Contract Manufacturing Organization (CMO) Market Size, Share & Industry Analysis, By Type (API Manufacturing, Finished Dosage Form Manufacturing (Solid Dosage Forms, Injectables, and Others), and Packaging), and Regional Forecast, 2019-2026

The global Contract Manufacturing Organization(CMO) market size was valued at USD 92.42 billion in 2018 and is projected to reach USD 188.07 billion by 2026, exhibiting a CAGR of 9.4% during the forecast period.

Contract Manufacturing Organization provide highly valuable services to the expanding pharmaceutical industry. Increasing demand for pharmaceutical products for the treatment of various diseases and shortages of lifesaving medicines has resulted in the growing demand for outsourcing of the manufacturing operations. CMOs follow all the regulations, have highly skilled man-power, presence of state of the art manufacturing facilities, and cost -effective service portfolio. Growing competition in the pharmaceutical sector has resulted in the utmost need of launching products as early as possible to capture pioneering position of the market. Thus, increasing need to launch products earlier, growing pricing pressure, and benefits provided by CMO’s such as reduced timelines and high quality products in low cost are some of the major drivers of the market.

MARKET TRENDS

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Consolidation Wave of Pharmaceutical Contract Manufacturing Organization Still Continue

The Contract Manufacturing Organization market is highly fragmented market with presence of large number of service providers with manufacturing capacities spread across various dosage forms. However, a wave of strategic collaborations, mergers, acquisitions, and partnerships has been witnessed in these years. This is aimed by market giants to use manufacturing capabilities and expertise of locally established players to increase market share. The notable deals in contract manufacturing sector include acquisition of injectable manufacturing capabilities of Hospira Inc. in the year 2015. Moreover, a global leader in the CMO space, ‘Lonza Group AG’ acquired Capsugel S.A, in December 2016 with the aim to address needs of customers for integrated and value added solutions.

MARKET DRIVERS

Strong Growth in the Biologics Market to Mirror CMO Market Growth

With increasing prevalence of chronic diseases, the global demand for effective therapies has been on its peak. Rise in the investments in development of complex biologic molecules has created a huge need for highly proficient service providers able to deliver products with desired regulatory standards. The biologic molecules are complex and the manufacturing requires strong skills and approved manufacturing facilities. The Contract Manufacturing Organization in the market are upgrading their capabilities to serve the global need. Thus, more and more biological products are being outsourced for manufacturing and packaging activities. Expansion of the production capacities by the leading CROs from emerging nations is expected to uplift the pharmaceutical Contract Manufacturing Organization(CMO) market revenue by 2026.

Emergence of More CMOs with Expanded Manufacturing Capacities to Boost the Market

In order to address increasing demand for outsourcing, several new companies are entering the market with advanced manufacturing solutions. This is making the pharmaceutical players to believe in their technical capabilities and outsource their production to these service providers. Mid-sized or even small pharmaceutical companies now are likely to be engaged with one or more CMOs operating in the field. Thus, increasing number of Contract Manufacturing Organization entering into the space will create lucrative opportunity to promote outsourcing of the pharmaceutical activities in the near future.

MARKET RESTRAINT

Stringent Regulations and Capacity Utilization Issues to Hamper CMOs Profits

Despite growing demand for the pharmaceutical outsourcing of the products, stringent regulations pose limitations for Contract Manufacturing Organization to gain business deals. The Contract Manufacturing Organization needs to be approved by   concerned regulatory bodies and to maintain the similar standards throughout the contract period. Stringency of the regulations limits the players to offer services for respective geographic location for instance, in the U.S. The USFDA standards for approval and regular QC are known to be most stringent among others across globe.

SEGMENTATION

By Type Analysis

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API Manufacturing Segment to Hold Dominating Share of CMO Market

Based on type, the CMO market is segmented into API manufacturing; finish product manufacturing, and packaging. The API segment dominated the CMO market in 2018. Growing demand for biologic molecules contribute to high share of the API segment. About 60% of the highly potent API i.e. HPAPI are indicated for the treatment of cancer. Growing prevalence of cancer and high demand for novel therapies are estimated to propel the API manufacturing segment growth throughout the forecast period. However, the finished formulation manufacturing segment is projected to expand at highest CAGR owing to growing outsourcing of injectable formulations witnessed in recent years. The finished formulation segment is further categorized into solid dosage forms, injectables, and others (semisolids, powders, oral liquids, and others). Among them, the injectable sub-segment is likely to dominate the finished formulations sub-segment by 2026.

REGIONAL ANALYSIS

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The contract manufacturing organization market size in North America stood at USD 32.60 billion in 2018. The market in the region is characterized by higher prevalence and diagnosis rates for lifestyle diseases, high investments in research and development, presence of large number of CMOs, and large number of companies involved in the development of biologic molecules. Europe is the second largest market due to rising incidence of various types of cancer and metabolic diseases requiring advanced therapies, presence of large number of Contract Manufacturing Organization in the region. For instance, according to the GLOBOCAN 2018, around 4,229,662 new cancer cases were reported in Europe. The market in Asia Pacific is projected to register a comparatively high CAGR during the forecast period. Increasing number of Contract Manufacturing Organization getting regulatory certifications from the western authorities, presence of skilled manpower, low cost of manufacturing, and high quality of products being manufactured are major factors projected to drive the Asia Pacific CMO market growth during the forecast period. The market in Latin America and the Middle East & Africa are currently in a nascent stage. However, the developing healthcare infrastructure in these regions and underlying development of regulatory standards in the countries such as Brazil, Mexico, Peru, and South Africa will boost the Contract Manufacturing Organization market growth during the forecast period in these regions.

KEY INDUSTRY PLAYERS

Services Offered at Competitive Pricing, Streamlined Business Relationships, and Improved Service Qualities to Drive the Demand

The competitive landscape of pharmaceutical Contract Manufacturing Organization (CMO) market indicates currently the market is highly fragmented. However, a strong emphasis on partnerships and acquisition strategies is likely to help boost Contract Manufacturing Organization (CMO) market revenue growth in the forthcoming years. The consolidation of the market has been observed as key trend of the market.

LIST OF KEY COMPANIES PROFILED:

• Catalent Inc.


• Recipharm AB


• Jubilant Life Science Ltd


• Lonza Group AG


• Boehringer Ingelheim International GmbH


• Vetter Pharma-Fertigung GmbH & Co. KG


• FAMAR Health Care Services


• Dr. Reddy’s Laboratories Ltd. 


• Almac Group


• Other prominent players

KEY INDUSTRY DEVELOPMENTS:

• In July 2021, Catalent, Inc. announced that they will start their USD 100.0 million multi-phase expansion plan for their Italian manufacturing facility. This expansion will help the company increase their biologics manufacturing capabilities in the European region.


• In July 2021, Catalent, Inc. announced that they launched GPEx Lightning, a next-generation cell line development technology. This new technology launch would help the company shorten their drug substance development by a timeline of 3 month.


• In April 2021, Lonza announced that they expanded their solid form selection services at their U.S. site. This expansion will help enhance the company’s capabilities in meeting accelerated timelines.


• In December 2020, Lonza announced that they have expanded their collaboration with Aurinia Pharmaceuticals to expand a manufacturing capacity for an efficient production and manufacturing of Voclosporin

REPORT COVERAGE

An Infographic Representation of Contract Manufacturing Organization (CMO) Market

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The contract manufacturing organization (CMO) market report provides a detailed analysis of the market and focuses on key aspects such as leading companies and service types. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over the recent years.

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Report Scope & Segmentation