec, Catalent, and Patheon Dominating

Small molecule drugs are organic compounds with defined chemical structures and molecular weights typically ranging from 500 to 900 Daltons. Unlike biologics, these compounds can easily diffuse across cell membranes to reach intracellular sites and are designed to modulate a specific target that controls the biological processes associated with a specific disease.

In the last few years, though there is an increase in the growth of biologics market, small molecules continue to dominate the global therapeutics market. In 2018, FDA approved 59 drugs, of that 42 were small molecules and only 17 were biologics. Similarly, many small molecules are going off-patent, paving way for generics into the market through ANDA approval, 23 drugs received ANDA approval in 2018, creating a favorable opportunity for the Pharmaceutical contract manufacturers. During the period 2017-2018 475 companies filed type II DMFs and these filings indicate that majority of the companies are focusing in therapeutic areas like metabolic disorders (Type 2 diabetes), Musculoskeletal disorders (Psoriatic arthritis), Cancer (breast cancer), CNS (Major depressive disorder) and multiple fibrosis.

The global expenses for small molecule manufacturing is $xx billion, of that contract manufacturing occupies x.x% growing at a high single digit CAGR from 2018 to 2025 and expected to increase share during the forecast period. As estimated by IQ4I Research and Consultancy, the Pharmaceutical Contract Manufacturing Global Market is expected to grow at a high single digit CAGR to reach $95,904.9 million by 2025. The major factors driving the market includes patent expiration of small molecule drugs, increasing number of small molecules in clinical trials, increasing outsourcing by the pharmaceutical companies, CMOs investments to expand manufacturing facilities, rise in incidence of chronic and age-related diseases, rapid growth in oncology market, technological advancement like cryogenic and continuous flow manufacturing. However, contamination during manufacturing, side effects associated with small molecules, increasing shift towards biologics and stringent regulations are hindering the growth of the Pharmaceutical Contract Manufacturing market.

Even though, the CMO market witnessed some of the strategic acquisition and mergers by contract manufactures to expand their respective service portfolios, the market remained fragmented with the top-15 players in the sector only occupying ~10%-15% market share. Some of the contract manufacturing organizations (CMOs) are transforming into Contract development and manufacturing organization (CDMO) by offering end to end services, ranging from development activities including clinical trials to commercial scale production and regulatory filings. The pharmaceutical CMO’s estimated capacity is 43.3% of total pharmaceutical manufacturing volume. The capacity utilization of total CMO manufacturing volume during 2018 was estimated to be 65% and expected to grow at a mid single digit CAGR from 2018 to 2025 to reach 72% capacity utilization by 2025. In 2018, Global small molecule API production was estimated to be 350kt of which CMO production accounted for more than half.

The Pharmaceutical Contract Manufacturing global market is segmented based on the Product, Customer base, dosage forms, phase, and applications. Among Product, API Manufacturing holds the maximum revenue in 2018 and FDF Manufacturing is expected to grow at a strong single digit CAGR from 2018 to 2025, due to rising demand for FDF manufacturing, increase in controlled release dosage forms, oral dosage forms for the treatment of oncology and rise in generic injectables. Generics are the key driver of the contract manufacturing of API and FDF due to their cost advantage over branded drugs. API Manufacturing by customer base is further sub-segmented into Branded and Generic. Generic API manufacturing holds the maximum share in 2018 and expected to grow at a high single digit CAGR from 2018 to 2025, due to patent expirations of drugs, increase in government initiatives to use generic drugs, increasing ANDA approvals and expansion of generic API manufacturing facilities to meet global demand. FDF Manufacturing by customer base is further sub-segmented into a solid dosage form, semi-solid, liquid, gaseous dosage form, and injectable dosage forms. Among these solid dosage form holds the maximum share in 2018 and expected to grow at a mid single digit CAGR from 2018 to 2025, due to increase in oral solid dosage form as it is more convenient to patients than other dosage forms. However, the injectables are expected to grow at a double digit CAGR from 2018 to 2025, due to growth in use of generic injectables, increase use of injectable in chronic diseases and cancer.

Pharmaceutical contract manufacturing by phase is segmented into commercial manufacturing and clinical manufacturing. Commercial manufacturing holds the highest revenue in 2018 and expected to grow at a single digit CAGR from 2018 to 2025, due to huge demand for commercial API production, patent expiry increases commercial manufacturing of API and FDF and increase in outsourcing of generic APIs. Whereas, clinical manufacturing is expected to grow at a high single digit CAGR from 2018 to 2025, due to increase in the number of pipeline drugs where 55-60% of the APIs are synthetic API clinical phase 2 and 3 projects requiring cGMP facilities and increase in outsourcing by innovator pharma companies due to low cost manufacturing and shorter timelines. Also, clinical manufacturing play a significant role in securing client relationships that can lead to commercial scale manufacturing contracts.

Among the applications, Infectious diseases hold the highest revenue in 2018 and expected to grow at a high single digit CAGR from 2018 to 2025, due to increase in incidence of infectious diseases like hepatitis A, B and C and human immunodeficiency virus (HIV), increasing awareness about the infectious disease and newly emerging diseases like dengue fever, ebola virus, yellow fever, swine flu and avian flu, and chikungunya. Oncology is expected to grow at a strong single digit CAGR from 2018 to 2025, due to increase in the incidence of breast and lung cancer, increase in the usage of synthetic HPAPIs for cancer treatment, investment in new drug development and increasing regulatory approvals of oncology drugs. Some of the oncology drugs approved in 2018 are Venclexta (Venetoclax), Daurismo (glasdegib), Lorbrena (lorlatinib), duvelisib (Copiktra), apalutamide (Erleada).

Geographically, the North American region held the largest market share in 2018 wherein, the United States accounted for the highest revenue. This growth is driven by the high investments in cardiovascular and cancer research, growing demand for cancer API’s, constructive government reforms, availability of highest number of FDA approved manufacturing facilities and demand for generic drugs and adaptation of novel manufacturing technologies. Europeheld the second largest share in 2018 where, Italy and Germany dominates the market, as Italy is the leader in API manufacturing mainly driven by exports, which represents 74% of the turnover and Germany is the leader in Finished dose formulation market.

Asia Pacific region is expected to grow with a high single digit CAGR from 2018 to 2025, due to the increase in the number of generic API production companies, rising affordability, enhanced life expectancy, improved standard of living and increase in population are driving the market. China and India are the low cost hubs for pharmaceutical contract manufacturing due to lower labor costs and capital expenditures. India has established itself as a significant player, especially in solid dosage form manufacturing for the large-scale production of generics for global markets. Availability of skilled workforce and lower labor cost are some of the factors propelling the rapid growth of the Asia-Pacific market.

The Pharmaceutical Contract Manufacturing global market is evolving with the increase in the number of API manufacturers. Many of the pharmaceutical companies without manufacturing and advanced capabilities of API and FDF tend to outsource manufacturing to CMOs. In pharma contract manufacturing market CMOs are strategically enhancing their service capabilities by acquisition, investment, an expansion for providing access to new API and FDF manufacturing capacity and technologies. For instance, in January 2019, Cambrex Corporation has acquired Avista Pharma, a contract development, manufacturing, and testing organization (CDMO) for about $252 million, the facility adds pre-formulation, formulation, process development.

Small molecules still dominate the early and late stage pipeline development. In order to tap the opportunity several CMOs are investing in expansion. For instance, in September, 2018, Evonik Industries AG invested €36 million ($42 million) to expand its CMO capability in API manufacturing in U.S. and Europe. The company is enhancing the advanced technologies like high-potency API (HPAPI), and continuous processing at multiple manufacturing sites.

CMOs with advanced manufacturing technologies like continuous flow manufacturing, cryogenic process, high containment facility and capabilities to produce controlled substances and HPAPI drugs will attract the pharmaceutical companies to outsource API and FDF manufacturing. For instance, in August 2018, Nemus Bioscience, Inc. signed an agreement with AMRI for the development and manufacturing of Nemus’ proprietary cannabinoid-based active pharmaceutical ingredients (API) which is a controlled substance.

Major players in the Pharmaceutical Contact Manufacturing global market include Aenova Holding GMBH (Germany), Cambrex Corporation (U.S.), Abbvie Contract Manufacturing (U.S.), Patheon N.V. (Thermo Fisher Scientific) (Netherlands), Albany Molecular Research Inc. (U.S.), Famar S. A. (Greece), Lonza Group Ltd. (Switzerland), GlaxoSmithKline (U.K.), Pfizer CentreOne (U.S.), Wuxi STA pharmaceutical Co., Ltd. (China), Almac (U.K.) and Recipharm AB (Sweden).

Reasons for buying this report:

  • Pharmaceutical contract manufacturing global market is expected grow at a CAGR of 6.7% from 2018 to 2025 to reach $95,904.9 million by 2025.
  • Identification and analysis of the pharmaceutical contract manufacturing market by identifying various segments by product (customer base and dosage form), phase, application, and geography.
  • Revenue forecast of the pharmaceutical contract manufacturing market and strategic analysis of each sub-segment with respect to segmental growth trends.
  • Identification of major market trends, Porter’s model, supply chain and factors driving and restraining pharmaceutical contract manufacturing market growth.
  • API average selling price (ASP), overall market share, company capabilities, acquisitions, collaboration, expansion, ANDA approval, patent expiry, API pricing, FDA approved manufacturing facility, drug master filing and company matrix tables.
  • Global pharmaceutical API production volume (In-house, contract manufacturing), cost of manufacturing facility and India v/s China pharmaceutical contract manufacturing market. 
  • Global pharmaceutical contract manufacturing, API contract manufacturing and FDF contract manufacturing market share analysis of major players.
  • Revenue forecast of the pharmaceutical contract manufacturing market with respect to North America (U.S., Rest of North America), Europe (Germany, France, Italy and Rest of Europe), Asia-pacific (China, India, Japan and Rest of Asia-Pacific) and Rest of the World (Brazil, Rest of Latin America, Middle East and Others).
  • Analysis of the opportunities for stakeholders by identifying the high-growth segments of the market.
  • Identification of key technology developments and innovations driving the market.
  • Profiles of major players in the pharmaceutical contract manufacturing market and analysis of their service offerings, financial revenue, business strategies, SWOTs and market shares.

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