The Contract Development and Manufacturing Organisation (CDMO) industry has boomed in recent years, with Big Pharma increasingly focusing on its core business of R&D and outsourcing other elements of the supply chain, including manufacturing, to third-party CDMOs. Additionally, the global proliferation of biotechs – most of which lack the in-house manufacturing capabilities to produce their own drugs – means that it is little wonder that the global CDMO market is projected to grow from USD 81 billion in 2020 to 159 billion by 2027, according to Valuates Reports.
“In the past, pharma companies looked at CMO partnerships and dual sourcing primarily as a risk mitigation exercise. However, pharma is now realising that its core competencies are in R&D rather than in building and maintaining manufacturing facilities, leading to a greater degree of outsourcing. I foresee that trend continuing, particularly in an environment of constrained supply chains post-COVID,” explains John Rim, CEO of Korea-based Samsung Biologics, one of the top 10 CDMOs in the world with USD 1.21 billion in revenue during 2021.
Pharma is now realising that its core competencies are in R&D rather than in building and maintaining manufacturing facilities, leading to a greater degree of outsourcing
Leading the CDMO industry is Switzerland-based Lonza with USD 5.62 billion revenue in 2021. Its global head for mammalian biologics, Jennifer Cannon, told PharmaBoardroom that the industry’s rise is closely tied with the exponential growth of the number and types of molecules being developed by pharma companies.
“Ten years ago, we saw the standard monoclonal antibodies experience a boom but, if we look at today’s pipelines, we see that the number of modalities and molecules has grown as the industry looks for more efficacy and targeted therapies,” Cannon said.
“In the case of a possible blockbuster product,” she explained, pharma companies “would have to build whole new facilities, investing hundreds of millions. However, the last stages of drug development, up to commercialisation, carry plenty of uncertainty and not all companies can or are willing to take such a big risk.” This means that smaller biotech companies are in need of outsourcing partners, too.
“If a product does not succeed in clinical trials, the customer might end up with underutilised plants which is why some choose to outsource 100 percent of supply. Somewhere in the middle we can find creative options, hybrid models where they outsource part of their supply to CDMOs.”
The last stages of drug development, up to commercialisation, carry plenty of uncertainty and not all companies can or are willing to take such a big risk
For Samsung Biologics’ CEO, an overlooked aspect – and key to its recent success – of the current CDMO industry is speed.
“[Samsung Biologics is] able to build facilities faster than any other player in the industry. [The company] has a phenomenal ability to rapidly carry out technology transfers; our average timeframe is three to four months compared to an industry standard of six to eight. Even during the COVID pandemic, we were able to complete the tech transfer for Moderna’s vaccine within three months and gain approval from the Korean government within five months,” said John Rim.
See below for a ranking of the top 9 players in the CDMO industry, according to publicly available information:
1. Lonza
HQ: Basel, Switzerland
CEO: Pierre-Alain Ruffieux
Revenue: USD 5.62 billion (2021)
(Link to latest annual report)
2. Catalent
HQ: New Jersey, United States
CEO: Alessandro Maselli
Revenue: USD 3.99 billion (2021)
(Link to latest annual report)
3. ThermoFisher (Patheon & PPD)
HQ: Massachusetts, United States
CEO: Marc N. Casper
Revenue: USD 39.2 billion* (2021)
*Revenue of the entire company, not clear how much is due to CDMO activities.
(Link to latest annual report)
4. WuXi Biologics
HQ: Jiangsu, China
CEO: Zhi Sheng Chen
Revenue: USD 1.5 billion (2021)
(link to latest annual report)
5. Recipharm
HQ: Stockholm, Sweden
CEO: Mark Funk
Revenue: USD 1.3 billion (2020)
6. Samsung Biologics
HQ: Incheon, South Korea
CEO: John Rim
Revenue: USD 1.21 billion (2021)
(Link to latest annual report)
7. Siegfreid
HQ: Zofingen, Switzerland
CEO: Dr. Wolfgang Wienand
Revenue: USD 1.14 billion (2021)
(Link to latest annual report)
8. Fujifilm (Bio CDMO)
HQ: Tokyo, Japan
CEO: Teiichi Goto
Revenue: USD 1.11 billion* (2021)
*Bio CDMO business only
(Link to latest financial report)
9. Boehringer Ingelheim (Biopharmaceutical Contract Manufacturing)
HQ: Ingelheim am Rhein, Germany
CEO: Jean-Michel Boers
Revenue: USD 917 million (2021)
