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 Pipeline Full of New Opportunities

Tom Sellig: The CDMO landscape is rapidly evolving, and companies that invest wisely and remain adaptable can stay ahead of the curve and seize emerging market opportunities. The significant biotech funding in so far in 2024 illustrates that we’re in a favorable environment for innovation and development, providing more opportunities for CDMOs.
Technological advancements are a crucial growth driver. Companies like Adare with robust technology solutions are in high demand. We continuously evaluate new technologies to enhance the development and manufacturing journey for our customers. While this process requires substantial time and resources, we believe it’s worth the effort to discover innovations that benefit our clients.
High potency compounds continue to play an important role in the pharmaceutical landscape, driven largely by the oncology sector. Approximately 40%-50% of the drugs in development are cancer drugs, and of those 75% are high potency. This underscores the vital importance to CDMOs of possessing both expertise and infrastructure in handling highly potent compounds, an area where Adare excels.
Pediatrics is another growing market segment, with a heightened awareness among sponsors of the need for tailored formulations to accommodate pediatric patients. As a result, pediatric formulations are now seen as essential component of a dedicated strategy to maximize a product’s potential.

“Companies that invest wisely and remain adaptable can stay ahead of the curve and seize emerging market opportunities.”

Additionally, there is a growing trend of reshoring pharmaceutical work to the US, which presents significant growth opportunities for US-based CDMOs.
In summary, these factors collectively drive substantial growth for the CDMO industry, which we’ve seen at Adare. Our development pipeline is full of new opportunities. We’ve experienced record proposal volumes this year and anticipate continued growth from both new and existing products. The dynamic CDMO landscape clearly offers sustainable growth opportunities for both Adare and the industry at large.