Small Molecules Contract Development And Manufacturing Organization Market Size (2024 - 2029)

Small Molecules Contract Development And Manufacturing Organization Market Analysis

The Small Molecules Contract Development And Manufacturing Organization Market size is estimated at USD 180.52 billion in 2024, and is expected to reach USD 273.70 billion by 2029, growing at a CAGR of 7.27% during the forecast period (2024-2029).

The COVID-19 pandemic significantly impacted the growth of the small molecule CDMO market. Research groups worldwide implemented various strategies to identify small-molecule drugs to treat COVID-19. For instance, according to the article published in the Nature Journal in April 2022, the SARS-CoV2 3CL protease was identified as a critical drug target for small molecule COVID-19 therapy, given its efficacy and essentiality in the viral maturation and replication cycle. The emergence of such active small molecules for the treatment of COVID-19 significantly contributed to the market's growth. Moreover, pharmaceutical companies were continuously engaged in drug development and collaborated with various CDMOs to manufacture COVID-19 therapeutic products. For instance, in March 2023, Samsung Biologics (CDMO) signed on to manufacture COVID-19 vaccines for Moderna. Hence, the small molecule contract development and manufacturing organization market witnessed growth during the pandemic.

The major factors driving the market's growth are increasing pharmaceutical and biotechnology R&D investment, growing demand for small molecules, and rising incidence of chronic diseases.

Small molecule drugs have more demand since they are way more affordable than biological drugs. They have continuously helped to advance medicine and address unmet medical needs. One of the primary factors responsible for the rise in demand for small-molecule medicines is an increase in regulatory approvals. For instance, in December 2022, the FDA's CDER approved 20 new small molecule drugs, or 63% of the total 32 new drugs approved thus far in 2022. Thus, increasing regulatory approval for small molecules is boosting the demand for small molecule development and manufacturing services and is contributing to the market's growth.

The increasing number of small molecules in the pipeline on expedited regulatory pathways being developed by small and emerging pharma companies and a trend toward greater complexity of chemical structures are contributing to the market's growth. Small molecules are likely to continue to represent the majority of prescribed drugs in the coming years, driving the growth of the CDMO market. Accelerating advancement in research and technology is generating opportunities for biopharmaceutical companies to develop innovative small-molecule drugs. Hence, considering the dominance of this type of medicine on the market, around one-third of the CMOs offer commercial-scale small molecule API as well as advanced intermediates manufacturing, compared to 20% that provide biologic API manufacturing.

Besides, the increasing complexity associated with small molecules also contributes to the market's growth. According to Lonza, the complexity of chemical synthesis has almost doubled from eight chemical steps to an average of 14 in 2021. The development of complex generics in an era of increasing costs and increased focus on global developments and manufacturing operations requires a higher level of expertise. It demands more in-depth planning and a deep understanding of the regulatory, quality, and clinical aspects of small molecule development to bring these drugs to the market. Hence, this is likely to create demand for small molecule CDMO services, thereby contributing to the market's growth over the forecast period.

Furthermore, strategic initiatives taken by market players, such as expansion of services portfolios, mergers, collaboration, and partnerships, are likely to increase demand for these services. This is anticipated to boost the demand for small molecules CDMO services over the forecast period. For instance:

• In March 2023, Catalent and Grünenthal announced their successful formulation design and clinical-phase manufacturing collaboration for an orally dosed small molecule in Grünenthal's pipeline.
• In September 2022, Cambrex announced the completion of the first phase of its USD 30 million investment in its small molecule active pharmaceutical ingredient (API) manufacturing facility in High Point, North Carolina.
• In June 2022, Lonza inaugurated a new clinical phase development and manufacturing facility in its small molecules site in Bend, Oregon. It produces bioavailability-enhancing spray-dried dispersion (SDD) finished dosage forms and drug product intermediates.

Hence, increasing demand for small molecule therapeutics, growing R&D investment for the same, and increasing complexity associated with the manufacturing of small molecules are expected to boost the market over the forecast period. However, stringent government regulations and compliance issues with outsourcing are anticipated to restrain the market over the forecast period.

Small Molecules Contract Development And Manufacturing Organization Industry Segmentation

As per the scope of the report, a contract development and manufacturing organization (CDMO) is an organization that provides clients with comprehensive services from drug development through manufacture. In the small molecule manufacturing sector, CDMOs provide expert development and manufacturing services and are now an essential part of the pharmaceutical industry's value chain. 

The small molecule contract development and manufacturing organization market is segmented by product (small molecule API, small molecule drug product (oral solid dose, semi-solid dose, liquid dose, and other small molecule drug products), stage type (preclinical, clinical (phase I, phase II, phase III, and phase IV), and commercial), end user (pharmaceutical and biotechnology companies, research institutes and academics), therapeutic area (cardiovascular diseases, oncology, respiratory disorders, neurology, metabolic disorders, infectious diseases, and other therapeutic areas), and geography (North America, Europe, Asia-Pacific, Middle East and Africa, and South America). The report also covers the estimated market sizes and trends for 17 countries across major regions globally. The report offers the market size in value terms in USD for all the abovementioned segments.