Small Molecule API Market Size, Share & Trends Analysis Report By Type (Synthetic, Biotech), By Application (Oncology, Pulmonology, CNS, Endocrinology), By Manufacturer, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global small molecule API market size was valued at USD 175.31 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 5.44% from 2022 to 2030. Some of the major factors propelling the market are the growing demand for small molecule drugs in the market and the increased outsourcing trend. The patent expiry of leading molecules is further driving growth by facilitating the entry of new players that propel the demand for raw materials like API for low-cost production of drugs.

The COVID-19 pandemic has facilitated the growth of the market by prompting the players to diversify their business geographically to avoid shortages. COVID-19 is further propelling investigation of small molecule products such as Molnupiravir for treatment of the condition. Repurposing of existing small molecule drugs is also under study for the treatment of SARS-CoV-2 infection.

Small molecules are anticipated to dominate the market as a technology, owing to the presence of a strong pipeline in which over two-thirds of the small molecule-based products are on accelerated pathways and are expected to enter the market in the upcoming years. As of October 2021, 58% of molecules in the drug development process are small molecules. This demonstrates a huge opportunity for contract manufacturers in the market.

Increased use of novel technologies and the emergence of specialty medicines are expected to lead to a paradigm shift in the industry. Instead, small volume production is projected to witness a surge. Moreover, with an increasing number of products being launched and produced, flexible manufacturing units and robust processes are being developed to meet changing demands.

The complexity of manufacturing is evolving towards increasingly complex molecules, thus creating the requirement for more compound manufacturing facilities. This is also in line with a pipeline that holds 30% of highly potent active pharmaceutical ingredients (HPAPI) along with the surge in demand for highly potent molecules.

Type Insights

The synthetic segment dominated the market in 2021, attributable to the dominance of synthetic drugs in the pharmaceutical industry that propels the demand for raw materials such as small molecule APIs for production. Furthermore, the ease of production of these molecules and high effectiveness boost the segment growth.

The presence of many players in the synthetic segment is accelerating its growth. Moreover, an increasing number of players are aiming at backward integration and building new manufacturing plants to increase efficiency. The biotech segment is projected to grow at a lucrative rate, attributable to a rising focus on targeted therapies, along with a surge in demand for biotech-based products.

Manufacturer Insights

The in-house segment accounted for the largest revenue share in 2021, owing to a high number of companies manufacturing their API themselves, making them less reliant on suppliers for raw materials. For instance, in September 2021, AstraZeneca announced an investment of USD 360 million in an API manufacturing facility in Ireland for the commercialization of new products.

Outsourcing has been growing at a steep rate, which can be attributed to the increasing number of molecules being approved that require complex manufacturing processes. Moreover, most of these molecules belong to micro and small-sized companies that highly depend on CDMOs for commercial production of API. This has increased the movement in the CDMO industry, and major players have increased their capacities to meet industry demands.  

Application Insights

The cardiology segment accounted for the largest share in 2021. This is on account of the increasing prevalence of cardiovascular conditions globally, owing to changes in lifestyle and food habits. Moreover, increased adoption of treatment for cardiovascular conditions is accelerating the market growth for the segment.

The oncology segment is projected to grow at the fastest rate during the forecast period due to a surge in the prevalence of cancer. The presence of a lucrative pipeline and increase in demand for cancer drugs is creating a pull for oncology API in the market. Players such as Heraeus Pharmaceutical Ingredients have announced the expansion of their production capabilities in the cancer active ingredients segment.

Regional Insights

North America accounted for the largest market share in 2021. The presence of favorable government initiatives, coupled with the increased interest of players in the region, is anticipated to propel the North American market. For instance, in November 2020, Cambrex announced an investment of USD 50 million for the expansion of its large-scale manufacturing in the U.S. The facility is aimed at meeting the continually surging demand for small molecules.

Asia Pacific is estimated to be the fastest-growing segment during the forecast period due to improvements in overall healthcare infrastructure, improved access to healthcare, and the presence of local manufacturers in large numbers. These players supply globally and make Asia Pacific a key region for the production of small molecule API at a low cost. Increasing government support in nations such as India for investing in API business is further accelerating the growth of the region. In March 2022, Lonza announced the completion of the expansion of its laboratory in China’s API manufacturing facility, which allows the company to focus on small molecule high potency APIs.

Key Companies & Market Share Insights

The leading players are focusing on growth strategies, such as innovations in the existing product, frequent expansions in production capacity, and mergers & acquisitions. An increase in the capacity of production plants is becoming a key strategy of the players to meet the escalating demands of the pharmaceutical industry. For instance, in March 2022, Sumitomo Chemical Co., Ltd. announced its investment to build a new manufacturing facility in Japan to meet the surge in demand for high-quality small molecule APIs and intermediates. Some major players in the market include:

• Merck & Co., Inc.

• AbbVie, Inc.

• Bristol-Myers Squibb Company

• Albemarle Corporation

• Boehringer Ingelheim International GmbH

• Cipla, Inc.

• Teva Pharmaceutical Industries Ltd.

• Viatris Inc.

• Dr. Reddy’s Laboratories Ltd.

• Aurobindo Pharma

• Sun Pharmaceutical Industries Ltd. 

Small Molecule API 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 2018 to 2030. For this study, Grand View Research has segmented the global small molecule API market report based on type, manufacturer, application, and region:

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

  • Synthetic

  • Biotech

• Manufacturer Outlook (Revenue, USD Billion, 2018 - 2030)

  • In-house

  • Outsourced

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

  • Cardiology

  • Oncology

  • CNS and Neurology

  • Orthopedic

  • Endocrinology

  • Pulmonology

  • Gastroenterology

  • Nephrology

  • Ophthalmology

  • Others

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

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

    • Russia

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE