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United States Pharmaceutical Contract Manufacturing Organization (CMO) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 120 Pages
  • January 2022
  • Region: United States
  • Mordor Intelligence
  • ID: 5239403

The US pharmaceutical contract manufacturing organization (CMO) market is expected to reach a CAGR of 5 % during the forecast period of 2021 to 2026. The stricter regulation in the country ensures the superior quality of the manufacturing and the end-product that is being adhered to by the CMOs. As of 2019, more than 800 active Investigational New Drugs (IND) are waiting for approval with the FDA in the United States. This approval and drug-developing pipelines are expected to promise more opportunities to CMOs in the future.

Key Highlights

  • The growing emphasis on drug discovery and outsourcing of manufacturing drives the market. The adoption of scientific exploration of disease mechanisms progressing to the discovery and development of agents is increasing in the country. The pre-clinical analysis is a critical phase in pharmaceutical research. Several tests are conducted at this stage to determine if a drug is ready for clinical trials.
  • According to a recent report of Biopharmaceutical Industry-sponsored Clinical Trials published by the Pharmaceutical Research and Manufacturers of America (PhRMA), in April 2019, a total of 4,516 active clinical trials and 920,173 are estimated for the overall US enrollment. Further, players are increasingly outsourcing their manufacturing to improve their comprehensive services from drug development.
  • In February 2019, Thermo Fisher Scientific announced that the company is focused on supplying critical raw materials to manufacture precise immunotherapy vaccines. Under the agreement, Thermo Fisher announced to supply nucleotides, enzymes, and other critical raw materials to support BioNTech's messenger RNA (mRNA) manufacturing platform.
  • Also, the increasing investment in capacity expansion significantly assists the market growth. For instance, in January 2019, Catalent announced that it had made a USD 200 million capital investment in the biologics business, for expanding the drug substance manufacturing capacity with drug product fill/finish capacity due to major projected growth among its existing and future customers.
  • Further, as the economies around the world are suffering from the impact of Covid-19, and many businesses are experiencing losses, pharmaceutical companies are taking center stage in the Covid-19 fight in countries, such as India and China. In the United States, FDA stated that as Indian imports accounted for 24% of medicines and 31% of medicine ingredients in 2018, but with COVID-19-related shortage, the US manufacturers are affected by COVID-19 that produces an API. The trade group Association for Accessible Medicines sought to reassure the US public with a message that pharmaceutical manufacturers are planning for potential supply disruptions.
  • However, players in the country are seeking to grow the business through their clinical trial of the current pandemic. In May 2020, Ajinomoto Bio-Pharma Services (CMO player) announced it has entered into the manufacturing services agreement with CytoDyn Inc. for supplying of the investigational new drug known as leronlimab (PRO 140), which is currently being observed in clinical trial protocols for mild-to-moderately ill and severely ill COVID-19 patients.

Key Market Trends

Increasing Demand of API to Witness Significant Market Growth

  • The demand for API manufacturing witnessed a sustained rise in the past few years, and it is expected to continue growing steadily. As of August 2019, 28% of the manufacturing facilities making APIs for the US markets are based in the United States.
  • Further, the increasing prevalence of infectious diseases, cardiovascular conditions, and other chronic and genetic disorders are driving the market of API. For instance, The Alzheimer's Association stated that an estimated 5.8 million Americans aging 65 and older have Alzheimer's dementia in 2020. 80% are age 75 or older, and this number is predicted to reach approx 14 million, worsening the situation over the forecast period. Also, by 2050, a new case of the disease is expected to develop every 33 seconds. This significantly demands more API facility prevailing high stock.
  • Furthermore, according to Hemp Business Journal, till 2022, the estimated sales of hemp-based cannabidiol (CBD) products in the United States is USD 522 million (human) and USD 125 million (pet/animal). The Wall Street investment firm estimated that in 2018, Americans spent about USD 2 billion on CBD API mostly for treating anxiety, pain, or sleep issues. By 2025, Wall Street predicts that the market value will rise to USD 16 billion. With the increasing rate of chronic pain, anxiety, inflammation, and insomnia in the United States people, this significantly supports the market growth.
  • Moreover, in context to CBD, in April 2019, Emerald Health Pharmaceuticals and Lonza announced an agreement for the large expansion in the manufacturing of a new synthetic derivative of CBD for the treatment of multiple sclerosis (MS) and systemic scleroderma. Under the agreement, Lonza Pharma & Biotech focuses on synthesizing the API / drug substance (VCE-004.8) and develop the drug product (EHP-101) as liquid-filled capsules.
  • Further, FDA believes the advanced manufacturing technologies could enable the US-based pharmaceutical manufacturing in regaining its competitiveness with China and other foreign countries and can potentially ensure a stable supply of drugs that are critical to the health of the US patients.
  • In May 2020, Quartic.ai, and Bright Path Laboratories, a provider of continuous flow reactor technologies, signed an agreement for developing an AI-powered continuous manufacturing platform for active APIs and other small molecule drugs using Bright Path Labs’ continuous bioreactor and the Quartic.ai smart manufacturing technology. The US imports most of its APIs material used in domestic pharmaceutical products from foreign countries, like China and India. This combined Bright Path Labs-Quartic solution will help strengthen the country's drug manufacturing independence and ensure a critical supply of medicines to the patients in the United States.

Injectable Dose to Witness Significant Market Share

  • The increasing demand for generic drugs in the country tends to increase the market of Finished Dosage Formulation (FDF) Development. With increasing approval of Abbreviated New Drug Application (ANDA), Generics will continue to dominate prescription drug usage in the United States, rising to 92% by 2020, the source stated by IMS Institute for Healthcare Informatics. Also, an additional 146 Tentative Approvals for new drugs were also granted during the calendar year 2019 through the Food and Drug Administration (FDA).
  • The rise in a number of chronic illnesses, like diabetes and cancer (with roughly 1.8 million people diagnosed with cancer in 2019 and 34 million diabetic people in the United States), has increased the requirement for injectable drug delivery. Injectable dose formulations are sterile preparations, including small- and large-volume parenterals. Small-volume parenterals are of two types: cytotoxic and non-cytotoxic.
  • Owing to the robust demand for oncology and other high-potency drugs (such as antibody conjugates, steroids, and IV fluids that require quick onset of action), cytotoxic drugs (drugs used to destroy cancer cell) are expected to be the key growth driver for the injectable dose formulation segment. According to the American Cancer Society, in 2020, there will be an estimated 1.8 million new cancer cases diagnosed and 606,520 cancer deaths in the United States.
  • Also, according to the American Academy of Cosmetic Dentistry's Cosmetic Dentistry State of the Industry Survey, there was an increase in the number of patients seeking cosmetic dentistry, as well as a rise in the average production per cosmetic patient per visit. This has also driven the demand for facial dentistry in the country.​ The US FDA approved the use of injectable dermal fillers based on the review of data samples collected from controlled clinical studies that evaluated the safe and effective use of wrinkle fillers when injected into particular areas of facial tissue. Additionally, botox injections have increased in the country over the years.​
  • Further, the majority of leading CMOs in the United States, such as Baxter BioPharma Solutions and Vetter Pharma, has developed extensive capabilities in the injectable dose formulations segment, which is likely to experience significant growth throughout the forecast period.
  • In December 2019, Dr. Reddy's Laboratories launched Bortezomib for injection in the US market, a generic version of Velcade of Millennium Pharmaceuticals. Bortezomib is used for the treatment of adult patients with multiple myeloma or with mantle cell lymphoma who have received at least one prior therapy.

Competitive Landscape

The US pharmaceutical contract manufacturing organization (CMO) market is highly competitive and fragmented, which consists of several major players, and with new development facilities and application of new drugs, the market caters to an intense rivalry. Key players are Catalent Inc.​ and Recipharm AB​. Recent developments in the market are -

  • February 2020 - Alchem Laboratories Corporation announced an expansion of its screening and clinical trial manufacturing capabilities. The expansion was made through construction of Building 3, a 12,000 square foot multi-use facility dedicated to high-throughput screening, biologic and drug product manufacturing clean-room areas, and analytical support.
  • December 2019 - Thermo Fisher Scientific Inc. introduced its new USD 90 million viral vector CDMO site in Lexington, Massachusetts. The 50,000-square-foot facility will support the development, testing, and manufacture of viral vectors, which are critical to advancing new life-saving gene and cell therapies.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
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Table of Contents

1.1 Study Assumptions and Market Definition?
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis?
4.4 Industry Policies
4.5 Market Drivers
4.5.1 Increasing Emphasis on Drug Discovery and Outsourcing of Manufacturing
4.5.2 Strong R&D Investments
4.6 Market Challenges
4.6.1 Presence of Low-Cost Alternatives For Outsourcing
4.6.2 Regulatory and Operational Concerns Due to the Move Toward Serialization
4.7 Key considerations involved in the selection of a CMO in the United States?
4.8 Impact of COVID-19 on CMOs and Analysis on the Short and Medium-Term Impact on Manufacturing Output
6.1 By Service Type
6.1.1 Active Pharmaceutical Ingredient (API) Manufacturing Small Molecule? Large Molecule? High Potency API (HPAPI)?
6.1.2 Finished Dosage Formulation (FDF) Development and Manufacturing? Solid Dose Formulation? Liquid Dose Formulation? Injectable Dose Formulation?
6.1.3 Secondary Packaging
8.1 Company Profiles
8.1.1 Catalent Inc.
8.1.2 Recipharm AB?
8.1.3 Jubilant Life Sciences Ltd?
8.1.4 Thermo Fisher Scientific Inc. (Patheon Inc.) ?
8.1.5 Boehringer Ingelheim Group
8.1.6 Pfizer CentreSource (Pfizer Inc.)
8.1.7 Aenova Group
8.1.8 AbbVie Contract Manufacturing
8.1.9 Baxter Biopharma Solutions (Baxter International Inc.)?
8.1.10 Lonza Group AG?
8.1.11 Siegfried AG

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Catalent Inc.
  • Recipharm AB​
  • Jubilant Life Sciences Ltd​
  • Thermo Fisher Scientific Inc. (Patheon Inc.) ​
  • Boehringer Ingelheim Group
  • Pfizer CentreSource (Pfizer Inc.)
  • Aenova Group
  • AbbVie Contract Manufacturing
  • Baxter Biopharma Solutions (Baxter International Inc.)​
  • Lonza Group AG​
  • Siegfried AG