According to reports*, the Active Pharmaceutical Ingredient (API) market is estimated to be $19.5bn, growing at 4.4% from 2015 to 2020. The biologics market is expected to grow 7-9% through 2022 and is projected to reach $3.8bn. The drug product development market is estimated to be $3.2bn, growing at 10-15% from 2015-2016.
“Outsourcing demand is on the rise,” said Anil Kane, PhD, executive director and global head of technical and scientific affairs, Patheon, part of Thermo Fisher Scientific.
However, there are several trends that will bring about change in the contract development and manufacturing organizations (CDMOs) outlook, he told us.
“Based on several trends, it is imperative that small emerging companies and Big Pharma will seek innovative business and partnering models to bring efficiencies and bring drugs to market faster,” Kane said.
Trends and changes
Biologics are approaching 50% of the pipeline, and advanced therapies challenge legacy biologics and the industry’s injectable capacity, said Kane.
“The complexities of molecules and the technical requirements such as biologics, advanced delivery systems and unique technologies are increasing,” he added.
“New manufacturing technologies and potentially small batch size requirements could change the CDMO outlook, capacity and capabilities in the next five years.”
Additionally, the increase in orphan drugs over the last 10 to 15 years (fig. 1) may require CDMOs to also change their outlook, model, and infrastructural needs to meet market demand.
Seamless clinical trials with shorter timeline have similarly increased in prevalence, and require chemistry, manufacturing, and controls (CMC) to be commercially ready earlier, said Kane.
The main drivers of CDMO growth, per Patheon's Tom Sellig:
- Smaller biopharma companies are developing greater share of new drugs, and lack in-house capabilities
- Heightened regulatory burdens are requiring expertise to navigate through approval
- Preference for end-to-end solutions, flexibility, and scalability offered by larger CDMOs
- Increasing complexity in bio-manufacturing
- Increasing uptake of biologics coupled with near-to-medium term capacity constraints
“CDMOs play a much larger role in supporting CMC requirements among licensing deals between small, emerging companies and medium-sized to Big Pharma,” he added. “CDMOs will continue to support the industry to develop clinical candidates or support NDA approvals and commercial launches.”
Another trend, Kane said the in-licensing and out-licensing of molecules and portfolios along with M&A activities within small and emerging companies continues to grow.
“Approximately 1,400 deals were done in the last three years (2014-2016) with an average of approximately 400 deals per year,” he explained, citing an EvaluatePharma report from 2017.
“Since the clinical candidates have been developed at a CDMO, these candidates most likely continue to be commercialized at the same CDMO,” he added.
Kane explained that small, emerging companies will need to outsource to CDMOs as they continue to develop promising candidates – and support majority of future drugs in the pipeline for the sponsors.
According to Alios Biopharma Senior Scientific Director, CMC Development, Jyanwei Liu PhD, who presented a talk at a short course at the AAPS Annual Meeting last year, said: “Emerging pharma is the main contributor to New Molecular Entity (NME) pipeline and approved new drugs."
In the first 10 months of 2017, Liu explained the FDA approved 26 New Drug Application (NDAs), of which only six came from the top twenty big pharma – 20 of the NDAs came from emerging pharma.
Per a PharmSource report, CDMOs are manufacturing 80% of the new products approved for small bio/pharma companies, and 67% of new products approved for mid-size companies.
“CDMOs will need to adapt to the changing environment of the industry, be flexible and have a ‘fit-for-purpose’ development philosophy,” said Kane.
In the next 5 to 10 years, he said the industry will adopt various business models to suit specific needs.
*Frost & Sullivan Pharmaceutical Contract Manufacturing market; HighTech Business Decisions - Biopharmaceutical Contract Manufacturing; Pharmsource Data