The demand for generic products is high in the pharmaceutical market. Moreover, majority of healthcare companies are gradually outsourcing manufacturing activities to contract manufacturing organizations (CMOs).
The global healthcare CMO market is estimated to be valued at US$ 326.8 million in 2021 and is expected to exhibit a CAGR of 16.1 % over the forecast period (2021-2028).
Recent Developments:
On June 18, 2021, Danaher has signed an agreement to acquire US-based CDMO Company Aldevron from EQT Private Equity for an enterprise value of nearly US$ 9.6 Bn in cash.
On February 17, 2021, Charles River Laboratories International, Inc. has signed a definitive agreement to acquire Cognate BioServices, Inc. which is a premier, cell and gene therapy contract development and manufacturing organization (CDMO). This deal is expected to complete for around US$ 875 million in cash
In January 2020, Discovery Labs and Deerfield Management Company have formed The Center for Breakthrough Medicines, a Contract Development and Manufacturing Organization (CDMO) and specialty investment company, to alleviate the critical lack of capacity that is preventing patients from accessing critically needed cell and gene therapies.
North America held dominant position in the global healthcare CMO market in 2020, accounting for 32.6% share in terms of value, followed by Europe and Asia Pacific, respectively. Dominance of North America healthcare CDMO market in 2020 can be attributed to recent acquisitions in the region, increasing demand for medical devices in the region, and presence of advanced medical infrastructure.
Figure 1. Global Healthcare CMO Market Value (US$ Mn), by Region, 2020
Global Healthcare CMO Market: Drivers
Patent expirations of drugs is expected to propel growth of the global healthcare CMO market over the forecast period. For instance, Eli Lilly and Company’s drug, Cialis used for treatment of erectile dysfunction, lost patent protection in September 2018 and patent for YAZ (drospirenone/ethinylestradiol), which provides an oral contraceptive regimen, is set to expire in 2021.
Moreover, increasing cost of drug development is also expected to aid in growth of the market. For instance, the cost of drug development was US$ 2.6 billion, which included average out-of-pocket costs of US$ 1.4 billion and time costs of US$ 1.2 billion, according to a study by the Tufts Center for the Study of Drug Development published in the Journal of Health Economics in May 2019.
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2020 | Market Size in 2021: | US$ 326.8 Mn |
| Historical Data for: | 2017 to 2020 | Forecast Period: | 2021 to 2028 |
| Forecast Period 2021 to 2028 CAGR: | 16.1% | 2028 Value Projection: | US$ 928.8 Mn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Accellent, Inc., Boehringer Ingelheim GmbH, Catalent Pharma Solutions, Inc., DSM, Fareva, Greatbatch, Inc., Lonza Group, Patheon, Inc. (Thermo Fisher Scientific Inc.), Piramal Healthcare, Binex, Cytovance Biologics, Emergent BioSolutions Inc., MilliporeSigma, Symbiosis Pharmaceutical Services, Albany Molecular Research Inc., Samsung Biologics, and Symmetry Medical, Inc. |
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| Growth Drivers: |
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| Restraints & Challenges: |
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Global Healthcare CMO Market: Opportunities
Increasing investment in the pharmaceutical sector is expected to offer lucrative growth opportunities for players in the global healthcare CMO market. For instance, according to The European Federation of Pharmaceutical Industries and Associations’ Key Data 2019, the pharmaceutical sector in Europe invested US$ 19, 509 million in 2000, which increased to US$ 39,895 million (est.) in 2018.
Moreover, R&D efforts for vaccine against Covid-19 is also expected to aid in growth of the market.
Market Trends
Major players in the market are focused on adopting partnership strategies to enhance their market share. For instance, in July 2020, Emergent BioSolutions Inc. signed a five-year agreement with Johnson & Johnson to manufacture its Covid-19 vaccine candidate.
Major players in the market are also focused on expanding their production capacity. For instance, in May 2020, Thermo Fisher Scientific Inc. announced US$ 180 million project to more than double the company’s commercial viral vector capacity to support increasing demand for the development and manufacture of gene therapies and vaccines.
Figure 2. Global Healthcare CMO Market Share, By Service, 2020
Key Takeaways of the Graph:
Global Healthcare CMO Market: Restraints
Strategic outsourcing of manufacturing practices brings along risks such as concerns about quality of products, intellectual property loss and non-compliance of regulatory requirements. Thus, quality concerns and non-compliance of regulatory requirements is expected to hamper growth of the market.
Moreover, varying regulatory scenarios around the world is also expected to limit the market growth.
Global Healthcare CMO Market: Competitive Landscape
Major players operating in the global healthcare CMO market include, Accellent, Inc., Boehringer Ingelheim GmbH, Catalent Pharma Solutions, Inc., DSM, Fareva, Greatbatch, Inc., Lonza Group, Patheon, Inc. (Thermo Fisher Scientific Inc.), Piramal Healthcare, Binex, Cytovance Biologics, Emergent BioSolutions Inc., MilliporeSigma, Symbiosis Pharmaceutical Services, Albany Molecular Research Inc., Samsung Biologics, and Symmetry Medical, Inc.
Global Healthcare CMO Market: Key Developments
Major players in the market are focused on adopting partnership strategies to enhance their market share. For instance, in June 2020, Symbiosis Pharmaceutical Services signed a supply agreement with AstraZeneca for sterile manufacture of the COVID-19 recombinant adenovirus vaccine known as AZD1222 for AstraZeneca sponsored clinical trials.
Similarly, in May 2020, Thermo Fisher Scientific Inc. partnered with CSL Limited, a biotechnology company, to help meet the growing demand for biologic therapies while also accelerating CSL's broader manufacturing objectives.
A contract manufacturing organization, also known as a contract manufacturing and development organization, is an organization that serves pharmaceutical companies on a contract basis to offer comprehensive services from invention through commercialization to provide pharmaceuticals for healthcare. The primary function of these organizations is to provide the pharmaceutical and biotechnology industries with products that are designed, developed and manufactured under contract. Contract manufacturers usually build their business in close association with the pharmaceutical and bio-tech groups. As a result of this close relationship, these organizations can offer the same quality and quantity of products that would be available through the licensed facility. There are a number of advantages to contract manufacturing from a contract manufacturer.
Market Dynamics:
Increasing investment in R&D of drugs is expected to propel growth of the global healthcare CMO market over the forecast period. For instance, in September 2021, Aragen Life Sciences announced its plans to invest in expanding infrastructure in Hyderabad and Bengaluru (India) for drug discovery, and building a new facility in the U.S to manufacture biologics. Similarly, in August 2021, Curia announced plans to expand its commercial manufacturing capacity at its Rensselaer, NY facility.
Key features of the study:
Detailed Segmentation:
“*” marked represents similar segmentation in other categories in the respective section.
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