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?

A Secure and Resilient Supply Chain is Crucial

Gavin Murdoch: The Covid-19 pandemic has been a catalyst for change in the contract development and manufacturing organizations (CDMOs) landscape. It has underscored the critical importance of a secure and resilient supply chain, making us realize the necessity for having secondary and local suppliers to ensure the availability of essential materials and services. It has also focused onshoring activities and investment in captive capacity.
There is an increased emphasis on dual sourcing and onshoring. Companies are now prioritizing having backup suppliers and local partnerships to mitigate risks associated with geopolitical uncertainties and supply chain disruptions. The BioSecure Act has further accentuated the need for transparency and security in sourcing, making it crucial to know the origin of materials and ensuring they are not reliant on single points of failure.
The market complexity has also proliferated in therapeutic areas such as cell and gene therapy, ADCs, and complex biologics. The demand for specialized expertise across these fields means no single company can master all domains, thus driving the partnering internal capabilities with outsourcing from discovery to commercialization.

“The Covid-19 pandemic has been a catalyst for change
in the contract development and manufacturing organizations (CDMOs) landscape.”

Abzena is not just reacting to these market changes but strategically positioning itself to capitalize on them. Our approach focuses on fully integrating offerings, from discovery and development to clinical support and commercial production. We also offer drop in service offerings to bridge gaps in internal bench strength to accelerate pipelines. By ensuring our clients have a seamless, end-to-end supply chain, we reduce the risk of disruptions caused by multiple failure nodes.
We are also investing in capabilities and capacity, particularly in high-demand areas like ADCs, bioconjugates and complex biologics. Furthermore, we are exploring innovative business models that foster closer collaborations with clients, transforming our R&D operations into virtual extensions of their teams. Resilience, flexibility, and strategic partnerships define the new CDMO rules. Abzena is adapting to these changes and leading this transformation.