Biopharmaceutical CMO Market Size, Share & Industry Analysis, By Service (Manufacturing {Upstream Processing and Downstream Processing}, Fill & Finish Operations, Analytical & QC Studies, and Packaging), By Source (Mammalian and Non-Mammalian), By Product (Biologics and Biosimilars), and Regional Forecast, 2024-2032

The global biopharmaceutical CMO market size was valued at USD 15.32 billion in 2023. The market is projected to be worth USD 17.56 billion in 2024 and reach USD 57.34 billion by 2032, exhibiting a CAGR of 15.9% during the forecast period. Moreover, the U.S. biopharmaceutical CMO market size is projected to grow significantly, reaching an estimated value of USD 21.43 billion by 2032, driven by the presence of a higher number of manufacturing facilities provided by CMOs across the region, coupled with opening new manufacturing facilities in the U.S.

A biopharmaceutical CMO is referred to as a contract manufacturing organization that helps biotechnology and pharmaceutical companies manufacture their innovative drug substances. These organizations serve other companies in their biopharmaceuticals division on a contract basis to offer comprehensive services that extend from drug development all the way through to manufacturing and packaging. As a result, biopharmaceutical companies can emphasize their core competencies, such as research and marketing, while outsourcing manufacturing and development activities to specialized CMOs. Several small and emerging biotechnology companies opt to outsource their fill & finish manufacturing requirements due to the lack of in-house manufacturing capability, thus mitigating the necessity for capital investments.

Furthermore, to meet the increasing demand for biologics in the market, biopharmaceutical companies have faced financial strain, particularly in acquiring and operating expensive equipment for mass biopharmaceutical production. To address this issue, many companies have opted to outsource their manufacturing to CMOs equipped with advanced facilities, equipment, and labor force to enhance the efficiency of their mass production within their business models.

In addition, the rising partnerships between contract manufacturing organizations and biopharmaceutical companies and the increasing number of biopharmaceutical drugs in the pipeline are some of the other factors expected to bolster the market growth during the forecast period.

• For instance, in June 2023, Vertex Pharmaceuticals Incorporated, a global biotechnology company, announced a strategic collaboration with Lonza, a contract manufacturing organization, to support the manufacture of Vertex’s portfolio of investigational stem cell-derived, fully differentiated insulin-producing islet cell therapies for people with type 1 diabetes.        

The COVID-19 pandemic had a positive impact on the market in 2020. The industry witnessed a significant growth rate in the period of 2019 to 2020. The sudden increase in the growth rate was attributed to the high number of biopharmaceutical contracts assigned to the CMOs for the manufacturing of the COVID-19 vaccines. With the surge of COVID-19 impact, numerous biopharmaceutical companies partnered with CMOs to develop safe and effective vaccines for the prevention of infection, alongside exploring novel therapies for treating those infected with the virus, which in turn drove the market growth during the pandemic. The market is projected to witness robust growth prospects during the forecast period of 2024-2032.

Biopharmaceutical CMO Market Trends

Microbial Fermentation and Mammalian Cell Culture Outsourced Services to Gain Traction

In recent years, the demand for outsourcing services related to mammalian cell culture and microbial fermentation has increased. Hence, the majority of biopharmaceutical industries are focusing on the outsourcing of these services to contract manufacturing organizations.  The biopharmaceutical industries are focusing more on the development of biologics based on processes such as recombinant proteins and monoclonal antibodies. Thus, the demand for outsourcing these services from CMOs has increased. Moreover, the substantial number of biologics being developed by various companies has significantly increased the demand for services related to mammalian cell culture.

• For instance, as per the data provided by Contract Pharma, from 2019, there has been a 10% increase in demand for the outsourcing of animal cell culture services by the industry. In addition, there has been a 30% increase in capacity needs for mammalian cell culture in past recent years.

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Biopharmaceutical CMO Market Growth Factors

Strong Pipeline of Biologics to Boost Demand for Biopharmaceutical CMO Services

The biopharmaceutical contract manufacturing market is poised for continued expansion, driven by the increasing investment of pharmaceutical and biotechnology companies in contract manufacturing services. This market is projected to experience rapid growth throughout the forecast period, with smaller CMOs anticipating higher growth rates compared to larger CMOs.

