From April 20th to 21st, 2023, the Boao Forum for Asia International Health Industry Forum was held at the Beijing Economic and Technological Development Area. This forum is an event within the framework of the Boao Forum for Asia Global Health Forum Conference, organized by the Boao Forum for Asia and the People's Government of Beijing Municipality, undertaken by the Organizing Committee of the Boao Forum for Asia Global Health Forum Conference and the Management Committee of the Beijing Economic and Technological Development Area, and supported by relevant Chinese government departments as well as international organizations and institutions such as the World Health Organization, Bill & Melinda Gates Foundation, and Mérité Foundation in France.
As a strategic partner of the forum, Frost & Sullivan (referred to as 'Frost & Sullivan') jointly released the 'Research Report on the Current Situation and Development Trends of the CDMO Industry' (hereinafter referred to as the 'Report') with the Organizing Committee of the Boao Forum on Global Health at the industry report launch event of the forum on April 21.Ms. Guo Jing, Senior Consulting Director of the Healthcare Team at Frost & Sullivan Greater China, attended the report release ceremony and provided an in-depth interpretation of the report.
Ms. Guo Jing, Senior Consulting Director of the Healthcare Team at Frost & Sullivan Greater China
CDMOs are primarily institutions that provide process development and preparation, process optimization, registration, validation batch production, as well as commercial customized R&D and production services for products of pharmaceutical companies and biotechnology firms, especially innovative products.
Ms. Guo Jing pointed out that CDMO evolved from CMO and has been iteratively upgraded. As competition among pharmaceutical companies intensifies, the simple contract manufacturing production carried out by traditional CMO enterprises can no longer meet the needs of pharmaceutical companies for cost reduction and efficiency improvement. On this basis, CDMO enterprises that can utilize their own production equipment and technical advantages to help pharmaceutical companies optimize production processes and carry out customized large-scale production have emerged. The CDMO industry has been continuously developing since its inception and has now entered a stable development phase.
CDMO services cover the entire process of drug research and development, including preclinical, clinical, and commercial stages. CDMO companies can provide one-stop solutions to continuously assist in the commercialization process of drug launches.According to the type of drug, the current CDMO sub-sectors can be mainly divided into three categories: small molecule CDMO, large molecule CDMO (including peptides/antibodies/proteins/vaccines, etc.), and cell and gene therapy (CGT) CDMO. The Report details the specific service content and technical barriers of CDMOs in these areas for small molecules, large molecules, and CGT.
Under the wave of innovative research and development, competition in the pharmaceutical industry is becoming increasingly fierce. The division of labor within the pharmaceutical industry chain is gradually becoming specialized, refined, and customized.CDMOs, leveraging their technological advantages and production capabilities, assist pharmaceutical companies in realizing the transition from concept to product, from process development to large-scale production. Entrusting CDMO services has become an important pathway for innovative research, development, and production.Both start-up pharmaceutical companies and large pharmaceutical enterprises can benefit from the high-quality services provided by CDMOs. CDMOs also continuously optimize their technology platforms, expand business scopes, and extend the industrial chain in response to the ever-changing pharmaceutical market, in order to meet the actual needs of different types of customers.
"CDMOs are core participants in the drug research and development industry chain, and collaborating with CDMOs can enhance the core competitiveness of pharmaceutical companies," Ms. Guo Jing further explained. CDMOs have the following four advantages:
1) Assist in R&D and production,CDMO can assist in completing research and development, as well as production work during the preclinical, clinical, and commercialization stages of pharmaceuticals. This enables enterprises to optimize resource allocation and invest more in core technology research and development.
2) Reduce enterprise costsCDMOs can help pharmaceutical companies reduce capacity construction and lower fixed asset costs; CDMOs' bargaining power with upstream suppliers will help pharmaceutical enterprises optimize costs, strategically bind with upstream suppliers to increase profit margins;
3) Improve R&D production efficiency,CDMOs can intervene at the early stages of new drug development, overall layout process flows, improve service efficiency, and ensure the stability and sustainability of drug quality;
4) Promote technology iteration,CDMOs and pharmaceutical companies focusing on R&D and production processes can develop synergistically through specialized division of labor, overcome technical difficulties, accelerate product technology platform iterations, and achieve faster R&D speeds.
According to a study by Frost & Sullivan, the global CDMO market size has grown from $39.4 billion in 2017 to $632 billion in 2021, and is expected to reach $231 billion by 2030, maintaining an annual growth rate of over 12% from 2017 to 2030.Breaking down by drug type, the largest proportion of the entire CDMO market is in the field of chemical drugs, followed by the antibody/protein/non-nucleic acid vaccine sector. Then comes the recently very popular CGT (Cell and Gene Therapy) field, followed by the peptide sector.Overall, the global CDMO industry continues to expand in volume and will maintain a high market prosperity level in the future.
Since 2019, there have been several large-scale financing events in the domestic CDMO industry. The injection of capital has helped the CDMO industry develop rapidly. Looking at sub-sectors, biopharmaceutical CDMO and CGT CDMO companies are particularly favored by the capital market.
The competitiveness of CDMO companies mainly focuses on several aspects such as R&D capabilities, development and application of emerging technologies, quality systems, raw material supply, cost optimization, and production capacity. In order to further improve their industry competitiveness and provide customers with higher-quality solutions, CDMO companies continuously expand their production capacity, business scope, and service chain through an integrated strategy of internal development and external mergers and acquisitions.The Report summarizes the financing situations, key mergers and acquisitions events, and service cases of several CDMO companies in the industry over recent years.
The last section of the Report provides a detailed introduction and analysis of representative Chinese CDMO companies from multiple aspects such as company history, business layout, production capacity scale, and core strengths.Including WuXi AppTec, WuXi Biologics, KanglunhuaCheng, Dongyao Pharmaceutical, Yaohai Biologics, Fucheng Biologics, Jianxin Yuanli, Novogene Biologics, Heyuan Biologics, Kailaiying, Puxin Biologics, Boteng Pharmaceutical,, HepuRX, Mabray, ViaBio, etc.
Ms. Guo Jing stated that the future development of China's CDMO industry will gradually become more segmented, with an expected continuous expansion of the market in the future. The 'Research Report on the Current Situation and Development Trends of the CDMO Industry' released this time aims to conduct an in-depth analysis of China's CDMO industry, uncovering the industry value of CDMO from various aspects such as industry overview, capital enthusiasm, and competitive landscape, exploring the driving factors behind industry development, and tracking the technological iteration of drug production processes.
"The Report focuses on the overall operational status of the CDMO industry while also highlighting the development status of various sub-sectors within it. It analyzes the market size of the overall landscape and key tracks of the CDMO industry in China and globally, aiming to reflect the development history of various sub-sectors in China's CDMO industry over the past and to make forward-looking predictions about the growth potential of the CDMO market in the future," said Ms. Guo Jing.
