2023 Biologics & Advanced Therapies Contract Manufacturing Report: Executive Summary
Driving robust innovation, growth, and investment in a changing landscape
In recent years, Biologics and Advanced Therapies (ATs) have emerged as the primary drivers of innovation within the pharmaceutical industry. This area has produced blockbuster drugs and holds promising prospects in areas with significant unmet medical needs, such as immunology and immuno-oncology.
As Biologics and ATs explode in demand, the Biologics and ATs CDMO market is projected to witness robust growth, as captured in Alira Health’s 2023 Biologics & Advanced Therapies Contract Manufacturing Report, escalating from $18.6 billion in 2022 to $36.0 billion in 2027, at a Compound Annual Growth Rate (CAGR) of 14.1%. This expected growth is leading major CDMOs to invest significantly to scale up capacity and adapt manufacturing processes.
Biologics and Advanced Therapies Market Landscape
The Biologics and ATs CDMO market landscape continues to be fragmented. Large and medium-sized CDMOs dominate the market, generating nearly 90% of total revenues, while small and micro manufacturers contribute only 10% to the global outsourcing output and are characterized by chronic capacity constraints as demand keeps outpacing supply. This provides a wide array of acquisition opportunities for strategic and financial investors.
The swift shift of pharmaceutical innovation towards biologics and ATs has drawn the attention of specialized contract research and manufacturing organizations, non-healthcare entities, and private equity giants like KKR, Permira, and Warburg Pincus, who are all attracted by the potential high returns. Merger and acquisition (M&A) activities in the biologics CDMO sector saw a surge in 2021 and 2022, compared to pre-pandemic years.
Geographically, North America and Europe continue to dominate in biologics and ATs manufacturing, yet the significance of the Asia-Pacific region is anticipated to rise due to the innovation in biosimilars, favourable government policies, and the expected widespread adoption of biologic therapies in the future.
Biologics and Advanced Therapies Market Trends
As the Biologics and ATs market continues to expand, CDMOs are increasingly focused on the integration of their services, positioning them as indispensable partners for developers and pharmaceutical companies to mitigate risks and manage capacity with products that are more unstable and difficult to analyze compared to small molecule drugs, have strict temperature and advanced track and trace requirements, and require cold-chain logistics. CDMOs seeking to boost their growth are adopting horizontal integration strategies to provide manufacturing and analytical services at various stages, and vertical integration to cater to diverse customer needs throughout the product lifecycle. Traditional CDMOs are also venturing into new domains of biologics manufacturing, such as viral vectors and plasmid manufacturing, which promise considerable growth potential. Overall, the market demonstrates a clear preference for an end-to-end CDMO approach, which lessens the time and risks involved in successful API production while effectively managing supply chain and cold chain logistics.
In summary, driven by global adoption of biologics and ATs, the pharmaceutical CDMO market will experience sustained growth over the next five years. Players looking to become market leaders in biologics and ATs manufacturing should integrate and expand their capabilities.
Learn more, including an in-depth market analysis, detailed examination of transactional activity, and insight on the development of Biologics and ATs CDMO services, by downloading our 2023 Biologics & Advanced Therapies Contract Manufacturing Report.