Expert Statement: Ludwig de Mot, EuroAPI
The evolution of the CDMO sector is propelled by rising manufacturing standards, the advent of groundbreaking therapies, and a shift towards personalized medicine.
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?
Shift from Manufacturer to Technology Leader
Ludwig de Mot: In a diverse CDMO environment, EuroAPI is in a unique position to take advantage of market trends. The first of these is the shift from providing manufacturing services to becoming technology leaders. At EuroAPI, we partner a wide range of organizations, from biotech to big pharma companies, to address their needs for innovative molecules such as peptides and oligonucleotides, now growing at +10% CAGR. With the boom in precision medicine, we act as an enabler for targeted therapies notably in the domains of rare diseases, the central nervous system, oncology, and immunology. For example, we signed a partnership with the French biotech SQY Therapeutics for an antisense oligonucleotide to treat a genetic disease. We are also seeing increased demand for highly sophisticated peptides, oligonucleotides and conjugates. Among the 14 new contracts signed during the first half-year, EuroAPI contracted a new peptide-PMO conjugate project, making nearly 80 CDMO projects in our portfolio.
“CDMOs are addressing a broader range of therapeutic areas for chronic diseases such as obesity, diabetes and cardiovascular conditions.”
In a second major trend, CDMOs are addressing a broader range of therapeutic areas for chronic diseases such as obesity, diabetes and cardiovascular conditions. Although until recently the peptide market was less at tractive than the oligonucleotide market, the trend has changed since last year due to strong acceleration driven by GLP-1 agonist drugs. The market now needs much larger-scale capacities for both peptides and oligonucleotides, so we are investing €17 million in these products.
Small molecules still have a key role to play but they are growing increasingly complex and more active. As a result they require a larger number of synthesis steps, and more sophisticated control of API physical quality and particle size. So to further complement its internal assets, EuroAPI has partnered with Basel-based SpiroChem to ensure the continuity of API development, and has invested in state-of-the-art high-potency GMP facilities, especially to produce sophisticated payloads for booming antibody-drug conjugates.
