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?

From Transactional to Collaborative Partnerships

Thomas Otto: Since the pandemic, partnerships between biopharma companies and CDMOs transformed from transactional to collaborative. Fill and finish partners are heavily integrated into the drug development process from preclinical through to commercialization and long-term market supply. This has prompted a rising demand for CDMO services resulting in projected growth of the global market from $222.5 billion in 2023 to $249.96 billion in 2024, according to recent reports. The pandemic shone a light on the need for continuing production capabilities that don’t inhibit quality, making the need for external support crucial for drug owners. Now, we’re witnessing a rise in both small batch and blockbuster drug development as companies explore solutions for rare diseases while producing the most heavily relied-upon drugs. This is just one more area where CDMO expertise is valued for its unique infrastructure, specialized focus, and enhanced capacities.

Peter Soelkner: In formulating our strategy for growing market share, we rely on lessons learned throughout our history as an independent, family-owned solution provider. The strategy comes down to several elements which we prioritize to meet our customers’ needs. First, we invest proactively in the infrastructure, capacity, and technology needed to support new therapies and consequently customer demands which continue to arise. Simultaneously, we remain committed to the tried-and-true medications that will go on to serve a purpose in the market, and rather than replacing, we expand to leave room for what works and what’s new. We place an equal focus on investing in our talented workforce who make it possible to provide the expertise our customers rely on. We are now represented by 6,600 global employees, over 1,000 of which are dedicated to quality tasks. Lastly, we prioritize a responsible role in the value chain. As a trusted globally-operating outsource partner, our actions reflect upon our customers. Therefore, we prioritize sustainable business practices that allow drug owners to feel confident in us as a critical extension of their teams.