Market Trends of Healthcare CDMO Industry
Small Molecule Segment Expected to Hold Significant Market Share Over the Forecast Period
CDMOs play a crucial role in the small molecule development and manufacturing process. They provide specialized services to pharmaceutical and biotechnology companies needing more infrastructure, expertise, or capacity to carry out these activities in-house.
The global burden of chronic diseases has significantly increased in recent years, increasing the demand for small-molecule drugs and research. Hence, the companies in the market are investing heavily in identifying and discovering novel small molecules with potential therapeutic applications, fueling the demand for small molecule development and manufacturing services and thereby boosting growth in the market. For instance, in May 2023, Global Healthcare Opportunities, or GHO Capital Partners LLP, invested in Sterling Pharma Solutions (a CDMO), a pharmaceutical development and manufacturing organization. The new investment will likely support Sterling's growth trajectory in strengthening production capacity across Europe, the United Kingdom, and the United States.
In addition to the investments, pharmaceutical companies are teaming up with small molecule drug development and manufacturing service providers to accelerate their drug development activity by utilizing the advanced technologies or resources available at the CDMOs. For instance, in March 2023, CatSci Ltd announced a new partnership with AGC Pharma Chemicals, a global small molecule CDMO. This will enable CatSci's customers to harness AGC's expertise in GMP manufacturing from kilos to tonnes to support clinical phase projects.
Hence, increasing investment in developing small molecule drug compounds and strategic activities undertaken by the market players is expected to boost the segment growth over the forecast period.
North America is Expected to Hold a Significant Market Share Over the Forecast Period
In North America, the healthcare CDMO market is expected to grow owing to factors such as established research facilities and high investment in R&D advanced products. Furthermore, the strong foothold of key market players and rising grants by the National Institute of Health for developing novel therapeutics in the region are also aiding the market growth. Rapid growth in medical device manufacturing and the adoption of CDMO services are also major factors contributing to market growth in North America.
The increasing burden of cancer in the United States encourages development and manufacturing activities, and increasing pharmaceutical consumption is expected to propel the market growth. For instance, according to the American Cancer Society Cancer Statistics 2023, 1.9 million new cancer cases are predicted to be diagnosed in the United States in 2023. Out of all the cancer cases, breast cancer is estimated to account for 0.3 million new cases. Similarly, leukemia is expected to account for 59.6 thousand new cases, and lymphoma around 89.3 thousand new cases in the United States in 2023. Hence, the rising incidence of cancer in the nation is predicted to raise the need for novel therapies, which would ultimately lead to a growth in R&D activities and CDMO services for the development of new drugs, thereby boosting the market growth over the forecast period.
Further, the development of CDMO organizations in the country that provide drug development and manufacturing services is likely to propel the growth of the market. For instance, in March 2022, Acanthus Research Inc. announced the launch of Acanthus Pharma Services Inc., a rapidly expanding CDMO organization focusing on providing services to the pharmaceutical and biotechnology industry. The company offers organic synthesis services such as specialty chemicals and organic chemistry services.
Further, strategic activities by the market players, such as mergers & acquisition partnerships and collaboration, are expected to propel the market's growth. For instance, in May 2023, Moderna, Inc., entered into a long-term agreement with Ontario-based Novocol Pharma, a sterile injectable CDMO, to perform aseptic fill-finish, labeling, and packaging of mRNA respiratory vaccines expected to be produced in Canada.
Hence, increasing demand for outsourcing, growing consumption, increasing investment in R&D, and strategic activities by the market players are expected to boost the market over the forecast period.
