Pharmaceutical CDMO Market Size, Share & Trends Analysis Report By Product (API, Drug Product), By Workflow (Clinical, Commercial), By Application (Oncology, Infectious Diseases, Neurological Disorders), By Region, And Segment Forecasts, 2024 - 2030

Pharmaceutical CDMO Market Size & Trends

The global pharmaceutical CDMO market size was estimated at USD 146.0 billion in 2023 and is projected to grow at a CAGR of 7.2% from 2024 to 2030. Market growth can be attributed to the rising investments by CDMOs to expand new drug development and increasing demand for novel therapies. In addition, rising pharmaceutical Research & Development investments, the demand for genetic drugs, prevalence of cancer & age-related disorders, and the rising need for advanced therapeutics are key factors driving market growth.

In addition, market growth of biosimilars, biologics, personalized medicine, orphan drugs, companion diagnostics, and adaptive trial designs, among others, is anticipated to boost the demand for pharmaceutical CDMO. As companies explore new frontiers, the escalating requirement to adhere to regulations drives increased demand for specialized service providers proficient in contract development and manufacturing affairs.

Furthermore, key initiatives undertaken by the companies in this sector are also expected to boost market growth. In January 2022, Lonza partnered with HaemaLogiX-a developer of monoclonal antibodies-to manufacture myeloma drug candidate KappaMab monoclonal antibody. In December 2023, Innovent Biologics, Inc. extended its licensing deal with Synaffix B.V., a part of Lonza dedicated to advancing its clinical-stage platform technology for creating ADCs characterized by a best-in-class therapeutic index. Such biopharmaceutical initiatives are expected to accelerate the market growth of pharmaceutical contract development and manufacturing and services.

Furthermore, in many pharmaceutical companies, innovations, and speed-to-clinic factors are of critical importance. Small companies and specialty pharmaceutical players increasingly depend on third-party service providers to meet crucial industry requirements. Numerous CROs and CDMOs are comprehensive solution providers following a one-stop-shop service model. In this model, a CRO manages everything from API development to dosage form development, covering early development stages to commercialization. To deliver such services effectively, a CDMO needs a diverse array of enabling technologies & specialized handling capabilities tailored to address specific challenges. While these services tackle numerous problem statements, there exists considerable variability in product design capabilities among different CDMO players, which can be pivotal in scaling a product concept and bringing it to market.

Moreover, the extensive range & proficiency of a CDMO's skills across various technology types empower it to address the requirements of diverse customers. There is a growing willingness among customers to invest more in top-notch, consistently dependable CDMO services. Particularly, major pharmaceutical players are keen to reduce supplier interactions to integrate multiple processes throughout the value chain seamlessly. This encourages CDMOs to offer comprehensive solutions, enabling clients to manage operations cohesively & effortlessly.

Market Concentration & Characteristics

Market growth stage is stable and is expected to accelerate over the estimated period. The market is characterized by technologies, regulatory considerations, and globalization & outsourcing of Product processes to influence advantages and specialized capabilities.

The design and development of products have observed significant advancements collectively aiming to achieve high-quality products driving innovation in this field in terms of technology & manufacturing capabilities, thereby offering commercial opportunities for market expansion

The pandemic has led to regulatory changes, such as the FDA's Emergency Use Authorization (EUA) process, which has accelerated approval of COVID-19 vaccines and therapies. In addition, compliance standards and industry guidelines drive market growth.

The market leverage strategies such as collaborations, partnerships, and acquisitions to promote the reach of their offerings and increase their product capabilities globally. For instance, in January 2023, Sterling Pharma Solutions confirmed the finalization of its acquisition of an Active Pharmaceutical Ingredient (API) manufacturing facility in Ringaskiddy, Ireland, from Novartis. This transaction, originally disclosed in March 2022, encompasses an ongoing supply agreement with Novartis to persist in producing several APIs.

Increasing R&D activities, rising number of mergers & acquisitions, & growing disease burden can influence market dynamics positively.

The rising number of ongoing clinical studies, technologically advanced formulation development, and rising demand for generics & biologics products fuels market growth.

Application Insights

Based on application, the oncology segment led the market with the largest revenue share of 21.82% in 2023 and is expected to grow at the fastest CAGR of 8.1% during the forecast period. The market is segregated into oncology, infectious diseases, neurological disorders, cardiovascular diseases, metabolic disorders, autoimmune diseases, respiratory diseases, ophthalmology, gastrointestinal disorders, hormonal disorders, hematological disorders, and others. Oncology is further sub-segmented into small molecules and biologics. Growth in the segment can be attributed to the increasing prevalence of cancer, growing demand for innovative & effective treatments, and favorable regulatory pathways. In addition, advancements in personalized medicine & targeted therapies have revolutionized cancer treatment, offering higher efficacy and fewer adverse effects. These factors are expected to create new possibilities for collaborations between pharmaceutical companies and CDMOs for innovative products targeting diseases. Further, high R&D investment in advanced therapeutics such as monoclonal antibodies, ADC, and several other biopharmaceuticals to minimize cancer disease burden is predicted to boost segmental revenue growth.

In addition, the infectious diseases market has witnessed dynamic trends and scenarios across various disease segments. The rising incidence of severe diseases, such as hepatitis, cholera, measles, chickenpox, and typhoid, has resulted in considerable market growth of the infectious diseases, owing to a steep increase in the demand for immunization against these diseases. In addition, pharmaceutical CDMOs focus on discovering, researching, and developing new drugs & therapies. Nevertheless, several molecular entities targeting immunization against fatal diseases, such as hepatitis C, leishmaniasis, paratyphoid fever, AIDS, Ebola, norovirus, and Chagas disease, are under development and research stages. Hence, the growing prevalence of such diseases creates the need for new drugs, which fuels the market growth.

Product Insights

Based on product, the active pharmaceutical ingredient (API) segment led the market with the largest revenue share of 81.20% in 2023. The market is segregated into API, and drug product. The active pharmaceutical ingredient (API) is further sub-segmented into type, synthesis, drug, and manufacturing. Market growth in this segment can be attributed to diverse formulations, accelerated demand for manufacturing processes, customer preference, and global acceptance. Moreover, increasing CDMOs focusing on new drug formulations is another factor propelling segment growth.

The API pharmaceutical CDMO segment is sub-segmented by type into traditional APIs, Highly Potent-API (HP-API), and biologics/large molecules. Traditional APIs use sophisticated R&D and commercial production phases. The traditional APIs segment is projected to grow at a CAGR of 5.2% during the forecast period due to rising R&D activities, growing cases of chronic diseases, increasing adoption of generics, and surging uptake of conventional active ingredients, such as small molecules. The synthesis segment is bifurcated into synthetic (solid & liquid) and biotech. The drug pharmaceutical CDMO segment is divided into innovative and generics. Manufacturing is bifurcated into continuous manufacturing & batch manufacturing. The continuous manufacturing segment is expected to witness at a lucrative CAGR during the forecast period, due to opportunities attributed to rapidly growing adoption and robust development of pipeline drugs. Global pharmaceutical & biotech companies are increasingly outsourcing drug development activities to CDMOs to stay competitive in an unstable economic environment. This has increased the requirement for continuous manufacturing of drugs.

In 2023, the drug product segment is anticipated to grow at a lucrative CAGR over the forecast period. The robust demand for drug products, such as oral solid dose, semisolid dose, liquid dose, and others, is expected to drive the segment. Besides, a growing R&D pipeline is expected to impact the market positively. In addition, the burden of chronic and infectious diseases is rising worldwide.

Work Flow Insights

Based on work-flow, The commercial segment led the market with the largest revenue share of 87.93% in 2023. The market is segregated into clinical and commercial. Some key factors contributing to the growth are strong CDMOs' expertise in drug development and manufacturing, integration of advanced drug development and manufacturing technologies in CDMOs, increasing R&D of innovative therapies, and expanding product portfolio. Moreover, commercial CDMOs cater cost-effective services within the reduced timeline, which is expected to contribute to market growth.

The clinical segment growth can be attributed to the increasing R&D activities for investigational drugs and innovations, supported by investments and funding for drug developments.

Regional Insights

The pharmaceutical CDMO market in North America is expected to grow at the fastest CAGR of 6.5% over the forecast period. This can be attributed to a growing investment in R&D of new drugs by pharmaceutical companies, which boosts the demand for pharmaceutical contract development and manufacturing services. The growth of pharmaceutical industry in the U.S. and Canada is a key factor contributing to market growth. In addition, the substantial presence of key market players and clinical trials are anticipated to drive market growth. In addition, stringent regulatory requirements, particularly in the U.S. & Canada, necessitate specialized knowledge & compliance expertise, making CDMOs an attractive option for navigating regulatory hurdles.

U.S. Pharmaceutical CDMO Market Trends

The pharmaceutical CDMO market in the U.S. held the largest share in 2023. Pharmaceutical companies are increasingly outsourcing their development & manufacturing activities to CDMOs to reduce costs, accelerate time-to-market, and access specialized expertise. This trend is fueling market growth in the U.S. as CDMOs expand to meet the increasing demand for outsourcing services. For instance, In May 2023, CordenPharma ventured into synthetic oligonucleotide manufacturing at its facility in Colorado.

Europe Pharmaceutical CDMO Market Trends

The pharmaceutical CDMO market in Europe is expected to grow at the significant CAGR during the forecast period, due to a growing number of pharmaceutical activities increasing the demand for CDMOs. Moreover, the growing trend of outsourcing services to European countries is expected to contribute to the increasing demand for pharmaceutical CDMO in this region. 

