Contract development and manufacturing organizations (CDMOs) have been on the rise in the last decade. Historically, CDMOs operated on a business model which predominantly focused on serving as external service providers for manufacturing pharmaceuticals. This model included the addition of capacity by the acquisition of manufacturing facilities from (bio)pharma companies or own capital investments. However, CDMOs have increasingly become innovation leaders and cover more areas of the pharma business, not just manufacturing, opening up additional revenue streams.

This change of focus has been accompanied by a change in the M&A landscape in the market. Some CDMOs are expanding their services and swapping their “contracts” for “partnerships”, evolving the term “CDMO” into “PDMO.” By getting closer to their partners, CDMOs can move past some of the pressure and offer consultative support or innovation to develop products in new ways.
The evolution of the CDMO sector is propelled by rising manufacturing standards, the advent of groundbreaking therapies, and a shift towards personalized medicine.

CHEManager asked executives and industry experts from a broad range of CDMOs to share their views on how their companies are dealing with this changing economic environment and the resulting opportunities and challenges. We proposed to discuss the following aspects:

• (How) have the rules of the CDMO market changed since the pandemic of 2020/21?
• What do you consider the most important growth drivers for CDMOs?
• What is your company’s strategy to grow the market share in the CDMO industry?

Pushing the Boundaries of Innovation
Akhil Ravi: The Indian CDMO market is set to see growth in the next few years. It is forecasted to grow at a CAGR of 14.67%, from $19.63 billion in 2023 to $44.63 billion by 2029, where the global CDMO CAGR projections stand at 6-7% for the same period. The industry growth is supported by a number of factors such as availability of qualified talent, cost-effective operations, well-established network of manufacturing facilities compliant with international regulatory standards, and proactive support by the government in the form of favorable policies, tax incentives, and investments in biotech parks.

We see a rise in demand, especially from global pharma companies looking to diversify their manufacturing footprint in India. At Aurigene Services, we developed a progressive capital investment strategy to further expand our R&D and GMP manufacturing capacities for small and large molecules to meet this growing demand. A recent example of this investment strategy is the inauguration of our new biologics facility spanning 70,000 square feet in Genome Valley, India. We are also working on the 100% digitization of our manufacturing operations, ensuring data accuracy, compliance with regulatory standards, and enabling advanced analytics for proactive quality control.

In our commitment to sustainability, we continue delivering on our ambitious ESG (environment, social, governance) goals. One aspect is the reduction of our carbon footprint, and we aim to switch to 100% renewable power by 2030. We also became a water-positive company in 2023.

Another strong driver is to push the boundaries of innovation in the CDMO space, positioning ourselves at the forefront of industry growth. Our growth strategy focuses on strategic long-term partnerships based on an excellent customer experience and the commitment to support our partners from molecule to market, accelerating access to new medicines for global patients.