Microbial API Market Size, Share & Trends Analysis Report By Hose (Mammalian, Bacterial, Fungal), By Type (Antibody, Peptide, Protein), By Site, By Molecule, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Microbial API Market Size & Trends

The global microbial API market size was estimated at USD 58.04 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 6.66% from 2023 to 2030. The growth of the market is attributed to the rising demand for biological drugs and the ease of their development using the fermentation process. Fermentation is usually carried out through microorganisms and bacteria, which helps produce secondary metabolites, by converting nitrogen and carbon into critically valuable microbial APIs and intermediates by substantially altering the development conditions. The ease and cost-effectiveness offered by the process are propelling the growth of the overall market.

Microbial fermentation serves as the fundamental process for manufacturing a diverse array of pharmaceutical products designed to address medical conditions. These products extend a broad spectrum, encompassing anticancer cytotoxic drugs and vaccines, antibiotics and vaccines for combating infectious diseases, as well as therapies for hormonal disorders and various other medical indications. The natural biosynthesis of endogenous compounds follows complex multi-step pathways, some of which can be manipulated to enable the production of unknown molecules. Microorganisms can be genetically modified using recombinant technology or undergo substantial metabolic engineering by modifying their inherent metabolic pathways.

Fermentation stands as a unique pathway for the production of chemical APIs, exclusively reliant on microorganisms, without an equivalent in other biological systems, such as mammalian cells. For instance, this process is exemplified by antibiotics and secondary metabolites produced in fungi, which serve as essential components in anticancer and anti-infectious treatments or for producing lipid A in gram-negative bacteria for use as adjuvants. These organic compounds can be synthesized through multi-step processes from their basic building blocks. However, these organic molecules are fundamentally complex, often featuring complex structures like chiral centers, large stereospecific rings, or unique conjugated double-bond systems. Opting for the synthetic approach not only necessitates significant development efforts but is also time-consuming and comes with higher costs compared to the fermentation method.

The rising prevalence of chronic conditions, including Alzheimer's disease and others, is expected to be a key factor propelling the demand for microbial APIs. According to the Alzheimer's Association, in 2023, more than 6 million individuals in the U.S. dealing with Alzheimer's disease. This condition ranks as the sixth leading cause of death in the U.S. and is more prevalent among individuals aged 65 and above. Projections indicate that this figure will rise to 12.7 million by 2050, leading to an increased demand for drugs and microbial APIs associated with Alzheimer's and other similar conditions.

The growth of the microbial API market is also due to rising demand for biological products, amino acids, and antibiotics. Furthermore, the rising need to meet nutritional requirements is expected to boost the adoption of microbial-sourced vitamins among end-users in the coming years. The demand for microbial APIs is boosted by their characteristics, which include non-toxicity, ready availability, and high specificity. These APIs find significant application in sectors such as pharmaceuticals, biotechnology, healthcare facilities, and research institutions. Moreover, the expanding use of microbial APIs in immunization against infectious diseases and their increasing applications in the pharmaceutical industry are contributing to the overall growth of this market.

Microbial fermentation has certain disadvantages, including variations in post-translational modifications that become particularly significant for more complex biologics. Fewer approved biologics are originating from hosts other than the Chinese hamster ovary, potentially leading to regulatory challenges for novel biologics produced through microbial fermentation. However, it is anticipated that these regulatory obstacles will diminish rapidly after the initial approvals are granted.

End-use Insights

The biopharmaceutical companies segment held a significant share of 54.70% in 2022. One of the main catalysts behind the renewed focus on fermentation is the progress made in the fields of molecular biology and synthetic biology. Synthetic biology, including the directed evolution of biosynthetic pathways, provides fresh and highly targeted methods for altering pharmaceutical manufacturing processes. The rapid advancements in molecular biology and engineering tools are poised to significantly influence fermentation within the pharmaceutical sector in the coming years. A high level of expertise is, however, necessary for the development of API through complete fermentation.

Pharmaceutical companies segment is anticipated to grow at a significant CAGR over the forecast period. The fermentation process is a major part of a pharmaceutical company’s portfolio, as the API obtained by fermentation is used in several therapeutic areas, including the development of antibiotics, anticancer, antifungal, immunosuppressant, cholesterol-lowering drugs, and drugs for other conditions. Key market players are dedicating their efforts to innovative plant-inspired medicines in next generation, harnessing the power of fermentation to manufacture complex APIs that were traditionally sourced from botanical origins.

This pioneering approach aims to establish a pathway for the production of APIs through fermentation, with the overarching goal of fostering more robust and sustainable supply chains for essential drugs and medicines. As these drugs progress through the various stages of development, optimizing the strains used in fermentation can yield substantial benefits, both at the product's launch and over time, by enhancing process efficiency and securing reduced production costs.

Molecule Insights

Innovative molecule segment held a significant share of 57.69% in 2022. An increase in funding and favorable regulations for R&D facilities are key factors driving the innovative API market. With the rising research initiatives in this field, many novel advanced products are now in their developmental phase and are expected to be launched over the forecast period. Moreover, the entrance of new players in this segment is expected to drive growth. Furthermore, increasing support from regulatory agencies for the approval of new drugs is projected to facilitate market growth, which can be attributed to an increase in the focus of government on healthcare and pharmaceuticals due to COVID-19.

Generic molecule segment is anticipated to grow at the fastest CAGR over the forecast period. The generic drug market is anticipated to exhibit lucrative growth in developing countries, such as India and Brazil, owing to the acceptance of OTC drugs and high unmet clinical needs. Generic HPAPI is also gaining share owing to cost-effectiveness, which allows them to cater to the needs of the rising number of patients in developing regions with low-income populations. According to the European Fine Chemicals Group, the major generic API manufacturing countries in Europe are Italy and Spain, with over 350 large and small companies in the region.

