The CMO Market Outlook: Emerging markets, key players and future trends

Published by: Business Insights

Published: Oct. 1, 2009 - 98 Pages

Table of Contents

The CMO market outlook

Executive Summary 8

The contract manufacturing market 8

CMO market analysis 9

Emerging regions in the CMO market

Key players in the CMO market

The future of the CMO market

Chapter 1 The contract manufacturing market

Summary

Introduction

Current market drivers

Sale of captive plants

Cost pressures encourage outsourcing

Increasing number of products in development

Consolidation in the pharmaceutical industry

Increase in biopharmaceuticals market

Growth of emerging pharmaceutical markets

Current market restraints

Overcapacity

Financial pressures

Increased competition - low barriers to entry

Conclusions

Chapter 2 CMO market analysis

Summary

Introduction

Primary manufacturing

Secondary manufacturing

Structure of the CMO market

Advantages of small and medium sized vs. large CMOs

Industry strategies

Strategic outsourcing

Diversification

Biopharmaceutical manufacturing

Overcapacity

Pilot plants

Conclusion

Chapter 3 Emerging regions in the CMO market

Summary

Introduction

China

Drivers of the Chinese contract manufacturing market

Challenges of the Chinese contract manufacturing market

China’s regulatory framework

Intellectual property protection

Counterfeit drugs

China’s major contract manufacturing organizations

CMOs offering finished drugs services

Biopharmaceutical contract manufacturing in China

India

Size of the Indian CMO market

Patent situation and implications for foreign direct investment

Challenges in current patent law

India as a preferred offshoring destination

The new, integrated business model of Indian CMOs

Challenges facing the CRAMS business model

Expansion strategies of India’s major contract manufacturing organizations

Conclusions

Chapter 4 Key players in the CMO market

Summary

Introduction

Methodology

Catalent

Company profile

Business description

Partnering collaborations and recent deals

Lonza

Company profile

Business description

Partnering collaborations and recent deals

Boehringer Ingelheim (BI)

Company profile

Business description

Partnering collaborations and recent deals

DSM

Company profile

Business description

Partnering collaborations and recent deals

Evonik

Company profile

Business description

Partnering collaborations and recent deals

Patheon

Company profile

Business description

Partnering collaborations and recent deals

Jubilant

Company profile

Business description

Partnering collaborations and recent deals

BASF

Company profile

Business description

Partnering collaborations and recent deals

Fareva

Company profile

Business description

Partnering collaborations and recent deals

Wockhardt

Company profile

Business description

Partnering collaborations and recent deals

Chapter 5 The future of the CMO market

Summary

Introduction

Strategic partnerships

Biomanufacturing

Disposable equipment

Offshoring

Market outlook

Chapter 6 Appendix

Selected bibliography

Index

List of Figures

Figure 1.1: Contract manufacturing market ($bn), 2006-14e

Figure 1.2: Pharmaceutical manufacturing process

Figure 1.3: Services performed by CMOs and CDMOs

Figure 1.4: Number of FDA approvals (NCEs), 1990-2008

Figure 1.5: Number of products in development by phase, 1998-2009

Figure 1.6: The contract biomanufacturing market ($bn), 2009-14e

Figure 2.7: Stages of pharmaceutical manufacturing

Figure 2.8: Outsourced biological vs. non-biological manufacturing market, 2009-14e

Figure 2.9: Sponsors employing strategic outsourcing (%)

Figure 2.10: Installed bioreactor capacity (KL), 2006-13e

Figure 2.11: Geographical distribution of bioreactor capacity (%), 2008-13e

Figure 3.12: Share of pharmaceutical sales growth by region, 2006-09f

Figure 3.13: Chinese API exports, $bn 2007-14e

Figure 3.14: Chinese finished form pharmaceuticals exports 2007-14e, $bn

Figure 3.15: India’s finished dose exports ($bn), 2007-14e

Figure 3.16: India’s API exports ($bn), 2007-14e

Figure 3.17: Indian CRAMS market ($bn), 2007-14e

Figure 3.18: Three waves of Indian opportunity

Figure 5.19: Expectations of outsourcing expenditure change, 2009

List of Tables

Table 1.1: New entrants in the pharmaceutical CMO market

Table 2.2: Structure of the CMO industry

Table 2.3: Cost of inaccurate capacity planning

Table 3.4: Selected partnering agreements with Chinese manufacturers

Table 3.5: Selected contract manufacturing/ research deals in India

Table 3.6: Strategic options for Indian pharmaceutical companies

Abstract

Falling productivity and patent expiries are placing increasing pressure on pharmaceutical companies to reduce fix costs including large manufacturing facilities. Sponsors are turning to CMOs in search of time and cost savings and as a way to flexibly manage outsourced manufacturing. Meanwhile the threat of overcapacity combined with inevitable program cancellations following mega-mergers resist the market. The CMO Market Outlook analyzes the market dynamics, drivers and resistors and assesses the structure of the market. China and India are discussed as destinations for outsourced manufacturing including analyses of regulatory changes and patent protection. Industry strategies are detailed and critically examined. Key players in the global, Chinese and Indian markets are also assessed. The industry trends are examined and used to map out the future of the industry including the impact on the landscape of players.

Key features of this report

• Sizes the CMO market, including a breakdown of primary secondary and biomanufacturing with forecasts to 2014.
• Details market drivers and resistors against the background of pharmaceutical market dynamics.
• Separate forecasts to 2014 of the Chinese and Indian API and finished dose markets.
• Profiles the key global players in the CMO market as well as those in China and India.
• Examines key industry strategies in the context of the market trends.
• Reveals trends and their effects on the future of the industry

• Save time and money in research with the report’s up to date review and analysis of all the important trends in contract manufacturing.
• Develop deeper insight into the size and growth of the global CMO industry by utilizing the report’s market forecasts.
• Assess your organization’s outsourcing strategy and understand how manufacturing costs can be reduced in the future by forming alliances with CMOs and moving manufacturing to offshore destinations.
• Identify the leading players in the CMO market, including Indian and Chinese providers.
• Anticipate where the future CMOs will be placed and make your outsourcing decisions as effective and economical as possible by understanding the current and future contract manufacturing industry dynamics.

1. Cost cuts drive outsourcing: Financial pressures brought on by declining productivity and the threat of patent expiries are driving pharmaceutical companies to outsource an increasing range of functions across the value chain.
2. Ensuring regulatory compliance: The sponsor or pharmaceutical company is ultimately responsible for the manufacturing process, whether externally or internally provided. In fact, the FDA considers contract facilities as an extension of the pharma company’s own facility. All facilities involved in the manufacturing or testing of a drug product are required to adhere to the portion of the cGMPs that apply to their operations.
3. Biomanufacturing: An increasing number of top drugs will be biologics, driving up manufacturing demand. Currently, most biomanufacturing capability rests with innovator companies and a few CMOs. Developing resources in this area is a key imperative for CMOs in the future.
4. Strategic outsourcing: The sale of captive facilities means that pharma companies increasingly outsource strategically rather than based on short term need.
5. Globalization / Offshoring to India & China: To become the offshoring destination of choice for drug manufacturing, China and India must comply with Western manufacturing standards to ensure safe and effective drugs. It will have to enforce stronger measurements in controlling domestic suppliers of raw material as well as collaborating more closely with foreign regulatory bodies.
6. While the expanded Asian business potential and outsourcing capabilities offer greater cost-saving and revenue-growth opportunities, Western pharmaceutical companies must carefully navigate the challenges that arise from operating in these regions.Though products made in China and India offer Western pharmaceutical companies attractive price incentives, most Asian CMOs still fail to demonstrate the rigor of regulatory compliance that Western companies demand and their customers expect.

• The contract manufacturing market was worth $22.2bn in 2009 and will reach $33.7bn by 2014. Biopharmaceutical manufacturing is the fastest growing industry segment.
• Sale of captive facilities, cost pressures, the rising number of products in development and the growth of the biopharmaceuticals industry are all driving the CMO market.
• Strategic outsourcing often entails establishing longer and deeper relationships with a limited number of providers. Many sponsors are selling their own facilities in order to reduce fixed costs.
• North America leads the world in biomanufacturing. Asia’s share of global biomanufacturing facilities is expected to double from 10% in 2009 to around 20% by 2013.
• Outsourced manufacturing is shifting from established markets in the West to emerging markets in the East.

• What will the size and growth of the global CRO market be through 2014?
• Which companies are current and future key players?
• What kind of business relationships will pharma companies and CMOs establish in the future?
• What are the drivers and resistors of the CMO market?
• What will be size and growth of the Indian and Chinese API and finished dose markets to 2014?
• How are Indian and Chinese CMOs placed for the future market?
• How are CMO service offerings evolving?

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