The Germany pharmaceutical CDMO market held the largest share in 2023, owing to the market experiencing consolidation as larger companies acquire smaller ones. This consolidation strengthens the market position of the acquiring companies and allows them to improve operational efficiency & enhance competitiveness.

The pharmaceutical CDMO market in the UK is anticipated to grow at the fastest CAGR over the forecast period. Established market players in the region, such as Lonza Group, Piramal Pharma Solutions, and AbbVie Contract Manufacturing, which are actively involved in providing pharmaceutical contract development and manufacturing services, are expected to contribute to market growth.

Asia Pacific Pharmaceutical CDMO Market Trends

Asia Pacific held the market with the largest revenue share of 37.64% in 2023. This growth can be attributed to various factors, such as improved insurance schemes and improving economic conditions in the region, which allow patients to pay out-of-pocket pharmaceutical costs. In recent years, countries such as Singapore, China, and India have been observed to be major players in the pharmaceutical industry owing to their expanding manufacturing capabilities.

The pharmaceutical CDMO market in China held the largest share in 2023, due to growing partnership agreements between CDMO and pharmaceutical companies, supplementing China's pharmaceutical CDMO market growth. For instance, in September 2023, Chime Biologics, a Chinese CDMO, established a strategic partnership with Kings Pharm from South Korea.

The Japan pharmaceutical CDMO market is expected to grow at the fastest CAGR over the forecast period, due to rapid advancements in drug delivery technology, such as targeted drug delivery & sustained-release dosage forms, which drive pharmaceutical CDMO market growth.

The pharmaceutical CDMO market in India is anticipated to grow at the fastest CAGR over the forecast period, owing to low costs, the availability of industry experts, and the presence of WHO-cGMP-compliant facilities.

Key Pharmaceutical CDMO Company Insights

The major players operating across the market focus on adopting in-organic strategic initiatives such as mergers, partnerships, acquisitions, etc. The prominent strategies companies adopt are service launches, mergers & acquisitions/joint ventures, mergers, partnership & agreements, expansions, and others to increase market presence & revenue and gain a competitive edge driving market growth. Hence, increasing adoption of in-organic strategic initiatives is highly anticipated to boost the market share of prominent players.

Recent Developments

• In April 2023, Corden Pharma established a drug product innovation center of excellence with bioavailability enhancement capabilities for Oral Solid Dosage (OSD) manufacturing drug products, especially for low bioavailability APIs in Germany. This expansion broadened the company's operation capabilities in the significant market

• In October 2023, the Cambrex Corporation company successfully concluded a USD 38 million capacity expansion at its small molecule API manufacturing facility in High Point, North Carolina. This enhancement resulted in a twofold increase in the facility's manufacturing capacity. The expansion included cutting-edge analytical and chemical development laboratories, two additional clinical manufacturing suites, and the establishment of a small-scale commercial manufacturing operation featuring three work centers and 2,000 L reactors

• In February 2023, the WuXi AppTec company and Cidara Therapeutics expanded their collaboration to advance Cidara's Oncology DFC Program. The agreement extends existing collaboration, encompassing CMC development and GMP manufacturing-initially focused on Cidara's CD388 drug-Fc conjugate (DFC) for influenza-to include the oncology program

Pharmaceutical CDMO Market Report Scope

Global Pharmaceutical CDMO Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the pharmaceutical CDMO market report based on product, workflow, application, end-use, and region.

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • API

    • Type

      • Traditional Active Pharmaceutical Ingredient (Traditional API)

      • Highly Potent Active Pharmaceutical Ingredient (HP-API)

      • Antibody Drug Conjugate (ADC)

      • Others

    • Synthesis

      • Synthetic

        • Solid

        • Liquid

      • Biotech

    • Drug

      • Innovative

      • Generics

    • Manufacturing

      • Continuous manufacturing

      • Batch manufacturing

  • Drug Product

    • Oral solid dose

    • Semi-solid dose

    • Liquid dose

    • Others

• Workflow Outlook (Revenue, USD Million, 2018 - 2030)

  • Clinical

  • Commercial

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Oncology

    • Small Molecules

    • Biologics

  • Infectious Diseases

  • Neurological Disorders

  • Cardiovascular Disease

  • Metabolic Disorders

  • Autoimmune Diseases

  • Respiratory Diseases

  • Ophthalmology

  • Gastrointestinal Disorders

  • Hormonal Disorders

  • Hematological Disorders

  • Others

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Small Pharmaceutical Companies

  • Medium Pharmaceutical Companies

  • Large Pharmaceutical Companies

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Denmark

    • Sweden

    • Norway

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

    • Thailand

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East and Africa (MEA)

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait