Biopharmaceutical CMO Market Size, Share & COVID-19 Impact Analysis, By Service (Manufacturing {Upstream Processing and Downstream Processing}, Fill & Finish Operations, Analytical & QC Studies, and Packaging), and Regional Forecast, 2021-2028

The global biopharmaceutical CMO market size was USD 9.64 billion in 2020. The market is projected to grow from USD 11.56 billion in 2021 and is the market is expected to reach USD 26.49 billion in 2028 at a CAGR of 12.6% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a positive demand across all regions amid the pandemic. Based on our analysis, the global market witnessed a growth of 35.6% in the year 2020 as compared to the average year-on-year growth during 2017-2019. The sudden drop in CAGR is attributable to the market’s demand and growth returning to pre-pandemic levels once the pandemic is over.

Biopharmaceutical CMO, also known as a contract manufacturing organization, is a company that serves other companies in the biopharmaceutical sector on a contract basis to offer services ranging from drug manufacturing services to packaging. This allows major biopharmaceutical organizations to outsource their manufacturing operation, thus enabling them to focus on drug discovery and drug marketing. Several small biotechnology companies outsource their fill & finish manufacturing needs owing to the fact that they lack in their in-house production capacity and help reduce the need for capital expenditures.

One of the major factors supporting the biopharmaceutical CMO market growth is the robust pipeline of biologics. To maintain the demand, drug manufacturers have been burdened with high financial performance, especially when it comes to buying and operating expensive equipment for the mass production of biopharmaceuticals. To combat this, several companies have begun outsourcing their manufacturing to CMOs that are furnished with facilities, equipment, and labor force to carry out a more cost-effective mass production in their business models. Hence, growing number of biopharmaceutical pipeline offers lucrative growth opportunities for the business to flourish across the analysis timeframe.

Increasing Demand For COVID-19 Vaccines & Therapeutics to Support Revenue Growth Amid Pandemic   

COVID-19 pandemic has become a major health challenge across the globe. After it was first detected in China, the effects of the pandemic are being felt across the globe. The healthcare industry felt a significant impact on its revenue growth. However, the market witnessed a positive demand shock across the globe. The industry witnessed a significant growth of 35.6% from 2019 to 2020. Sudden rise in growth rate can be majorly attributable to the increasing number of biopharmaceutical contracts that has been allocated to the CMOs across 2019-2020. As the impact of COVID-19 surges, the biopharmaceutical industry is focusing on the development of effective and safe vaccines to prevent infection, while also developing and researching new therapies to treat those infected with the virus.

• For instance, as per the Verdict Media Limited, in terms of development of vaccines and therapies for COVID-19, there are currently more than 1,000 pipeline candidates. The Global Data Pharma Intelligence Centre data has demonstrated that in terms of public disclosure, more than 230 contract manufacturing agreements for COVID-19 vaccines and therapies have been made public.

The CMOs have been investing and acquiring facilities to be ready for high production units. This pandemic has proven to be an era for exponential growth in facility and bioprocessing units to have a larger output than before for increased and uninterrupted supply. One of the major initiatives adopted by the major biopharmaceutical CMOs include:

• In August 2021, Samsung Group announced that it will invest USD 205 billion in its biopharmaceuticals, semiconductor, and telecommunications units over the next three years to enhance its global presence.

Hence, the aforementioned factors are anticipated to support the tremendous surge in the growth rate of the industry.

LATEST TRENDS

Microbial Fermentation and Mammalian Cell Culture Outsourced Services to Gain Traction

One of the ongoing trends in the market is that the demand for mammalian cell culture and microbial fermentation outsourced services has witnessed a surge during 2018-2020. High demand for microbial fermentation and mammalian cell culture outsourced services is majorly due to the growing number of companies focusing on the development of biologics based on these processes such as recombinant proteins and monoclonal antibodies. Furthermore, robust number of biologics in the pipeline across several companies has further surged the demand for these services in terms of mammalian cell culture.

• For instance, as per Contract Pharma, industry demand for mammalian cell culture outsourced services has increased by approximately 10% from 2019. Also, capacity needs for mammalian cell culture has gone up by 20-30% in the last few years.

DRIVING FACTORS

Robust Pipeline of Biologics to Boost Demand for Biopharmaceutical CMO Services

This market will continue to grow as pharmaceutical and biotechnology companies increase their spending on outsourced contract development and manufacturing services. The biopharmaceutical contract manufacturing organizations market is anticipated to register a double-digit growth over the forecast period, with smaller CMOs expecting higher growth rates compared to larger CMOs. High growth is majorly due to the growing number of biologics pipelines that are anticipated to be launched during the forecast period. Increasing number of biopharmaceuticals in the pipeline will strongly boost the demand for outsourcing services.

For instance, as per the Pharma Intelligence, the U.S. Food and Drug Administration (U.S.FDA) had approved 64 new molecular entities and novel biologics in 2018. Additionally, increasing rate of mergers and acquisitions among the biopharmaceutical CMO business will further boost the revenue growth.

Enhanced Production Capacity for Biologics Production by Several Biopharmaceutical CMOs to Support Market Expansion

Increasing number of novel drug projects entering clinical pipelines and continuing growth of biopharmaceuticals is fueling the market growth rate. Owing to such factors, the contract manufacturing organizations are expanding both their capabilities and capacities. As per an article published by the Contract Pharma in 2019, over the next few years, total capacity will increase by 60% as many CMOs invest to meet future demand. For instance, in December 2015, Samsung Biologics announced plans to expand its production capacity by developing the largest biologics manufacturing plant both in terms of capacity (180,000 L) and production efficiency. The plant was set up in 2017 and began operation by the fourth quarter of 2018 after validation. Hence, increasing efforts by CMOs to enhance and expand its production capacity for biologics will significantly attract biopharmaceutical companies to outsoucre their operation pertaining to biologics development.

RESTRAINING FACTORS

High Cost of Setting up Production Facility Might Restrict Market Growth

The biopharmaceuticals CMO market is an intriguing market to invest in, looking at the profit margin of above 30% compared to the 5%-10% in the pharmaceutical CMO market. However, the high investment initially required for the development of manufacturing facilities and investments in additional equipment to start biomanufacturings at a higher pace are the prominent factors restricting the market growth up to certain extent.

SEGMENTATION

By Service Analysis

Increasing Number of Contract Manufacturing Projects to Lead to Manufacturing Segment’s Dominance in Forecast Period

The manufacturing segment held the highest market share in 2020, and will witness lucrative growth across the forecast period. High growth rate of the segment is majorly due to increasing rate of contract manufacturing projects being awarded to the CMOs across the globe for efficient manufacturing of biologics.

For instance, Novartis announced that it has signed an initial contract manufacturing agreement to support the production of the Pfizer-BioNTech COVID-19 vaccine. This agreement will lead Novartis to use its aseptic manufacturing facilities in Stein, Switzerland to support the production of the COVID-19 vaccine.

The manufacturing segment is further sub-classified into upstream processing and downstream processing. The downstream processing segment is anticipated to hold highest market share across the forecast period. Downstream processing is a complex operation, which requires cutting edge technology based equipment. Now, there are several small scale biotechnology companies that lack in-house manufacturing facilities. Hence, to continue production of biologics via downstream processing, these companies tend to outsource their operations to the CMOs.

On the other hand, the fill & finish operations segment will witness considerable growth during the forecast period. Growing number of launches pertaining to biologics simultaneously increases the demand for fill & finish services as well. Moreover, increasing initiatives by CMOs to enhance their fill & finish operations has further surged the segmental growth.

For instance, in September 2021, ADMA Biologics, Inc., an end-to-end commercial biopharmaceutical company dedicated to specialty plasma derived biologics, announced that the U.S. Food and Drug Administration has granted approval for the company’s aseptic fill & finish machine, the VanRx SA25, for enhanced fill & finish operations.

REGIONAL INSIGHTS

This industry in North America held dominant share in 2020 with a valuation of USD 3.78 billion. The regional market will witness significant growth due to the presence of high number of CMO manufacturing facilities across the region coupled with multiple number of small scale CMOs entering the U.S. market.

For instance, as per the BioProcess International, there were around 218 biopharmaceutical CMO facilities across the U.S. between 2018 and 2019.

However, the manufacturing capacity of CMOs in the U.S. is comparatively lower than Europe. Europe comprised significant market share in 2020, which is quite close to North America as the manufacturing capacity of biopharmaceutical CMOs in Europe is comparatively very high.  

• For instance, as per BioProcess International, Europe comprises 37.0% of global CMO capacity, followed by North America with 35.0%.

Meanwhile, the market in Asia Pacific is poised to witness lucrative growth across the analysis timeframe. Robust growth of the region is majorly due to increasing number of CMOs opening manufacturing plants across Asian countries such as India, China, and South-east Asia.

Latin America and Middle East & Africa held minimal market share in 2020 owing to comparatively less exposure of biopharmaceutical CMOs.

KEY INDUSTRY PLAYERS

Lonza & Samsung Biologics Held the Highest Share in Global Market

Lonza is the leader in the global market, followed by Boehringer Ingelheim, Samsung Biologics, and Catalent, Inc. High shares of Lonza is due to its strong distribution network across the globe. Also, the company is focused on investments to expand its production capacity as well as novel technologies.

List of Key Companies Profiled:

• Samsung Biologics (Incheon, Republic of Korea)


• Recipharm AB (Stockholm, Sweden)


• WuXi Biologics (Wuxi, China)


• FUJIFILM (FUJIFILM Diosynth Biotechnologies (Tokyo, Japan)


• Lonza (New Jersey, U.S.)


• Thermo Fisher Scientific Inc. (Patheon) (Waltham, U.S.)


• Cambrex Corporation (New Jersey, U.S.)


• Catalent, Inc (New Jersey, U.S.)


• Siegfried Holding AG (Zofingen, Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• April 2021- Thermo Fisher Scientific announced to acquire PPD, Inc., a leading global provider of pharmaceutical manufacturing and clinical research services to the biotech industry. This would strengthen their market position by increasing their production capability and customer base.


• May 2021- Samsung Biologics, one of the leading CMOs, and Moderna Inc. announced to sign an agreement to offer fill & finish services to Moderna’s COVID-19 Vaccine.


• April 2020- Recipharm announced the acquisition of Consort Medical to expand its manufacturing plant and to further strengthen its place in this market.

REPORT COVERAGE

The global biopharmaceutical CMO market research report provides a detailed analysis of the industry. It focuses on key aspects such as major companies, service type, capacity based analysis, CMO facilities per region, and few others. Additionally, it offers insights into the market trends and impact of COVID-19. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation