Expert Statement: Rohtash Kumar, Veranova
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?
Redefined Expectations on Drug Development Timelines
Rohtash Kumar: Rapid development and scale-up of Covid-19 vaccines redefined the industry’s expectations on drug development timelines. With an increasing focus on fast-to-clinic strategies, CDMOs require expertise and technologies to meet speed, flexibility, and safety demands. These strategies must accelerate development without negatively impacting safety, efficacy, and regulatory compliance.
Global supply chain vulnerabilities, particularly in the reliance on offshore manufacturing for essential supplies, were also exposed. In response, the industry has enhanced supply chain security, prioritized onshore manufacturing, and valued robust tech transfer, driving more pharmaceutical companies to partner with local, experienced CDMOs for a competitive edge.
“With an increasing focus on fast-to-clinic strategies,
CDMOs require expertise and technologies to meet speed,
flexibility, and safety demands.”
Increasing demand for complex APIs highlighted the need to adapt to evolving trends. Leveraging artificial intelligence (AI) tools allows CDMOs to enhance drug development and manufacturing, yielding positive outcomes from enhanced supply chain logistics. Growing emphasis on patient-centricity in drug discovery and development has given rise to targeted therapeutics that deliver stronger efficacy at lower doses, spurring innovations in novel modalities, including drug-conjugate linkers and new delivery routes.
At Veranova, our core values — people, patients, and innovation — guide our market approach. People are our greatest asset, so we’ve focused on building a talented and diverse workforce by strengthening our senior leadership team and appointing a new advisory board.
Our commitment to patients has driven investments in capabilities to handle emerging therapies. The demand for more efficacious, patient-centered treatments has led Veranova to expand our capabilities in complex and highly potent APIs, and drug-conjugate linkers. This includes a mid-scale API expansion at our Edinburgh, UK facility, and a $30 million investment in our Devens, MA site. Innovation is central to our growth.
Veranova continuously strives to improve, exemplified by our collaboration with Phorum.AI, which is focused on enhancing our pharmaceutical manufacturing processes with AI to accelerate time to market for our clients. These strategic moves strengthen our position in the CDMO industry and help our partners deliver life-changing therapeutics to patients.
