Small Molecule CDMO Market Size, Share & Trends Analysis Report By Drug Type (Generics, Innovators), By Product (APIs, Finished Drug Products), By Application (Oncology, CVD, CNS Conditions), By Region, And Segment Forecasts, 2024 - 2030

Small Molecule CDMO Market Size & Trends

The global small molecule CDMO market size was estimated at USD 67.93 billion in 2023 and is anticipated to grow at a compound annual growth rate (CAGR) of 7.1% from 2024-2030. The significance of small molecules in expanding global therapeutic innovations remains pronounced. Specialty medicines are significantly steering pharmaceutical industry growth globally, where small molecule applications contribute to more than half of specialty sales. For instance, as reported by the U.S. Food and Drug Administration (FDA) in 2022, small molecules held around 59% of new drug approvals, representing 22 of the 37 new drugs approved in 2022 were small molecules. Rising prevalence of cancer and demand for safer therapeutic options are major market growth contributors.

Cancer is one of the major causes of death globally. Cancer can be treated in the early stages of the disease. However, after stage 2, treating cancer is a challenge. This, along with the high burden of cancer, is encouraging researchers to develop new treatment options, which is expected to boost demand for CDMO services for small-molecule drugs. As of January 2023, ClinicalTrial.Gov stated that over 11,465 studies were registered for cancer research. Profit margins within the pharmaceutical industry are shrinking as a result of rising pricing pressure, regulatory challenges, and patent expiration.

Outsourced services are viewed as a "strategic competitive weapon" by pharmaceutical companies as they assist in overcoming these issues. These services help save customers’ expenses. They also aid in saving time, which can be used in the operations & management of a manufacturing & research facility. Contract development and manufacturing enable low-cost product development by decreasing a product's overall manufacturing cost. Furthermore, outsourcing services aid in the removal of trade barriers and smoothen foreign market entry, thereby driving market growth.

Market Concentration & Characteristics

Degree of innovation in small molecule therapeutics is constantly evolving. For decades, small-molecule therapeutics have been considered a cornerstone of pharmaceutical innovation, and with ongoing technological and research advancements, the sector will flourish in the coming years

Several market players, such as Cambrex Corporation, Evotec, and Bellen Chemistry are involved in merger and acquisition activities. Through M&A activities, these companies can expand their geographic reach and enter new territories

Companies are actively investing substantial resources in clinical trials and regulatory submissions to obtain regulatory approval for pipeline products. This may increase the cost of development of novel small-molecule therapeutics

A wide range of product substitutes, such as biologics and biosimilars including cell and gene therapeutics, are growing. The U.S. Food and Drug Administration reported that overall biologics had grown significantly in new molecular entities (NMEs) in 2021 and 2022. The Biologics sector grew by around 10% from 2020 to 2021

Product Insights

The Active Pharmaceutical Ingredients (API) segment accounted for the largest revenue share of 62.3% in 2023. The high burden of diseases, such as cancer, diabetes, and cardiovascular disorders (CVD), and initiatives by various governments to improve access to generic drugs are primary factors contributing to segment growth. CDMOs are actively trying to upscale the manufacturing capacity of API to fulfill future demands. For instance, in May 2022, Lonza, a CDMO, established an API manufacturing facility in China with an investment of USD 18.8 million. Such activities are expected to promote segment growth. Moreover, in March 2022, India started manufacturing 35 APIs under the Production Linked Incentive (PLI) to boost domestic manufacturing.

The finished drug products segment is anticipated to witness stable growth from 2024 to 2030. Small molecules are preferred in pharmaceutical development due to their cost-effectiveness, well-established manufacturing processes, and ability to target various diseases. Flexibility of small molecules, which can be administered through various routes, such as injectable, oral, or topical, supports their extensive applicability. Moreover, pharmaceutical companies are significantly contributing to R&D activities to address various medical conditions, strongly supporting segment growth. Furthermore, technological advancements in drug design & discovery and novel formulation practices have enhanced the safety & and efficacy profiles of small molecule drugs, thereby supporting segment growth.

Drug Type Insights

The innovators segment accounted for the largest revenue share in 2023. This is attributed to increased R&D initiatives for novel medicine development. Robust drug pipelines of major pharmaceutical players also propel segment growth. For instance, as of 2022, China-based Fosun Pharma had over 17 drugs in its pipeline. A robust pipeline of drugs from pharmaceutical companies is expected to improve demand for contract manufacturing of innovative drugs during the forecast period. Similar initiatives undertaken by pharmaceutical companies globally support industry growth. In recent years, the U.S. FDA approved a significant number of new APIs. For instance, in 2021, the FDA approved 50 new molecular entities in the U.S. This further supports segment growth.

The generics segment is estimated to register the fastest CAGR from 2024 to 2030. Growing demand for generic drugs globally supports segment’s growth. Public organizations across the globe are trying to reduce healthcare expenditures by increasing the use of generic drugs. For instance, the U.S. FDA signed a 5-year grant with the University of Maryland and the University of Michigan in 2020 to establish the Center for Research on Complex Generics. Such projects are expected to enhance the development of generics, thereby boosting their manufacturing demand. Increasing rates of generic drug sales are anticipated to augment demand for generic drug contract development in the global market.

Application Insights

The oncology segment dominated the market in 2023. The oncology segment is likely to expand with an increasing number of cancer cases globally. For instance, according to the World Health Organization (WHO), cancer is a leading cause of death and accounted for 10 million deaths in 2021 globally. A growing number of cancer cases is expected to boost the demand for new therapeutics for treating cancer, which, in turn, drives the demand for contract manufacturing & development services for cancer therapeutics, including small molecule drugs. Furthermore, in the past 10 years, several cancer drugs have been approved in China. According to Springer Nature Research, 353 new drugs were approved in China between 2011 and 2021, with 94 of them being specifically approved for oncology.

The autoimmune/Inflammation segment is anticipated to have a steady growth rate from 2024 to 2030. High burden of autoimmune diseases is one of the major factors supporting drug development in this field. A significant number of people worldwide suffer from autoimmune diseases like psoriasis. For instance, in 2022, psoriasis organizations stated that over 125 million people worldwide suffer from psoriasis, which is likely to boost demand for creams and ointments to control the disease symptoms. Furthermore, more than 8 million people in the U.S. have psoriasis. This is further expected to propel the growth of the global market for autoimmune/inflammation-related small molecule therapeutics, thus simultaneously supporting demand for CDMO services.

Regional Insights

North America held a considerable revenue share in 2023. North America is one of the major contributors to the global market. It is marked by the existence of numerous well-established companies in the pharmaceutical and biotechnology sectors. Furthermore, growing R&D investments by life sciences and pharmaceutical companies are anticipated to increase the region's contract manufacturing demand. In addition, growing prevalence of diseases, such as cancer, diabetes, and CVD, in this region is likely to increase CDMO services adoption for drug or medicine development. Stringent regulations regarding product development, manufacturing, and quality control are anticipated to create growth opportunities for domestic CDMOs.

The U.S. accounted for the largest share of the North America regional market in 2023. The U.S. has the largest healthcare spending in the world due to the high quality of medical care services and increasing prevalence of chronic diseases. A rise in outsourcing activities by pharmaceutical companies and the support of CDMOs in reducing operational & capital expenses are responsible for its lucrative growth. In addition, strong R&D practices in the country and the promotion of new therapies have significantly contributed to its high market share. A growing number of clinical trials in the country further generates opportunities for small-molecule CDMOs. For instance, according to the WHO International Clinical Trial Registry Platform (ICTRP), 147,213 clinical trials were conducted in the U.S. between 1999 and 2021. According to the statistics of ClinicalTrials.gov, 127,967 clinical studies are registered in the U.S. (as of December 2021).

Asia Pacific is expected to register the fastest CAGR from 2024 to 2030. The region’s healthcare sector is continuously evolving due to technological advancements and low service costs. The availability of a skilled workforce at lower costs than in developed economies, such as Europe and the U.S., is anticipated to propel regional market growth. China holds the largest share in Asia Pacific, primarily due to high pharmaceutical R&D investment. Increasing regulatory focus on quality control for manufacturing is one of the key factors expected to drive region’s growth. Asia Pacific has several regulatory agencies, such as the Pharmaceuticals & Medical Devices Agency (PMDA) in Japan, the Ministry of Food & Drug Safety (MFDS) in South Korea, the Therapeutic Goods Administration (TGA) in Australia, and the Singapore Health Sciences Authority (HSA) in Singapore. Their strong influence over the market is expected to provide lucrative growth opportunities in this region.

Key Companies & Market Share Insights

• Lonza, Catalent, Inc., and Thermo Fisher Scientific Inc. are some of the dominant players operating in the global small molecule CDMO market.

• Thermo Fisher Scientific Inc. is one of the prominent players serving small molecule therapeutics, with a global presence in 50 countries

• Lonza’s API development and manufacturing services aid in the production of drug substances necessitating advanced synthesis proficiency and process development. It develops and manufactures niche category API products, such as Highly Potent API, and develops Antibody Drug Conjugates (ADCs), Cambrex Corporation, Bellen Chemistry, Siegfried Holding AG., and Recipharm AB are some of the emerging players functioning in the global market.

• Recipharm AB has over 30 development & manufacturing facilities in Europe, North America, Israel, and India

• Cambrex Corporation specializes in APIs, advanced intermediates, and enhanced drug delivery products for branded & generic pharmaceuticals. Development and manufacturing capabilities include enzymatic biotransformation, high-potency APIs, high-energy chemical synthesis, controlled substances, and formulation of finished dosage form products

Recent Developments

• In May 2023, Societal CDMO, Inc., a CDMO specializing in small molecule therapeutics, has been chosen by Atossa Therapeutics to deliver a variety of its clinical trial services (CTS) tailored to Atossa’s exclusive selective estrogen receptor modulator (SERM), (Z)-endoxifen

• In April 2023, Eurofins Scientific announced the acquisition of all assets of Gomti Life Sciences Private Limited through a Business Transfer Agreement. This acquisition enabled Eurofins Scientific to manufacture RSMs, intermediates, APIs, and NCEs, providing comprehensive support for drug substance requirements ranging from multi-kilogram to metric-ton scale

• In February 2023, Lonza announced an expansion of its conjugation facility in Visp (CH). This expansion signifies the company's increased investments in Visp (CH), encompassing small molecules and biologics development and manufacturing, including drug products

• In August 2022, Catalent, Inc. announced its agreement to acquire Metrics Contract Services. The acquisition has strengthened Catalent’s capabilities in integrated oral solid formulation development, manufacturing, & packaging and in handling highly potent compound-based small molecules

Small Molecule CDMO Market Report Scope

Global Small Molecule CDMO Market Report Segmentation

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

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

  • Active Pharmaceutical Ingredients (API)

  • Finished Drug Products

• Drug Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Innovators

  • Generics

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

  • Oncology

  • Cardiovascular Disease

  • Central Nervous System (CNS) Conditions

  • Autoimmune/Inflammation

  • Others

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

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Denmark

    • Sweden

    • Norway

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • Thailand

    • South Korea

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait