China Small Molecule CDMO Market Size, Share & Trends Analysis Report By Product (Active Pharmaceutical Ingredients API, Finished Drug Products), By Synthesis, By Drug, By Workflow, And Segment Forecasts, 2023 - 2030

Report Overview

The China small molecule CDMO market size was valued at USD 11.0 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 19.4% from 2023 to 2030. The rise in clinical trial activity in China, the high dependence on China for API and drugs, and the significant number of contract development & manufacturing organization (CDMOs) offering end-to-end services in the country are the factors supporting the market growth. The high disease burden in the country further supports the demand for drug development and manufacturing and further promotes market growth.

In December 2021, the 14th five-year plan was launched. This plan & the Healthy China 2030 project both emphasize on the significance of the healthcare reforms like reducing inequality in insurance coverage ranges & supporting public services. The industry reform initiatives may also improve access to healthcare, lower the cost of healthcare, and provide silver economy products for China's rising aging population. Moreover, the 14th five-year plan asks for an industry-wide investment of above 10.0% rise every year in R&D. All these factors are likely to boost the market growth in the post-pandemic period.

Even after governments in western countries take steps to improve on shoring, the high cost of raw materials and labor makes it difficult to manufacture cost-effective drugs in western countries. For example, even after the pandemic, China still exports more than 12.0% of its APIs to the U.S. and 28.0% to Europe. This is expected to support CDMO activities in China even after the Western government takes measures to boost on shoring activities.

China represents significant opportunities for the growth of CDMOs. Skilled human resources and great manufacturing potential in China offer avenues to contract manufacturers and hence enable them to enhance market share. There is high demand for conducting research in the country owing to the large population. The low cost of operations and production has prompted global drug developers to consider China for their outsourcing needs. This, in turn, makes them attractive markets for the growth of CMOs and CDMOs.

Product Insights

The active pharmaceutical ingredients segment held 61.8% of the market share in 2022. Based on the product, the China small molecule contract development & manufacturing organization market is segmented into active pharmaceutical ingredients and finished drug products (FDP). The high burden of diseases such as cancer, diabetes, and cardiovascular disorders in China and initiatives by the government to improve access to generic drugs are some of the primary factors contributing to segment growth.

The CDMOs in China are actively trying to improve the manufacturing capacity of API to fulfill future demands. For instance, in May 2022, Lonza established API manufacturing facility in China with an investment of USD 18.8 million. Such activities are expected to promote segment growth.

Finished Drug Products (FDP) segment is expected to exhibit a CAGR of 19.1% during the forecast period. Based on finished drug products, the market is segmented into solid, injectable, and others. The solid dose segment accounted for the highest share in the market. Solid dosages include tablets, capsules, granules, and powders. Tablets and capsules are two of the most commonly used solid dosage forms.

The accurate dosing of this dosage form, low cost of manufacturing, long shelf life of the product, and ability to modify tablets by making them a controlled dosage are some of the key factors contributing to segment growth. Furthermore, this dosage form does not require any experienced personnel for the administration of the drug, which further supports the overall segment growth.

Synthesis Insights

In 2022, the China small molecule CDMO market by synthetic segment dominated the market, accounting for 73.2% of the total revenue. Based on synthesis, the market is segmented into synthetic and biotech. A significant number of CDMOs operating in China are primarily focused on small molecule development and manufacturing. The ease of operation for handling small molecules is one the key factor supporting the segment market. Moreover, the availability of low-cost raw materials in the country also supports the manufacturing operation of the synthetic drugs in the country and thus supports the segment market.

The biotech segment is expected to expand with the fastest CAGR of 19.6%. This segment is driven by the factors such as rising biopharmaceutical demand and enhanced molecular efficiency. The development of therapeutic proteins and other medications has been aided by the growing use of biotechnology solutions. The need for drug discovery and development has grown owing to the increasing prevalence of chronic diseases. All these factors are expected to support segment growth.

Drug Insights

The innovative segment accounted for a maximum share of 59.1% in 2022 and is likely to remain dominant throughout the forecast period. Based on drug, the market is segmented into innovative and generic. The segment growth can be attributed to increasing in R&D initiatives for novel medicine development and favorable government policies.

A robust drug pipeline of major pharmaceutical players coupled with growing investment in pharmaceutical R&D is likely to boost segment growth during the forecast period. For instance, as of September 2021, Jiangsu Hengrui Pharmaceuticals Co., Ltd. had more than 37 drug candidates in its pipeline. Pharmaceutical companies based in China have several innovative drugs in the pipeline, which is expected to improve CDMO activities for innovative drugs in China.

Generic segment is expected to expand at the fastest rate of 19.8% CAGR across the forecast. The demand for generic drugs continues to grow as consumers and payers seek different ways to reduce the cost of healthcare. Several drugs have lost their patents in China, for instance, Pfizer’s Lipitor, Sanofi’s Plavix, Novartis’ Gleevec, and Lilly’s Alimta have all lost their patents in China. An increasing number of drugs losing their patents in the country are expected to drive the number of small molecule generics entering the Chinese market, and thus, support contract development and manufacturing of generics in the country.

Workflow Insights

The clinical segment is expected to expand with a CAGR of 19.7% through the forecast. Based on workflow, the market is divided into clinical and commercial segments. China is considered a highly preferred location for conducting clinical trials because of its large pool of treatment-naive patients and local experts. Regulatory actions have been taken to encourage clinical trial activity.

For instance, the NMPA's Center for Drug Evaluation in China is taking initiatives to improve the quality of clinical studies by conducting data integrity, authenticity, and normative document inspections. The low cost of clinical trials in China has improved clinical trial activity in the country. Due to this reason, a significant number of western pharmaceutical companies are conducting clinical trials in China.

The China small molecule CDMO market by commercial segment held the highest share of 53.1% in 2022. Growing demand for generic drugs in the country and a significant number of approvals for small-molecule drugs are the key factors driving the demand for commercial drug CDMO services in the country. In addition, the high burden of chronic diseases, such as cancer, diabetes, cardiovascular diseases, Alzheimer's, and others, in the country is likely to drive market growth.

Moreover, the COVID-19 pandemic also improved the demand for small-molecule drugs for treating disease symptoms. Thus, the above-listed factors are supporting segment growth.

Application Insights

In 2022, the China small molecule CDMO market by oncology segment dominated the market, accounting for 38.6% share of the total revenue. Based on application, China small molecule contract development & manufacturing organization market is segmented into oncology, hormonal, glaucoma, cardiovascular disease, diabetes, and others. The market for oncology is likely to expand with an increasing number of cancer cases in China.

For instance, as per the estimates of Cancer Tomorrow in 2020, more than 4.6 million people were affected by cancer, and above 6.9 million people are expected to have cancer by 2045 in China. The growing number of cases in the country is expected to improve the demand for new therapeutics used for treating cancer, which, in turn, drives the demand for contract manufacturing & development services for cancer.

The hormonal segment is expected to expand at 19.5% CAGR throughout the forecast period. Hormonal diseases such as hypothyroidism, hyperthyroidism, polycystic ovary syndrome (PCOS), and polycystic ovarian disease (PCOD) have become very common worldwide and in China. For instance, research published by the National Library of Medicine stated that Chinese women have a high rate of PCOS, and this rate varies depending on the location, occupation/identity, age, publishing date, diagnostic criteria, survey duration, and prevalence of the population being surveyed.

The research stated that more than 154,599 participants were included in the study out of whom, 12,845 developed PCOS. Because of the high prevalence of hormonal diseases, it is expected that contract development and manufacturing of hormonal drugs will improve, thereby supporting segment growth.

Key Companies & Market Share Insights

Market players are undertaking various strategic initiatives such as partnerships, collaborations, mergers and acquisitions, and geographic expansion, aiming to strengthen their service portfolio, and provide a competitive advantage. For instance, Raffles Pharma Tech Co., Ltd., in April 2020, collaborated with Anhui Xuancheng Menovo Pharmaceutical Co., Ltd. for the process development and manufacturing of small molecules. As per the collaboration, the company developed synthetic routes to scale-up research for the drug intermediates. Some prominent players in China small molecule CDMO market include:

• Bellen Chemistry

• Zhejiang LangHua Pharmaceutical Co., LTD

• Raffles PharmaTech Co., Ltd

• Shanghai Mathcon Pharmaceutical Co., LTD.

• Wisdom Pharmaceutical Co., Ltd.

• Gear Pharma

• Hangzhou Ausia Biological Technology Company, LTD

• Desano Inc.

• Shanghai Chemspec Corporation

• Zhejiang Chetou Pharmaceutical Co., Ltd

China Small Molecule CDMO Market Report Scope

China Small Molecule CDMO Market Segmentation

This report forecasts revenue growth at country level and provides an analysis on the industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the China small molecule CDMO market based on the product, synthesis, drug, workflow, and application:

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Active Pharmaceutical Ingredients (API)

    • Innovator API

      • Traditional Active Pharmaceutical Ingredient (Traditional API)

      • Highly Potent Active Pharmaceutical Ingredient (HP-API)

      • Antibody Drug Conjugate (ADC)

    • Generic API

    • Traditional Active Pharmaceutical Ingredient (Traditional API)

    • Highly Potent Active Pharmaceutical Ingredient (HP-API)

    • Antibody Drug Conjugate (ADC)

  • Finished Drug Products (FDC)

    • Solid

    • Injectable

    • Others

• Synthesis Outlook (Revenue, USD Million, 2018 - 2030)

  • Synthetic

  • Biotech

• Drug Outlook (Revenue, USD Million, 2018 - 2030)

  • Innovative

  • Generic

• Workflow Outlook (Revenue, USD Million, 2018 - 2030)

  • Clinical

  • Commercial

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Oncology

  • Hormonal

  • Glaucoma

  • Cardiovascular Disease

  • Diabetes

  • Others