PharmSource - Bio/Pharma CapEx Trends - 2019 Edition

PharmSource - Bio/Pharma CapEx Trends - 2019 Edition

PharmSource - Bio/Pharma CapEx Trends - 2019 Edition


Capital Expenditure (CapEx) compound annual growth rate (CAGR) of public pharma companies increased by 4.7% between 2014 and 2018, with mega or large cap collectively accounting for approximately 75% of the total 2018 Capital Expenditure (CapEx) spending despite accounting for less than 5% of the companies analyzed. Moreover, five mega cap bio/pharma companies accounted for 27% of the Capital Expenditure (CapEx) in 2018. These findings highlight exactly why contract manufacturing organizations (CMOs) find it hard to improve the outsourcing rates from mega or large pharma companies, which often invest in their own manufacturing capabilities/facilities rather than choosing to outsource.

The general trajectory is that Capital Expenditure (CapEx) is rising for all of the different market cap categories with the mega cap group’s expenditure rising the fastest. The largest public pharma companies have had their individual Capital Expenditure (CapEx) projects detailed since a completion date of 2016. In recent years, the largest public companies have heavily invested in biologic and injectable capabilities. The increasing amount of large pharma Capital Expenditure (CapEx) projects involving both active pharmaceutical ingredient (API) biologics (protein and peptide) and injectable manufacturing is influenced both by the shift of the drugs pipeline to biologics and to the lucrative nature of biologic and high-potency injectable sales.

The continuously rising overall Capital Expenditure (CapEx) across different market cap groups reflects the technological shift that the drug industry has been undergoing toward more complex drug production, from small molecule products to biologics. An increasing number of high-potency drugs are being trialed for oncology, and solubility technologies are more frequently needed for poorly soluble APIs. Even with their relatively modest levels of Capital Expenditure (CapEx), CMOs can continue to play a critical role in the bio/pharmaceutical industry, even for the mega cap pharma companies. Often, a CMO’s investments will be in the form of mergers and acquisitions (M&A) rather than Capital Expenditure (CapEx), because these contract service providers have a tendency to buy already-existing facilities from other CMOs or pharma companies rather than constructing new facilities.

Dual sourcing, where a product is both manufactured in-house and outsourced, has become a key part of the manufacturing strategy for many larger pharma companies as a way to manage supply chain risk and financial risk. Understanding why large pharma outsource their production for strategic reasons rather than out of necessity and adjusting contract manufacturing. Capital Expenditure (CapEx) can potentially yield manufacturing relationships for CMOs with lucrative pharma companies.

The latest report, “Bio/Pharma CapEx Trends - 2019 Edition”’, characterizes pharma companies Capital Expenditure (CapEx) through a number of quantitative dimensions, including by company market cap, growth rate, compared to their revenue growth, by company headquarter geography, and also characterizes the manufacturing services being gained or enhanced by Capital Expenditure (CapEx) projects.


  • This 32-page report gives an important expert quantitative analysis on the capital expenditure. Findings are based on the GlobalData's Financial Analytics tool, financials have been analyzed for 1,345 pharma companies. The 5 tables and 11 figures throughout the report illustrate major points and trends. This report is required reading for -
  • - CMO executives and strategic decision-makers: improves understanding of the dose CMO industry and a critical input for strategic planning efforts.
  • - Sourcing and procurement executives in bio/pharmaceutical companies: improving understanding of crucial components of the supply base that will provide insights for supplier selection and management.
  • - Suppliers of capital components
Reasons to buy
  • How are trends in CapEx related to company revenue?
  • What has been the CapEx growth trends between 2014-2018?
  • How do trends in CapEx vary by company market cap?
  • How do CapEx trend change by company HQ location?
  • What is the CapEx for leading public CDMOs?
  • Which pharma companies have the highest number of CapEx projects?
  • What CapEx projects were completed 2016-2018 or have a projected completion for 2019-2025 and which manufacturing services and facility locations are involved?

  • Executive Summary
  • Introduction
    • Table Composition of Bio/Pharma Companies, 2018
  • CapEx Overview
    • Table Figure 1: CapEx by Company Market Cap, 2018
    • Mega Cap
      • Table Figure 2: Comparison of CapEx Change to Revenue Change, 2014-2018
    • Large Cap
    • Mid Cap
    • Small Cap
      • Table Figure 3: CapEx Trends at Bio/Pharma Companies, 2014-2018
      • Table Figure 4: CapEx Trends at Bio/Pharma Companies 2014-2018 Compared to Base Year 2014
      • Table Figure 5: CapEx Spend and Growth Rate for Mega Cap Companies
  • CapEx by Company Headquarter Location
    • Table Figure 6: Total CapEx Spend by Company HQ Location
    • Table Figure 7: CapEx as a Proportion of Revenue by Country
    • Table Figure 8: Mid Cap CapEx as a Proportion of Revenue by Country
  • CapEx Relative to Other Financial Indicators
    • Table Figure 9: Cash Spent on Dividends, Share Repurchase, and CapEx by Mega Cap Companies (excluding Roche), 2014-2018
    • Table Figure 10: Capital Expenditure for Leading Public CDMOs, 2018
  • Nature of Capital Expenditure - What Is Being Built?
    • Table Analysis of Identified CapEx Projects with 2018 Completion or Later
    • Table Location of Identified CapEx Projects
    • Table Figure 11: Companies with the Highest Number of Projects Completed, 2019-2025
  • What it Means
  • Appendix
    • Methodology for Dataset Creation
    • CapEx Project Tables
      • Table CapEx Projects Completed 2016-2018
      • Table CapEx Projects Completed 2019 or Later
    • Key Opinion Leaders
    • Bibliography
    • About the Authors
    • