Pharma is seeking to reduce fixed costs associated with large manufacturing facilities and this has driven revenues in the CMO sector, which is predicted to grow from $22.2bn in 2009 to $33.7bn by 2014, according to a report by Business Monitor International (BMI).
The fastest growing sector of the CMO market is predicted to be biologics. Pharma’s pipeline includes an increasing proportion of biologics and this, coupled to the predicted increase in the follow-on biologics (FOB) market, will drive growth at CMOs.
However, biologics manufacturing has significantly higher barriers to entry in comparison with small molecules. Manufacturing biologics requires more investment in infrastructure and is more complex, as highlighted by Genzyme’s difficulties scaling up from 160L to 2000L bioreactors.
Consequently, there are relatively few CMOs with biologics capabilities but BMI believes this must change, describing the development of biomanufacturing capacity as “a key imperative for CMOs in the future”.
The majority of the current biomanufacturing capacity is in North America but, as with many other areas of outsourcing, Asia is the growth region, with its share of global facilities predicted to increase from 10 per cent in 2009 to 20 per cent by 2013.
However, the report also states that “most Asian CMOs still fail to demonstrate the rigor of regulatory compliance that Western companies demand and their customers expect”.
The report believes this situation needs to improve, as do regulations in India and China. It states that to fulfil their potential India and China must implement stronger actions to control domestic supplies of raw materials and collaborate closely with foreign regulatory bodies.
By undertaking these actions the countries can ensure they comply with Western manufacturing standards, which could be particularly important for the more complex process of producing biologics.