The global contract development and manufacturing organization (CDMO) market is currently experiencing a constant growth and increasing interest in the healthcare world.
The rise of CDMOs is a key aspect of the pharmaceutical industry's evolution over the past decades, where two-thirds of pharmaceutical manufacturing is outsourced.
However, despite the wealth of information publicly available, it can be difficult to extrapolate the data required to make informed decisions about outsourced manufacturing, or investments in this sector. To meet this need address we at Advitech have decided to conduct the first benchmarking study on API CDMOs, starting by a baseline analysis according to 2016 data.
The work is structured in two parts: one with an evaluation of the reference market value of drug substances produced by CDMOs. In fact, while the market value of finished dosage forms (FDFs) manufactured by CDMOs can be relatively easily assessed, values for APIs are not as visible. Therefore, to obtain an estimated value of the market pertaining to the subsequent benchmarking study, we performed a series of extrapolations from a range of publicly available and published data. The analysis provides an insight, placing an actual figure on the global market for drug substance APIs.
The second part is a benchmarking study where 27 companies were chosen due to their well-established role as contract manufacturers and small molecule API capabilities. The selected companies were mainly headquartered in Europe or in the US, although two best-in-class companies in Asia were also included to provide additional perspective.
These 27 companies were then compared and contrasted using a vast pool of publicly-available information as the data source, 50 unique benchmarking tools were employed to analyse quantitative and qualitative features in the following categories:
The findings of these analyses revealed a diverse pattern of business models and capabilities across the spectrum considered. The companies included in the study differed in their backgrounds, ownership structures, sizes and business strategies.
Some of them combined drug substance and drug product capabilities, with capacity ranging from early phases to large scale commercial production, while others combined drug substance capabilities for third parties products with their own proprietary business strategy.
The total annual turnover of the 27 companies in the study exceeded $13.2 billion, and the report revealed a number of interesting patterns between turnover, profitability, business models and measures of company efficiencies.
Comparing the different figures and features of the 27 companies, it was possible to highlight opportunities that still exist in the CDMO sector for companies wishing to differentiate themselves.
This 2016 baseline analysis should be useful for pharmaceutical clients wanting to ascertain which CDMO will bring most added value to an outsourcing partnership, CDMOs wanting to know how they compare with their peers, and investors needing to know how one specific company compares to another.