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    Breaking News

    New Report Sees CMO Growth

    Injectables to lead the way, Asia to emerge as solid dosage destination?

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    Gil Roth08.28.13
    A new research analysis from Frost & Sullivan, Global Pharmaceutical Contract Manufacturing Market, contends that CMOs earned revenue of $13.4 billion in 2012 and projects that the industry will reach $18.5 billion in 2017, an compound annual growth rate of 5.5%. The report covers solid dose, liquid and semi-solid dose, and injectable dose formulations.

    According to F&S, cost benefits and pharma companies' desire to focus on their core competencies has created an increasing need for outsourcing and spurred the global CMO market, while expiring blockbuster drug patents will reduce manufacturing capacity utilization rates and boost outsourcing further.

    "Investments and capacity expansions in the injectable dose formulation segment are in the near future, as it is likely the most significant source of income for the global pharmaceutical contract manufacturing industry," said Frost & Sullivan healthcare research analyst Aiswariya Chidambaram. "Cytotoxics manufacturing, in particular, offers immense growth potential, given the demand from the cancer research and therapy segments."

    Pharmaceutical and biotechnological emphasis on complex disease areas, trends in disease control, growth in emerging markets, and reformulation of existing products have widened the scope of the contract manufacturing market. According to F&S, CMOs in India, China and Singapore will likely emerge as favorable destinations, particularly for solid dose formulations, due to the potential for cost savings.

    The new analysis notes that the industry remains highly fragmented, with many CMOs relying on a single client for more than 50% of their revenue. "Coupled with huge tax incentives and lower inventories for low-volume products, this creates immense pricing pressures for CMOs," according to F&S, which also notes that CMOs are trying to build a value proposition by adding early-stage projects and establishing long-term relationships. The analysis also notes, "Promoting additional services such as formulation improvements, alternate dose forms, real-time order tracking, and logistics support will also be necessary to attract new customers."

    "Consolidation in the form of acquisitions and strategic alliances to gain access to new, emerging markets and niche segments will be crucial for both small and large CMOs," concluded Ms. Chidambaram. "Large CMOs can broaden their geographic presence, while small CMOs can leverage the technical expertise and resources of large CMOs to enlarge their footprint.

    For more information on Global Pharmaceutical Contract Manufacturing Market, visit www.lifesciences.frost.com.
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