Regional Insights

Asia Pacific accounted for the largest share of 40.84% in 2022. The factors contributing to the market growth are the increasing geriatric population, improving healthcare infrastructure, and entry of new players. There is a high reliance of major players across the globe on Asian countries for the supply of API, which further boosts the overall market growth. However, setting up a fermentation API plant requires a high capital investment, and with only a few manufacturing plants being set up in the region, there are low production capabilities that hamper the regional market growth.

Europe is anticipated to grow at the fastest CAGR during the forecast period. The increasing prevalence of life-threatening diseases, local or regional presence of strong pharmaceutical companies, and highly developed healthcare infrastructure are some of the key factors driving the growth. In Europe, key therapeutic areas such as oncology, central nervous system, cardiovascular, anti-infective, & respiratory diseases held top market shares, and most pharmaceutical companies provide products in these therapeutic areas. Furthermore, the constantly rising demand for high-quality drugs due to strengthened economies, and improved healthcare infrastructure, aided by growing innovative fermentation technologies, is estimated to boost the growth.

Host Insights

Mammalian segment held the largest share of 47.14% in 2022 and is anticipated to grow at the fastest CAGR over the forecast period. The dominance of the segment is attributed to the wide adoption of mammalian host for the production of recombinant therapeutic proteins due to their ability to produce proteins that closely resemble human proteins. However, mammalian cells have more demanding requirements, including a richer growth medium, stringent growth conditions, and an extended growth period compared to microorganisms. Additionally, the process of introducing genes and developing clones in a mammalian system is more intricate than in a microbial system. Moreover, numerous transfection methods have been developed and tested to achieve successful gene introduction and pool generation with high transfection efficiency.

Bacterial segment is anticipated to grow at a significant CAGR over the forecast period, attributed to the bacterial host being a more economical method for the development of chemical API. Bacterial fermentation offers several benefits, such as reduced expenses for microbial hosts, more cost-effective growth media, and decreased susceptibility to contamination. The latter benefit translates to reduced operational disruptions and increased efficiency. Moreover, the optimization of microbial hosts occurs more rapidly, resulting in shorter development timelines for the final production strain, ultimately reducing overall production time. Fermentation plays a pivotal role in various therapeutic applications currently under development. One notable example is the utilization of E. coli-produced plasmid DNA, which can serve as both a therapeutic agent and an intermediary component for crafting mRNA vaccines, gene therapies, and facilitating gene-editing processes.

Type Insights

Antibody segment held a dominant revenue share of 31.61% in 2022. Antibodies are protein molecules manufactured in the laboratory with the help of recombinant DNA techniques. They are derived from the immune system and recognize specific targets, such as cancer cells, viruses, bacteria, etc. Antibodies stimulate the immune system and, hence, are preferred over APIs in medical products. Application of these APIs is rising in the field of oncology, which has led to an increase in investments in these products. Companies such as Lonza are focusing on developing novel APIs to gain market share. A major trend in the segment is contract and custom manufacturing of API, which can be attributed to the need for complex manufacturing and sterile facilities.

Peptide segment is expected to grow at the fastest CAGR over the forecast period. Peptides developed from recombinant DNAs are known as recombinant proteins. They are significantly being adopted in gene sequencing, especially to make antibody probes within cells. Thus, they find wide applications in targeted therapies. These proteins play an important role in the development of novel therapeutics, such as cell therapy. However, there is a limited number of players in the field, leading to inadequate supply for current and future demands.

Site Insights

Outsourced segment held the largest share of 58.85% in 2022. Recently, many pharmaceutical manufacturers shifted their focus toward external service providers for R&D and manufacturing services. The growth in demand for customized products, the need for enhanced productivity and efficiency across the value chain, and continuous pressure from regulatory bodies on drug pricing have compelled pharmaceutical companies to rely majorly on outsourcing drug development processes. In addition, pharmaceutical companies focus on reducing expenses during formulation development, API manufacturing, analytical & testing services for solid dose manufacturing, and clinical trials management, which is propelling the need for the adoption of outsourcing services.

In-house is the fastest-growing segment. The in-house type of drug development allows key companies to have better control over the quality and quantity of the products. This drug development type also allows companies to easily change the scope, adjust timelines, and alter the volume of drug products according to the demand in the market. In-house production maintains the quality control of the products. Moreover, the product of drugs in their facilities keeps the intellectual property of the company safe, thereby minimizing the risk of critical product information loss, which is one of the major issues in outsourcing.

Key Companies & Market Share Insights

Companies are adopting strategic initiatives such as acquisitions, collaborations, mergers, strategic agreements, and clinical studies for product portfolio expansion to expand their market share. To maintain their presence in the microbial API market, industry players are also focusing on geographic expansion and the development of novel products. For instance, in July 2023, Kinvan Private Limited, the first API fermentation unit, was set up in the Plassara Industrial Area of Nalagarh with an investment of USD 55.2 million (Rs 460 crore) to promote domestic manufacturing in India.

Microbial API Market Report Scope

Global Microbial API Market Report Segmentation

This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global microbial API market report based on host, type, site, end-use, molecule, and region:

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

  • Mammalian

  • Bacterial

  • Fungal

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

  • Antibody

  • Peptide

  • Protein

  • Small Molecule

  • Vaccine

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

  • In-house

  • Outsourced

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Pharmaceutical Companies

  • Biopharmaceutical Companies

  • Others

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

  • Innovative

  • Generic

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

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Denmark

    • Sweden

    • Norway

  • Asia Pacific

    • Japan

    • China

    • India

    • South Korea

    • Australia

    • Thailand

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait