A new industry report says that growth of the bio/pharmaceutical contract manufacturing sector is likely to be suppressed near-term, despite an increase in the number of product approvals, due to shrinking product volumes and high levels of capital investment by bio/pharmaceutical companies.

According to PharmSource Information Services Inc., although contract manufacturing of bio/pharmaceutical finished dose forms grew at twice the rate of the overall industry during the 2012-2014 period, contract manufacturing organizations (CMOs and CDMOs) and their investors should be alerted that recent growth rates are unlikely to be sustainable.

The new report, “Contract Dose Manufacturing Industry by the Numbers: Composition, Size, Market Share, Profitability and Outlook–2015 Edition,” provides analysis of the future of the dose CMO business.

The analysis derived from PharmSource’s proprietary database of global contract manufacturers reflects the company’s deep knowledge of contract drug development and manufacturing, as well as its relationships with the industry’s leading participants.

According to the report’s findings:

• The contract dose manufacturing industry generated revenues of $16.8 billion in 2014;

• Acquisitions of facilities from bio/pharmaceutical companies were responsible for a significant share of industry growth;

• The industry is increasingly consolidated, with just 16 CMOs out of a universe of 221 companies accounting for 50% of industry revenues; and

• Going forward, CMO industry growth will be challenged by the captive capacity now being built by bio/pharmaceutical companies, along with shrinking unit volume per product, fewer opportunities to acquire bio/pharma company facilities, and increasing efforts to control drug costs.

The information in this report is designed to help CMOs and their investors make informed critical strategic decisions. Bio/pharmaceutical sourcing and procurement executives will find this intelligence invaluable for assessing their current CMO network and developing long-term sourcing strategies. For more information click here.