Healthcare cmo market

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.

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:

• Among Service segment, the Pharmaceutical Contract Manufacturing Services held dominant position in the market and accounted for 60.0% share in the global healthcare CDMO market in 2020. The segment is expected to reach US$ 583.4 million in 2028.
• Heavy investment in R&D by pharmaceutical companies, recent manufacturing & development contracts awarded by pharmaceutical companies to CDMO, and new drug developments in recent years are some of the major driving factors responsible for the growth of Pharmaceutical Contract Manufacturing Services segment during the forecast period

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.