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?

Fostering Long-Term Collaborations

David McErlane and Aris Gennadios: The CDMO market has adapted to the changes brought about by the pandemic by becoming more agile and flexible, to be able to rapidly respond to changes in market conditions, and more focused on high-growth areas such as biologics and cell and gene therapies. We have also seen more investment in digital technologies.

The Covid-19 pandemic highlighted the need for integrated and robust supply chains. Improved supply chain resilience that provides reliability and traceability can support the timely delivery of therapies to patients. A well-planned, integrated supply chain for critical raw materials and components becomes critical when high-value, individualized therapies such as cell therapies need to be manufactured and delivered in a time-sensitive manner.

There has been an increase in strategic partnerships between pharmaceutical companies and CDMOs. These collaborations are often more integrated, involving earlier stages of development and greater sharing of information to streamline the drug development process.
The emerging biopharma sector continues to drive innovation, and as a result, Catalent has seen a rise in demand for integrated services that streamline the drug development process from development to launch. As a critical partner to these companies, a ­CDMO’s ability to offer comprehensive solutions not only accelerates timelines, but also ensures the successful commercialization of groundbreaking therapies.

We have also seen an increase in outsourcing driven by the need for flexibility, efficiency, and access to specialized infrastructure and expertise required to bring novel treatments to market. With global and industry volatility, many customers value the capacity and flexibility CDMOs bring to rapidly scale and adjust output quickly in response to changes in demand.
Of course, it has remained essential for CDMOs to provide reliable quality and maintain trust-based relationships with customers. In an increasingly competitive market, Catalent’s commitment to excellence and transparency has become a cornerstone of our partnerships. By consistently delivering on our promises, we foster long-term collaborations that drive mutual success.