Entering 2025, the CDMO industry is at a crossroads. Reflecting on conversations over the past year—with CEOs navigating supply chain turbulence, R&D heads pushing the boundaries of technology, and startup founders hungry for their first clinical breakthroughs—I’m struck by how rapidly our industry is evolving driven by digital technology.

One of the most telling moments for me last year was a conversation with a veteran CDMO executive. She shared how their firm had to pivot overnight when a key supplier shut down unexpectedly. What would have been a six-month problem five years ago was solved in just weeks, thanks to digital twin simulations and real-time supplier analytics.

The takeaway: Companies that resist this digital wave? They’ll struggle to keep up.

At the same time the explosion of biotech innovation, particularly in cell and gene therapies, is both an opportunity and a challenge. On one hand, there’s no shortage of groundbreaking discoveries; on the other, manufacturing capacity is struggling to keep up. I recently spoke with the founder of a mid-sized CDMO specializing in viral vectors, and he described the constant balancing act between scalability and maintaining quality standards. “You can’t just flip a switch and add capacity overnight,” he told me. “Every new project is a puzzle, and there aren’t enough pieces.”

This manufacturing bottleneck is one of the biggest issues in 2025. CDMOs that can expand intelligently—whether through modular facilities, strategic partnerships, or automation—will have a competitive edge. Meanwhile, expect increased M&A activity as larger players scoop up specialized firms to fill capability gaps.

But let’s not forget small molecules. Sure, biologics are stealing the show, but small molecule drugs still dominate the market. Advances in continuous manufacturing are making production faster, cheaper, and cleaner. I’ve seen CDMOs increasingly offering hybrid capabilities—handling both small molecules and biologics under one roof. That’s a smart play. Clients want one-stop shops, and those who can bridge both worlds will stand out.

Talent is another major challenge. Every CDMO I talk to is feeling the talent crunch—bioprocess engineers, data scientists, regulatory experts. The competition is cutthroat. Companies that invest in workforce development, offering real career growth and fostering a culture of innovation, will attract and retain the best people. Otherwise, they risk falling behind.

Then there’s the GLP-1 drug boom. These diabetes and weight loss medications have exploded in popularity, creating a gold rush for CDMOs specializing in peptide synthesis and injectable formulations.

Lastly, there’s the BIOSECURE Act, which was all everyone I talked to was talking about on the show floor and in meetings at CPHI Milan in October. By the end of the year, however, it stalled and was not enacted into law. That’s not to say it can’t get legs again in 2025. If passed, it could reshape pharmaceutical supply chains, pushing production away from China and back into the U.S. and allied nations. That means CDMOs with domestic facilities could see a surge in demand. But reshoring isn’t easy—it takes major investments in infrastructure and brings us back to the aforementioned talent problem.

So, what’s the takeaway? 2025 is all about adaptability. The CDMOs that embrace innovation, flexibility, and talent development will be the ones leading the charge. Let’s see who rises to the challenge.

Tim Wright, Editor

twright@rodmanmedia.com