Outsourced Pharmaceutical Manufacturing 2020

Kevin Bottomley, Achim Newrzella

Outsourced Pharmaceutical Manufacturing 2020: Current Trends & Future Prospects

In our latest analysis of the commercial and clinical contract manufacturing market, we predict the sector to grow at a CAGR of 6.8% to c. $117bn in 2023, with certain sub-sectors such as viral vector and pre-filled syringe manufacturing achieving significant double-digit growth.

The Contract Development and Manufacturing Organisation (CDMO) sector continues to increase its market penetration through increasing outsourcing by biopharma companies and growth ahead of the underlying pharmaceutical market. We thus view the sector in a strong position to deliver on significant future value creation, which is underlined by record valuations both in the M&A and public markets.

CDMOs provide highly valuable services to the pharmaceutical and biotech industry by offering additional development and manufacturing capacity, access to specialty capabilities and potential cost advantages over in-house manufacturing. The CDMO industry provides a broad set of services such as product development and characterisation, clinical and commercial manufacturing of API and drug products including final packaging, as well as a range of ancillary services such as clinical logistics and distribution, CMC (chemistry, manufacturing and controls) and regulatory support.

Over the past couple of decades, there has been a significant trend among pharma companies to increase the amount of discovery, development and manufacturing work that they outsource, as it can be an effective way of reducing capital costs, and gaining access to capacity and capabilities that are not available in-house. CDMOs have consequently invested heavily in the expansion of capacity and capabilities through organic growth and M&A in order to fulfil growing client demands.

In our updated whitepaper on the outsourced manufacturing sector for 2020, we assess the size and growth of the CDMO market and its sub-sectors, discuss important current trends and look to the future of deal making within the industry.