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?

CDMO Market Is Poised for Growth

Christoph Schaffrath: Supply chains from China were disrupted during and after the pandemic. Due to monopolies on various drugs in China, there were shortages of various drugs in Western regions. The recent downturn in trade through the Suez Canal has once again proven the vulnerability of globalized supply relationships. As a result, many Western countries have spoken out in favor of restoring local and Western supply and value chains to become independent of China.
In meeting this challenge, Saltigo, a subsidiary of Lanxess, can provide customers with efficient support. Saltigo is a globally operating company specializing in custom manufacturing for the fine chemicals, crop protection, and pharmaceutical industries. The production of pharmaceuticals and especially active pharmaceutical ingredients, so called APIs, can be very complex. In particular, the complex intermediates require various technologies, such as hydrogenation, fluorination, nitration, etc. Ideally, these complex value chains should be served from a single source.

“Many Western countries have spoken out in favor of restoring local
and Western supply and value chains to become independent of China.”

Saltigo is one of the world´s leading custom manufacturers with a very extensive technology portfolio, decades of experience and a large production network and the ideal partner for the CDMO market. As a true one-stop shop, we offer a comprehensive suite of services, from process development and regulatory support to in-house logistics and global sourcing. In addition, our company has a strong focus on sustainability and offers product carbon footprint optimized ’net zero’ processes as a significant added value. Safeguarding the security of supply for our customers is an essential part of Saltigo’s DNA.
Overall, the CDMO market is poised for growth, driven by the need for more secure, sustainable, and technologically advanced pharmaceutical manufacturing solutions. Companies like Saltigo, with their extensive technology portfolio and focus on sustainability, are well-positioned to capitalize on these trends.