GVR Report cover U.S. Small Molecule Innovator API CDMO Market Size, Share & Trends Report

U.S. Small Molecule Innovator API CDMO Market Size, Share & Trends Analysis Report By Stage Type (Preclinical, Clinical, Commercial), By Customer Type, By Therapeutic Area, By Region, And Segment Forecasts, 2024 - 2030

  • Report ID: GVR-4-68040-297-9
  • Number of Report Pages: 150
  • Format: PDF, Horizon Databook
  • Historical Range: 2018 - 2022
  • Forecast Period: 2024 - 2030 
  • Industry: Healthcare

Market Size & Trends

The U.S. small molecule innovator API CDMO market size was estimated at USD 8.20 billion in 2023 and is projected to grow at a CAGR of 6.17% from 2024 to 2030. Key growth drivers include rising outsourcing by pharmaceutical companies, demand for small-molecule drugs, and number of clinical trials. In addition, rising pharmaceutical R&D investment to expand the development of new small-molecule innovator APIs, increasing demand for novel therapies, and growing prevalence of cancer and age-related disorders are among the key factors driving market growth. 

U.S. Small Molecule Innovator API CDMO Market size and growth rate, 2024 - 2030

The growing prevalence of rare diseases, the presence of well-established pharmaceutical companies, increasing demand for new drugs, and the expansion of new facilities in U.S. are some of the major factors expected to drive market growth over the forecast period. Similarly, the trend of drug discovery and emerging R&D activities are expected to change market scenarios at a rapid rate. For instance, in March 2023, Catalent, Inc. collaborated with Grünenthal for an orally dosed small molecule in Grünenthal’s pipeline. This collaboration broadened the company’s operational capabilities in the market.

Small-molecule drugs continue to dominate the drug development pipeline in the pharmaceutical industry, leading companies to focus on developing new small-molecule drugs to address various medical needs; they require the services of API CDMOs to manufacture these active ingredients efficiently and cost-effectively. In 2023, the U.S. FDA approved 55 novel drugs, marking a surge of approximately 50% over the 37 approvals in the previous year. It was the second-highest count observed over the past three decades. Of the 55 newly endorsed drugs, 34 were categorized as small molecules, constituting 62% of the total. This upsurge in small molecule approvals is consistent with previous years; they accounted for 56% in 2021 (28 out of 50) and 57% in 2022 (21 out of 37).

The pharmaceutical & biotechnology industries and CDMOs based in the U.S. attract major investments due to the prevalence of oncological, cardiovascular, respiratory, infectious, and other diseases is increasing in the U.S. This trend is likely to create new growth opportunities for CDMOs to develop new small molecule innovator API drugs. As a result, several pharmaceutical companies and CDMOs are merging and acquiring others to expand their service offerings, geographic presence, & capabilities, which is expected to drive the U.S. market. These CDMOs offer services throughout the processing stages, from supporting R&D & manufacturing efforts for novel medicines to providing formulation & finishing processes.

The growing R&D of small-molecule drugs has increased demand for contract development and manufacturing services. The local presence of several established pharmaceutical, biotechnology, and CDMO entities and the increasing number of clinical trials are key factors expected to contribute to market growth in the U.S. Besides, the U.S. regional entities are focused on small-molecule innovator API transactions with expansion and capacity deals in novel therapeutics, which mostly include acquiring new capabilities.

The global distribution of clinical trials is expected to boost the market growth in the coming years. As of February 2024, the global count of registered clinical trials on ClinicalTrials.gov is 483,592, reflecting a noteworthy increase compared to the reported over 365,000 registered trials in early 2021. Among the current number, 66,206 trials actively recruit participants. This expansion underscores the continual growth of the clinical research landscape. Several factors contribute to the rise in registered studies, including advancements in medical technology, an upsurge in diseases under investigation, and the imperative for novel treatments. Global health crises, particularly the COVID-19 pandemic, have further underscored the need for rapid and extensive clinical research efforts.

Market Concentration & Characteristics

Market growth stage is stable and is expected to accelerate over the estimated period. The U.S. market is characterized by technologies, regulatory considerations, and globalization & outsourcing of product processes to influence advantages and specialized capabilities.

