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?

The Future of the CDMO Industry Is Exciting

Greg Behar: At Recipharm, we are witnessing significant growth in key areas, particularly in the demand for complex pharmaceutical products, such as advanced therapy medicinal products (ATMPs) in our ReciBioPharm business unit. This growth trajectory is closely tied to broader economic factors like interest rate trends, which impact funding availability. Additionally, there is a notable rise in demand for injectable sterile biopharmaceuticals, such as GLP-1 products and the development of highly potent drugs, highlighting the crucial role Recipharm plays in meeting these needs.
As more customers outsource production stages, we must strategically expand our capacity to deliver the required products efficiently and cost-effectively, and form genuine partnerships with our customers. From early-stage development, where we provide analytical support, to tech transfer and full-scale manufacturing, Recipharm is committed to being a reliable partner throughout the product lifecycle.
The geopolitical climate underscores the importance of supply chain security, a lesson emphasized during the Covid-19 pandemic. Prioritizing the robustness of our supply chains ensures that we continue to deliver the critical products our customers and patients rely on.

“Demographic shifts,
such as the aging global population
and the growth of emerging markets,
are expanding our customers’ markets.”

Demographic shifts, such as the aging global population and the growth of emerging markets, are expanding our customers’ markets. To respond effectively, we must operate with efficiency and flexibility, anticipating the evolving needs of these markets.
Innovation remains central to our strategy. We are dedicated to leveraging cutting-edge technologies, such as artificial intelligence, to accelerate tech transfers, streamline production and enhance regulatory support.
The future of the CDMO industry is exciting. With strong customer relationships, a focus on innovation and a diverse portfolio, Recipharm is poised to fully leverage these growth opportunities and achieve success in the years ahead.