Global Active Pharmaceutical Ingredients CDMO Market Size

Active Pharmaceutical Ingredients CDMO Market Analysis

The Global Active Pharmaceutical Ingredients CDMO Market size is estimated at USD 118.09 billion in 2024, and is expected to reach USD 178.47 billion by 2029, growing at a CAGR of 8.61% during the forecast period (2024-2029).

The COVID-19 pandemic had a huge impact on the API CDMO market. As the vaccines and therapeutics for the coronavirus were rolled out globally, the demand for CDMO services skyrocketed. CDMOs went to great lengths to meet the needs of their pharmaceutical customers during the crisis. CDMOs provide a broad range of services to pharmaceutical companies, such as drug development and supply chain, commercial API and drug manufacturing, and packaging. These services permit pharmaceutical firms to reduce their development and manufacturing costs, along with capital investments and timelines, while benefiting from the most advanced technologies.

For instance, in the first half of 2021, there was marked participation of CDMOs in COVID-19 vaccine manufacturing and robust merger acquisition activities. It also highlighted the indispensability of CDMOs in the bio/pharmaceutical industry. This has been vital to the successful launch of vaccines and therapies to combat the COVID-19 virus.

According to the Drug, Chemical & Associated Technologies Association Inc. (DCAT) Value Chain Insights on "Mid-Year CDMO Review: COVID-19 Vaccine Manufacturing and M&A", in the first months of the pandemic, less than 10 CDMOs were known publicly to be working with the bio/pharma companies and government agencies to develop and manufacture vaccines. Contracts were going to CDMOs that had the accessible capacity or could expand it rapidly, including Catalent and Lonza. CDMOs were engaged in producing the vaccine's active ingredients and key excipients. The demand for vaccine capacity elevated the status and profiles of many CDMOs that were earlier dependent on the older products and generics. Some companies, for instance, Rovi Contract Manufacturing, have got both drug substance and drug product contracts.

Besides, the first half of 2021 also saw a high number of merger and acquisition activities as investors sought to buy their way into the industry and incumbents sought to broaden and deepen their capabilities. A total of 32 deals were announced or closed during the first five months of 2021. Out of these, five deals were for small molecule API businesses and four for large molecule API assets.

Outsourcing to CDMOs can also offer companies access to a flexible workforce, including highly-specialized experts. In recent times, increased outsourcing to CDMOs has been seen for drug owners from pharmaceutical to biopharmaceutical companies, from small to large firms, and for early to late-stage development projects.

The quality of APIs has a noteworthy effect on the efficacy and safety of medications. Hence, selecting a CDMO that can provide the precise API at the required strength, purity, and quality is a vital decision for drug development companies.