U.S. Small Molecule Innovator API CDMO Market Concentration & Characteristics

The small molecule innovator API product innovations continuously evolve to meet the industry’s demands for innovation, efficiency, and regulatory compliance. Several advancements have shaped lead optimization, formulation development, and process optimization. 

The regulatory body plays a crucial role in the small molecule innovator API CDMO market by establishing & enforcing regulations related to drug development, manufacturing, distribution, and marketing. These regulations cover various aspects, such as GMP, quality control standards, labeling requirements, and pharmacovigilance.  

U.S. market players leverage strategies such as collaborations, partnerships, and acquisitions to promote the reach of their offerings and increase their product capabilities globally. For instance, in October 2023, Cambrex Corporation concluded a USD 38 million-capacity expansion of its small molecule API manufacturing facility in North Carolina. This enhancement resulted in a twofold increase in the facility’s manufacturing capacity. The expansion included innovative analytical & chemical development laboratories, two additional clinical manufacturing suites, and the establishment of a small-scale commercial manufacturing operation featuring three work centers and 2,000 L reactors. 

The increasing number of mergers and acquisitions, R&D activities, and growing disease burden can positively influence market dynamics. 

The local presence of several established pharmaceuticals, rising clinical studies, technologically advanced formulation development, and demand for small molecule innovator API products fuel market growth. 

Stage Type Insights

Based on stage, the market is segregated into preclinical, clinical, and commercial. The clinical segment led the market with the largest revenue share of 54.79% in 2023. The clinical segment is further sub-segmented into Phase I, Phase II, and Phase III. The segment growth is driven by the growing small molecule product pipeline and the launch of new drugs. For instance, Lonza stated that in the clinical phase, small molecules represent the largest single drug class, which accounts for more than half of clinical pipelines and more than 40% of the biopharmaceutical market by revenue across the globe. This has led to increasing requirements for clinical services among pharmaceuticals & biopharmaceuticals as clinical research helps in research-stage investigations and advances through clinical trials.

In clinical segment, the Phase III trials dominated the market in 2023. These trials are essential to confirm a new drug's efficacy and assess its safety for its registration & post-marketing commitments. Besides, the data collected during Phase III trials determines the drug's labeling and any post-marketing commitments the manufacturer must fulfill. These factors are expected to drive the segment growth.

The preclinical segment is anticipated to grow at a lucrative CAGR over the forecast period. Small molecule drug candidate screening plays an essential role in drug discovery. This factor has increased the number of preclinical candidates, boosting the drug development pipeline with a greater number of preclinical trials. For instance, in August 2023, Astex announced a research collaboration & license agreement with MSD to classify small molecule candidates with tumor suppressor proteins for cancer treatment. Such factors are anticipated to drive the market growth.

Therapeutic Area Insights

Based on the therapeutic area segment, the market is segregated into cardiovascular diseases, oncology, respiratory disorders, neurology, metabolic disorders, infectious diseases, and others. The oncology segment led the market with the largest revenue share of 42.05% in 2023 and is expected to grow at the fastest CAGR of 6.59% during the forecast period. The segment is expected to grow due to the number of cancer cases, rising pharmaceutical R&D investments, and growing requirements for oncology drugs & biologic innovations. For instance, the Cancer Atlas predicts that there will be 29 million cancer cases globally by 2040. In addition, the market is driven by rising government reimbursement policies & financing opportunities for developing small-molecule oncology therapies. For instance, in May 2023, PharmEnable announced the closing of a Pre-Series an investment round of USD 7.5 million to develop the next-generation small molecule drugs for disease areas with high clinical need. This investment can help expand PharmEnable’s portfolio across neurology & oncology targets and support R&D. Such factors are expected to drive the market over the forecast period.

U.S. Small Molecule Innovator API CDMO Market share and size, 2023

The neurology diseases market has witnessed dynamic trends and scenarios across various disease segments. In recent times, neurology treatment modules have experienced notable progress, with significant strides in research, new drug development, and therapeutic approaches. Among these, central nervous system APIs are an emerging field. These small molecules are a crucial subgroup of pharmaceutical APIs that target the intricate workings of the nervous system. They play a pivotal role in managing various neurological conditions & disorders. Therefore, leading pharmaceutical companies have been actively developing groundbreaking small-molecule drugs to tackle the intricate complexities of these disorders, which is expected to drive the market. For instance, in August 2022, Societal CDMO, Inc. announced that the company had secured CDMO service contracts from three new customers. These contracts cover a variety of services, including analytical method & formulation development, clinical trial services, and cGMP manufacturing.

Customer Type Insights

Based on customer type segment, the market is segregated into pharmaceutical and biotechnology. The pharmaceutical segment led the market with the largest revenue share of 91.89% in 2023. Some of the key factors contributing to growth are increasing demand for standard drugs, emerging small molecule APIs in the pipeline, and rising requirements for CDMOs among pharmaceutical companies to develop novel small molecule innovator APIs is expected to boost the small molecule innovator API CDMO market over the forecast period. Furthermore, rapid advancements in structure-based design, prediction, imaging, automation, Artificial Intelligence (AI), and machine learning have become major enablers for small molecule-led optimization to increase speed and enhance success rates in pharmaceutical companies.

On the other hand, the biotechnology segment growth can be attributed to rising innovative products, ranging from genomic medicines to immunotherapies for various diseases. This has led to a rise in demand for various small molecule API products. Moreover, biotechnology companies have product portfolios of small to midsized range of compounds in a particular therapeutic indication to bring these novel therapies to market. This is expected to increase the need for small molecule innovator API CDMO services among biotechnology companies. 

Regional Insights

Northeast Small Molecule Innovator API CDMO Market Trends

The small molecule innovator API CDMO market in Northeast held a significant share in 2023. The Northeast segment includes New Jersey, New York, and the rest of the Northeast. CDMO services in these regions specialize in formulation development & commercial services for products. For example, to meet the requirements of pharmaceutical and biotechnology companies, the New Jersey CDMO market exhibits expertise & capability to provide the outsourcing of essential resources. In January 2024, Enzene Biosciences, a subsidiary of Alkem Labs, launched a manufacturing site in New Jersey. The company aims to become a CDMO partner for U.S. biotech firms, helping them bring promising molecules to market. 

The New Jersey small molecule Innovator API CDMO market held the largest share in 2023. New Jersey is one of the key U.S. states in terms of pharmaceutical workforce. The local pharmaceutical companies often depend on CDMOs for clinical trial and research support services. Such factors are anticipated to create major requirements for CDMO services in the U.S. 

Midwest Small Molecule Innovator API CDMO Market Trends

The small molecule innovator API CDMO market in Midwest is expected to witness at the fastest CAGR over the forecast period. The Midwest segment includes Illinois, Missouri, North Carolina, and the rest of the Midwest. Innovations in these regions are expected to drive the market. For instance, in February 2021, Regis Technologies, Inc. announced the expansion of its laboratory facilities to develop APIs in Illinois. The expansion would double the company’s capacity to develop new projects and increase its custom pharmaceutical service offerings, including solid-state chemistry, analytical development, validation, process chemistry, stability studies, and commercialization. 

The Illinois small molecule innovator API CDMO market held the largest share in 2023, owing to growing innovations of new drugs for patients, which has led to a rise in the requirement for small molecule API in the state. 

West Group Small Molecule Innovator API CDMO Market Trends

The West Group dominated the U.S. small molecule innovator API CDMO market with the largest revenue share of 33.19%in 2023. The West segment is divided into California, Washington, and the rest of the West Group. With several companies expanding their manufacturing facilities to cater to the rising demand for small molecule innovator API CDMO, the market is expected to witness significant growth over the forecast period. For instance, in March 2023, LGM Pharma, an API & CDMO services provider for the drug product lifecycle, reported strong growth in 2022 in the API and new CDMO divisions. Previously, in 2020, the company acquired the company’s CDMO division, with full operational integration in late 2021 for commercial manufacturing and two new CDMO service segments, including drug product R&D and analytical testing services. Such factors are likely to drive the market. 

The small molecule innovator API CDMO market in California held the largest share in 2023, owing to increasing clinical trials and research studies. In addition, constant strategic initiatives, such as innovation and acquisition, the market is anticipated to grow rapidly over the estimated period are some key factors anticipated to propel market growth during the forecast period. 

The Washington small molecule innovator API CDMO market is anticipated to grow at the fastest CAGR over the forecast period. Washington is considered a lucrative market for pharmaceutical companies due to competitive market scenarios such as R&D activities and market expansion to enhance the global footprint in the state, boosting the client base in the pharmaceutical industry. Moreover, various CDMOs in the country are anticipated to contribute to market growth. 

Key U.S. Small Molecule Innovator API CDMO Company Insights

The key players operating across the U.S. market are adopting in-organic strategic initiatives such as partnerships, mergers, and acquisitions, etc. The strategies adopted by companies are mergers & acquisitions/joint ventures merger, service launches, partnership & agreements, expansions, and others to increase market presence & revenue and gain a competitive edge drives the market growth. Hence, increasing adoption of in-organic strategic initiatives is highly anticipated to boost market share of prominent players operating across the market. 

Key U.S. Small Molecule Innovator API CDMO Companies:

  • Lonza Group Ltd.
  • Novo Holdings (Catalent, Inc.)
  • Thermo Fisher Scientific, Inc.
  • Siegfried Holding AG
  • Recipharm AB
  • CordenPharma International
  • Samsung Biologics
  • Labcorp
  • Ajinomoto Bio-Pharma Services
  • Piramal Pharma Solutions
  • Jubilant Life Sciences (Jubilant Biosys Limited)
  • WuXi AppTec Co., Ltd.

Recent Developments

  • In February 2024, BioVaxys company announced the acquisition of IMV portfolio of discovery, preclinical & clinical development-stage from IMV Inc., Immunovaccine Technologies, & IMV USA. These were developed in infectious disease, oncology, antigen desensitization, & other immunological fields based on IMV’s DPX immune educating platform technology

  • In May 2023, CordenPharma announced expanding its synthetic oligonucleotide manufacturing in the U.S. The two-phase investment would provide biotech & pharma customers with an API-to-drug-product service offering

  • In January 2022, Recipharm announced the sale of the Fontaine-lès-Dijon site to Astrea Pharma, a CDMO provider dedicated to solid dose manufacturing of small molecule oral solid & aseptic dosages 

U.S. Small Molecule Innovator API CDMO market Report Scope

Report Attribute

Details

Market size value in 2024

USD 8.80 billion

Revenue forecast in 2030

USD 12.60 billion

Growth rate

CAGR of 6.17% from 2024 to 2030

Base year for estimation

2023

Historical data

2018 - 2022

Forecast period

2024 - 2030

Quantitative units

Revenue in USD million/billion and CAGR from 2024 to 2030

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Stage type, customer type, therapeutic area, region

Regional scope

Northeast; Midwest; West Group; South

Country scope

New Jersey; New York; Illinois; Missouri; California; Washington; Texas; Florida

Key companies profiled

Lonza Group Ltd.; Novo Holdings (Catalent, Inc.); Thermo Fisher Scientific, Inc.; Siegfried Holding AG; Recipharm AB; CordenPharma International; Samsung Biologics; Labcorp; Ajinomoto Bio-Pharma Services; Piramal Pharma Solutions; Jubilant Life Sciences (Jubilant Biosys Limited); WuXi AppTec Co., Ltd

Customization scope

Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope.

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U.S. Small Molecule Innovator API CDMO Market Report Segmentation

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 U.S. small molecule innovator API CDMO market report based on stage type, customer type, therapeutic area, and region.

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

    • Preclinical

    • Clinical

      • Phase I

      • Phase II

      • Phase III

    • Commercial

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

    • Pharmaceutical

      • Small

      • Medium

      • Large

    • Biotechnology

      • Small

      • Medium

      • Large

  • Therapeutic Area Outlook (Revenue, USD Million, 2018 - 2030)

    • Cardiovascular Diseases

    • Oncology

    • Respiratory Disorders

    • Neurology

    • Metabolic Disorders

    • Infectious Diseases

    • Others

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

    • Northeast

      • New Jersey

      • New York

    • Midwest

      • Illinois

      • Missouri

    • West Group

      • California

      • Washington

    • South

      • Texas

      • Florida

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