As the global pharmaceutical industry continues to grow, so have opportunities for service providers. Over the last few decades, while big pharma companies continued to focus on their core business, contract development and manufacturing organizations (CDMOs) have positioned themselves as alternatives to in-house development and manufacturing operations, promising to decrease time to market and reduce costs.
In addition, the traditional contract manufacturing model has undergone a transformation as companies have begun to support pharmaceutical companies in their drug discovery and clinical research efforts, competing with traditional contract research organizations (CROs).
According to Grand View Research, the CDMO market will grow from USD 98.7 billion in 2018 to USD 157.7 billion in 2025 and, as a PwC report notes, the Asia-Pacific region, particularly China and India, has been the leading growth market in the CDMO industry. This is “due to considerably lower manufacturing costs than in North America and Europe and favorable regulations. While China and India have established themselves as the major suppliers of API manufacturing services, the US remains the primary hub for pharmaceutical development outsourcing.”
Below are the top five global CDMOs ranked by 2020 sales.
Lonza
With around USD 5 billion in sales in 2020, Swiss-based Lonza has consolidated as a titan in the CDMO industry. The public company’s shares rose more than 60 percent last year as it expanded in drugs and prepared to unload specialty ingredients, as well as its role in the manufacturing process of both the Moderna and AstraZeneca COVID-19 vaccines. As part of its divestment from specialty ingredients strategy, the company announced earlier this month that it had sold the division to Bain Capital and Cinven for USD 4.7 billion.
Lonza has four divisions: Capsules and Health Ingredients, Small Molecules, Biologics, and Cell & Gene Therapy, and Bioscience.
Catalent
Based in New Jersey, Catalent provides advanced delivery technologies and development and manufacturing solutions for drugs; protein, cell, and gene therapy biologics; and consumer health products.
Catalent was created in 2007 after Cardinal Health sold its Pharmaceutical Technologies and Services (PTS) segment to The Blackstone Group for approximately USD 3.3 billion. The company announced its initial public offering (IPO) and went public in 2014 with a market capitalization of USD 2.4 billion.
Last year, the company partnered with multiple COVID-19 vaccine developers, including Pfizer, Johnson & Johnson, AstraZeneca and Moderna to provide manufacturing, vial filling and packaging capabilities. In addition, Catalent entered the cell therapy market after its acquisition of Mastercell Global, a leading cell therapy CDMO with locations in Texas and Belgium.
Patheon (ThermoFisher)
Patheon serves more than 400 pharmaceutical clients worldwide. Its parent company, Thermo Fisher Scientific has revenues exceeding USD 30 billion.
With headquarters in Amsterdan, Netherlands, and Durham, North Carolina, the company has more than 55 locations around the globe, providing services through all phases of development, including API, biologics, viral vector services, formulation, clinical trial solutions, logistics services and commercial manufacturing.
Patheon was founded in Canada in 1974 as Custom Pharmaceuticals and changed its name in 1993, the year it went public in the Toronto Stock Exchange. Thermo Fisher Scientific completed the acquisition of the company for USD 7.2 billion in 2017.
Recipharm
Based in Sweden, Recipharm became part of the top five after its acquisition of Consort Medical in 2020 for a reported USD 707 million. With over USD 1.3 billion in revenues in 2020, the company’s customer segment as a share of sales are big pharma companies (42 percent), specialty pharma and generics (25 percent), and small and mid-size pharma companies (15 percent).
“It may be bold, but I think the success of Recipharm, in the beginning, may have contributed to the industry trend that we see of CDMO’s today, at least on a [Swedish] local level… Today we have a strong presence in almost every country in Western Europe and a significant footprint in India, where we made two acquisitions, while we also acquired a laboratory in Israel and development operations in the US. When we went public, we had doubts about how our clients would react when our financial performance was made available, but it turned out that customers actually appreciated the transparency that comes with Recipharm being a public company,” CEO Thomas Eldered told PharmaBoardroom in an exclusive interview.
Siegfreid
Another Swiss-based company, Siegfreid, completes the top five. The company has production facilities in Switzerland, the United States, Malta, China, Germany, France and Spain. In 2019, the company achieved net sales of around USD 930 million and employs approximately 3500 people.
“There are major opportunities for Siegfried beyond our daily business – in terms of acquiring other companies, sites, businesses and tech- nologies. The ambition to grow by means of mergers & acquisitions is based on the reco- gnition that in our business, corporate size can represent competitive advantage,” said CEO, Dr. Wolfgang Wienand, in the company’s 2019 annual report.
The company’s services range from development of drug substances to product development, registration and manufacturing to packaging and logistics.