The increasing number of biologics products expected to be launched during the forecast period is a major factor driving the market growth. The large number of biopharmaceutical products in the companies’ product pipeline is expected to intensely boost demand for outsourcing services. In addition, the gradually increasing number of approved products further supports the market growth.

• For instance, as per the data published by the U.S. FDA in January 2024, it has approved 55 new drugs and biological products in 2023.

Moreover, the escalating rate of collaborations and acquisitions among biopharmaceutical CMOs is expected to drive revenue growth.

• For instance, as per the data published by BioPharm International in January 2023, CMOs commercially manufacture nearly 30% of recombinant commercial products, although this remains concentrated among a few large-capacity CMOs. In addition, 30.1% of respondents indicated that the U.S. facilities could be used for CMO work within a period of five years, making the U.S. the most important destination for outsourcing to foreign CMOs.

Enhanced Production Capacity for Biologics of Several Biopharmaceutical CMOs to Support Market Expansion

The rising influx of novel drugs entering clinical pipelines, coupled with the ongoing expansion of biopharmaceuticals, is driving the market’s growth rate upwards. Due to these factors, contract manufacturing organizations are escalating their manufacturing capabilities and capacities.

• For instance, as per the data published by BioProcess International in October 2023, the demand for mammalian bio-manufacturing capacity is increasing by around 11.5% per annum and will increasingly be served by CDMOs.


• Similarly, as per the data provided by Fierce Pharma in October 2021, Samsung Biologics is focusing on the early completion of its novel USD 2.00 billion manufacturing facility in an effort to meet increased demand and boost the company’s profits.

Therefore, the intensified efforts of contract manufacturing organizations to improve and broaden their production capacity for biologics are expected to notably attract biopharmaceutical companies to outsource their biologics development operations.

RESTRAINING FACTORS

High Cost of Setting up Production Facility Might Restrain Market Growth

The biopharmaceutical CMO market is a captivating one to invest in. It has a profit margin of around 30% compared to 5%-10% in the pharmaceutical CMO market. However, a considerable upfront investment is required for the establishment of manufacturing facilities. Similarly, the need for additional equipment to scale up bio-manufacturing at a higher pace is the key factor limiting market growth to a certain extent.

Furthermore, the production of mammalian cell cultures and microbial fermentation systems for the development of biologics is a costly process. Hence, outsourcing has become an attractive option for its cost-effectiveness, allowing companies to mitigate risks and operational expenses.

In addition, the decline in in-house production of these systems has occurred due to the technological complexity of bioprocessing, which makes it increasingly challenging for companies to maintain the required specialized skills and equipment. Therefore, only a few companies have complete in-house production capacity for cell culture systems needed in the development of biologics.

• For instance, as per the data published by Pharmaceutical Technology in September 2023, only 29.7% of companies reported completely in-house cell culture production in 2023, which is a decrease of 34.9% compared to 2022. In addition, in 2023, only 34.3% of companies handled all their microbial fermentation in-house, which dropped by 40.0% in comparison with the previous year.

Biopharmaceutical CMO Market Segmentation Analysis

By Service Analysis

Manufacturing Segment Dominated Due to Launch of New Manufacturing Facilities 

Based on service, the market for biopharmaceutical CMO is categorized into manufacturing, fill & finish operations, analytical & QC studies, and packaging. The manufacturing segment is further sub-segmented into upstream processing and downstream processing.

The manufacturing segment held the largest market share in 2023 and is slated to experience positive growth throughout the forecast period. The segment is experiencing significant growth largely because more contract manufacturing projects are being awarded to CMOs globally, aiming to enhance the efficient production of biologics. In addition to this, several companies are establishing their manufacturing plants across the world.

• For instance, in October 2023, Samsung Biologics and Kurma Partners entered a partnership for the development and manufacturing of biologics for Kurma Partners' portfolio companies. 


• In addition, in November 2022, WuXi Biologics launched a contract research, development, and manufacturing (CRDMO) center in Shanghai, China. This center is built with global cGMP standards and can accommodate more than 3,000 employees.

The manufacturing segment is additionally categorized into upstream processing and downstream processing. Over the forecast period, the downstream processing segment is projected to maintain the largest market share. Downstream processing is an intricate operation that needs advanced technology-based equipment. Due to the absence of in-house manufacturing facilities, several small-scale biotechnology companies opt to outsource their operations to contract manufacturing organizations to ensure continuous biologics production. Various biopharmaceutical companies are expanding their manufacturing capacity with the addition of down-processing equipment.

• For instance, in January 2021, Fujifilm Diosynth Biotechnologies invested USD 1.60 billion to expand manufacturing at its sites in Denmark and Texas. The company has supported large-scale cGMP fed-batch production by adding two downstream processing streams in its Denmark facility.

On the other hand, the fill & finish operations segment is expected to grow at a significant compound annual growth rate during the forecast period. Several biopharmaceutical companies are collaborating with contract manufacturing organizations to expand their product-filling capacity. In addition, the demand for filling and finishing services is rising as a result of the increased number of regulatory approvals and biological product launches. These are some of the important factors responsible for segmental growth.

• For instance, in April 2023, Ajinomoto Bio-Pharma Services announced that the U.S. FDA had approved the company's high-potency vial line to manufacture a commercial product.


• For instance, in October 2023, Lonza announced the launch of a new filling line for commercial supply of antibody-drug conjugates for its customers. The new cGMP filling line of the company site will enable the handling and filling of bioconjugates for commercial supply.

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By Source Analysis

High Usage of Mammalian Expression Systems to Foster the Segment Growth

Based on source, the market is segmented into mammalian and non-mammalian.

In 2023, the mammalian segment captured the dominating share in the global market. This can be attributed to the high usage of mammalian expression systems for biopharmaceutical production along with the constantly growing number of approved products based on mammalian cell culture. For instance, according to an article published by BioProcess International in August 2022, as of June 2022, out of total commercialized biopharmaceutical products, 68% were based on mammalian sources.

On the other hand, the non-mammalian segment is also anticipated to witness considerable growth over the forecast period. Strong growth prospects for the non-antibody-based products that are manufactured using microbial expression systems is one of the factors responsible for the segment growth.

By Product Analysis

High Number of Products Approved in Biologics Segment to Impel the Segment Expansion

Based on product, the market for biopharmaceutical CMO is segmented into biologics and biosimilars.

The biologics segment accounted for the largest global biopharmaceutical CMO market share in 2023. Key factors supporting the dominance of the segment include the high number of product approvals by regulatory bodies, coupled with a strong focus of biopharmaceutical companies on manufacturing biologics such as vaccines, monoclonal antibodies, and others.

• For instance, as per the data published by NCBI in December 2022, biologics accounted for more than 90% of the biopharmaceuticals global sales in 2021.


• The same source further stated that the monoclonal antibodies dominated the number of approved products in the past four years.

In contrast, the biosimilars segment is expected to grow at a significant rate in the near future. Biopharmaceutical manufacturers are shifting their focus to the development of biosimilars owing to their various advantages and rapidly growing demand. As of January 2024, as per the data published by the Center for Biosimilars, 45 and 79 biosimilar products have been approved in the U.S. and the European Union, respectively.

REGIONAL INSIGHTS

By region, the market is divided into Europe, the Asia Pacific, Latin America, the Middle East & Africa, and North America.

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North America held the largest biopharmaceutical CMO market share in 2023, generating a revenue of USD 6.06 billion. The regional market is slated to experience significant growth throughout the forecast period due to the presence of a higher number of manufacturing facilities provided by CMOs across the region, coupled with the launch of new manufacturing facilities in the U.S. market.

• For instance, in May 2021, Lonza announced a significant investment plan to expand its mammalian drug substance manufacturing facilities in Portsmouth (U.S.). This small-scale, single-use technology facility is planned for the U.S. to support customers scaling clinical to commercial manufacturing with a capacity for up to eight 2,000L bioreactors.

Europe is also anticipated to witness significant market growth during the forecast period. In Europe, the production capacity of biopharmaceutical CMOs is significantly higher than in the U.S.

• For example, in February 2019, according to Bio Process International, Europe accounted for 37.0% of the world's CMO capacity, with North America accounting for 35.0%.

In addition, the Asia Pacific market is estimated to witness significant growth throughout the forecast period. The region's growth is largely due to the increasing establishment of CMO’s manufacturing plants throughout the Asia Pacific.

• For instance, in October 2022, FUJIFILM Corporation announced that it would establish the company’s first Japanese Bio-CDMO site in Toyama City, Toyama Prefecture.

Due to a relatively lower exposure of biopharma CMOs, Latin America and the Middle East &

Africa regions experienced a minimal market share in 2023.

List of Key Companies in Biopharmaceutical CMO Market

Lonza Dominates Owing to Strong Distribution Network Globally

The market for biopharmaceutical CMOs reflects a fragmented structure with the presence of a high number of large and small players. Lonza holds the leading position in the global market, trailed by Boehringer Ingelheim, Samsung Biologics, and Catalent, Inc.

Lonza’s dominant share is a result of its robust global distribution network. Furthermore, the company is concentrated on investing in expanding its production capacity and adopting novel technologies.

• For instance, in December 2021, Lonza signed an agreement with Bioqube Ventures for the development and manufacture of small molecules and biologics in the coming years.

Some other prominent players in the market include Wuxi Biologics, Recipharm AB, and others. Along with these players, the market comprises several small-scale players. These companies undertake various strategic initiatives such as mergers and acquisitions, collaborations & partnerships, and others to expand their market presence.

• For instance, in May 2023, Siegfried acquired a majority stake in DINAMIQS for the establishment of a best-in-class development and manufacturing organization for cell and gene therapies.

LIST OF KEY COMPANIES PROFILED:

• Samsung Biologics (Republic of Korea)


• Lonza (U.S.)


• Recipharm AB (Sweden)


• WuXi Biologics (China)


• FUJIFILM (FUJIFILM Diosynth Biotechnologies) (Japan)


• Siegfried Holding AG (Switzerland)


• Cambrex Corporation (U.S.)


• Catalent, Inc (U.S.)


• Thermo Fisher Scientific Inc. (Patheon) (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2024- Lonza announced the signing of an agreement with F. Hoffmann-La Roche Ltd (Roche) for the acquisition of Roche’s large scale biologics manufacturing site in Vacaville, U.S.


• October 2023- Vaxcyte, Inc., an U.S. based company engaged in the R&D initiatives of innovative vaccines, announced the expansion of their collaboration with Lonza for the global commercial manufacturing of their broad-spectrum pneumococcal conjugate vaccines (PCVs).


• July 2023- Samsung Biologics secured two high-value deals totaling USD 1,115.7 (£ 897.0) million with Pfizer, including the CDMO's largest single contract signing to date.


• April 2023-  Fujifilm Diosynth Biotechnologies acquired 41 acres of land nearby to its existing biomanufacturing campus in North Carolina. This land can bring more capacity for manufacturing and development of biologics.


• February 2023- Lotte Biologics announced an investment of USD 3.00 billion to construct three biomanufacturing plants in Korea.


• January 2023- Samsung Biologics' contract development and manufacturing organization (CDMO) participated in the J.P. Morgan Healthcare Conference held in San Francisco, California. During the conference, the company presented its 2024 business plans and strategy.


• January 2023- Lotte Biologics acquired a commercial-scale biomanufacturing facility in New York from Bristol-Myers Squibb to enter the CDMO market.


• February 2022- Samsung Biologics received six CMO leadership awards across all performance categories, including capabilities, compatibility, expertise, reliability, quality, and service.

REPORT COVERAGE

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The global biopharmaceutical CMO market report provides a detailed analysis of the industry. It emphasizes key aspects, such as major companies, service types, sources, products, capacity-based analysis, CMO facilities per region, and a few others. In addition, it includes detailed insights into market dynamics, new product launches, and key industry developments such as mergers, partnerships, & acquisitions.

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