Active Pharmaceutical Ingredients CDMO Market Size, Share & Trends Analysis Report By Product (Highly Potent API, Antibody Drug Conjugate), By Synthesis, By Drugs, By Application, By Workflow, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global active pharmaceutical ingredients CDMO market size was estimated at USD 81.6 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 6.7% from 2021 to 2028. The growth can be attributed to factors such as increased drug R&D, the rising incidence of chronic diseases, the expanding importance of generics, and the increasing consumption of biopharmaceuticals.

Pharma companies have been increasing the amount of discovery, development, and manufacturing work they outsource over the last couple of decades. However, the urge to outsource is not uniform in the biopharma industry. Small biotechnology companies frequently rely on a Contract Development and Manufacturing Organization (CDMO) to produce their development products as they go through the pipeline.

COVID-19 has had a significant impact on the supply chain of the Active Pharmaceutical Ingredient (API), causing some level of disruption in terms of raw material supply and availability, shipping delays, and costs. As per the survey conducted by the Institute for Supply Management in February 2020, about 75.0% of responding companies experienced supply chain disruption as a result of COVID-19, and more than 44.0% did not have a plan to handle supply chain disturbance from China.

CDMOs are proving to be extremely beneficial to the pharmaceutical and biotech industries since they provide prospective capabilities and cost savings over in-house manufacturing. There is a substantial link between corporate size and outsourcing in general. Small and medium-sized businesses (SMEs) have fewer stakeholders and organizational hurdles in the decision-making process, allowing for a more fluid decision-making process.

Besides, more than 3,200 companies are currently engaged in active pharmaceutical ingredient manufacturing activities. As only one-third of these companies are linked with a corporate group that also has finished dose production capabilities, there is a lack of integration even though these are complementary businesses.

Product Insights

The traditional active pharmaceutical ingredient segment dominated the market and accounted for the largest revenue share of 40.5% in 2020. The highly potent APIs segment accounted for the significant largest revenue share of 29.5% in 2020. The growth is primarily driven by rising demand for targeted cancer and other treatments. Manufacturing and technology advancements, as well as manufacturer investments, are also contributing to the growth. The majority of HPAPIs are used in the development of anti-cancer medications. Most of HPAPIs are currently tiny molecules. However, more potent compounds are emerging at a faster rate.

The antibody-drug conjugate segment is anticipated to register a lucrative growth rate of 12.3% over the forecast period. The efficacy of Antibody Drug Conjugates (ADC) and checkpoint inhibitors in the fight against cancer is having a significant impact on ADC R&D. Besides, new and intriguing uses of antibody-drug conjugates are also being actively studied. The ADC biopharmaceuticals sector has experienced a significant increase in R&D into new uses of ADCs, both in terms of combination medications for cancer therapy and the application of the drug class to treat other diseases other than cancer.

Synthesis Insights

The synthetic segment dominated the market for active pharmaceutical ingredients CDMO and accounted for the largest revenue share of 73.2% in 2020. This is due to the increased availability of raw materials and the ease with which these molecules may be synthesized. Many synthetic molecules are also expected to go off-patent in the coming years, which is anticipated to boost growth.

The biotech segment is projected to register the fastest growth rate of 6.9% over the forecast period. Factors such as rising demand for biopharmaceuticals and higher molecular efficiency are propelling segment growth. Furthermore, large investments in the biotechnology and biopharmaceutical industries might be ascribed to the rise in the segment. Biotech active pharmaceutical ingredient covers a small portion of the active pharmaceutical ingredient market. However, given the explosive growth of the biopharmaceutical industry and the increasing use of biotech drugs, biotech-active pharmaceutical ingredients are expected to have a positive outlook.

Drug Insights

The innovative drugs segment dominated the market for active pharmaceutical ingredients CDMO and accounted for the largest revenue share of 74.6% in 2020. Increased FDA approvals for new molecular entities, the high cost of innovative active pharmaceutical ingredients relative to generic pharmaceuticals, and the increased focus on R&D are all contributing to segment growth. Many unique molecules are present in the pipeline as a result of extensive research in this subject and are projected to be launched during the forecast period. 

The generics drugs segment is anticipated to witness the fastest CAGR of 8.5% during the forecast period. This is largely due to patent expiration and cost-effectiveness. The generic sector is growing as a result of the growing number of patents that are scheduled to expire. According to the U.S. FDA, approximately 158 drug patents would expire in 2021, presenting a large market opportunity for generic pharmaceuticals. Out of 156 patents, 44 would be readily available to generic manufacturers. For instance, many firms are focusing on Hanmil Pharmaceutical's Amosartan and Amlopidine hypertension drugs, which are slated to expire in March 2021. Amosartan generics are presently being distributed by around 30 companies.

Application Insights

The oncology segment dominated the market for active pharmaceutical ingredients CDMO and accounted for the largest revenue share of 35.1% in 2020. In terms of sales, oncology is the outstanding market and accounted for one-eighth of total pharmaceutical revenue in 2017. In the following five years, it is expected to increase by double digits in terms of percentage, gaining a market share of more than a sixth of industry revenues by 2024. Cancer therapies are driving a significant share of biologics industry growth, as well as the Highly Potent API (HPAPI) sub-sector.

The glaucoma segment accounted for the largest revenue share of 7.0% in the market for active pharmaceutical ingredients CDMO in 2020. The segment is also projected to witness the fastest CAGR of 7.0% during the forecast period. This is largely attributed due to the rising prevalence of diabetes, the growing elderly population, and the increase in healthcare spending. Brinzolamide Ophthalmic Suspension, Nyxol (Phentolamine Mesylate), and Ripasudil hydrochloride hydrate are among the prospective drugs in the Glaucoma pipeline. Some of these drugs have reached the end of their late clinical development stages, while others are still in the process.

Workflow Insights

Based on workflow, the commercial segment led the market for active pharmaceutical ingredients CDMO and accounted for the largest revenue share of 88.0% in 2020. The growth is largely attributed to the high revenue generation from the commercial active pharmaceutical ingredient production that accounts for 63.0% of commercial CDMO revenues, which is APIs' larger market share a portion of the drug's cost-of-goods in comparison to the drug's product process of production.

The clinical segment is anticipated to witness the fastest CAGR of 7.1% in the market for active pharmaceutical ingredients CDMO during the forecast period. This is largely attributed due to a record number of molecules in the preclinical and clinical development pipelines of all sorts, as well as increased R&D spending. The late phase of clinical research has the most significant impact on the value generated by the CDMO pharmaceutical industry relationship.

Regional Insights

Asia Pacific dominated the active pharmaceutical ingredients CDMO market and accounted for the largest revenue share of 46.4% in 2020. The segment is anticipated to register the fastest CAGR of 8.9% throughout the forecast period. The significantly cheaper manufacturing costs as compared to North America and Europe and favorable laws in the region particularly in China and India are factors dominating the market for active pharmaceutical ingredients CDMO in the region. While China and India have established themselves as important providers of active pharmaceutical ingredient manufacturing services, the U.S. continues to be the principal outsourcing hub for pharmaceutical development. This is due to a combination of enormous amounts of financing and a unique concentration of university-affiliated pharmaceutical research hubs.

The increased importance of conventional medications and the rapidly increasing occurrence of persistent infections are important factors for the Indian API market to grow favorably. Generic APIs are exported from India to developed countries, accounting for 41.6% of total sales in India versus 24.7% in China. According to the Chemical Pharmaceutical Generic Association Research, India is the second-largest provider of generic active pharmaceutical ingredients to the U.S. market, with a 24.4% share. The country is also boosting its supply to Western Europe, which accounts for 19.2% of the region's total supply. According to recent findings, China accounts for 30% of the global nonexclusive API vendor market. Following China, the U.S. and India are the leading producers of nonexclusive APIs. As a result, India has become a major outsourcing center manufacturing active pharmaceutical ingredients.

Key Companies & Market Share Insights

Key market players are undertaking various strategic initiatives such as the signing of the new partnership agreement, collaborations, mergers and acquisitions, and geographic expansion, aiming to strengthen their services, and manufacturing capacities, thus providing a competitive advantage.

For instance, in October 2020, Corden Pharma announced that its Boulder, Colorado location has accomplished the development of a new highly powerful API laboratory. Customers can now use the new laboratory, which can handle highly strong chemicals with an OEL as low as 1 ng/m3.

Drug companies are trying to produce vaccines and medicines to battle the COVID-19 pandemic, which has disrupted pharmaceutical R&D. The active pharmaceutical ingredient sector suffers a significant knock-on effect. Following the rush to get candidates into clinical trials, the industry turned its focus to acquiring manufacturing capacity, with companies signing multiple agreements with CDMOs. For example, in May, Moderna contracted Swiss CDMO Lonza to develop the active pharmaceutical ingredient for its mRNA-1273 vaccine. In June, AstraZeneca and Oxford University contracted Novasep to manufacture the active ingredient for AZD1222, another COVID-19 vaccine, for the European market. Some of the prominent players in the active pharmaceutical ingredients CDMO market include:

• Cambrex

• Recipharm

• Thermo Fisher Pantheon

• Corden Pharma

• Samsung Biologics

• Lonza

• Catalent

• Siegfried

• Piramal Pharma Solutions

• Boehringer Ingelheim

Active Pharmaceutical Ingredients CDMO Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global active pharmaceutical ingredients CDMO market report on the basis of product, synthesis, drug, workflow, application, and region:

• Product Outlook (Revenue, USD Million, 2016 - 2028)

  • Traditional Active Pharmaceutical Ingredient (Traditional API)

  • Highly Potent Active Pharmaceutical Ingredient (HP-API)

  • Antibody Drug Conjugate (ADC)

  • Others

• Synthesis Outlook (Revenue, USD Million, 2016 - 2028)

  • Synthetic

  • Biotech

• Drug Outlook (Revenue, USD Million, 2016 - 2028)

  • Innovative

  • Generics

• Workflow Outlook (Revenue, USD Million, 2016 - 2028)

  • Clinical

  • Commercial

• Application Outlook (Revenue, USD Million, 2016 - 2028)

  • Oncology

  • Hormonal

  • Glaucoma

  • Cardiovascular

  • Diabetes

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

    • Argentina

    • Colombia

    • Chile

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE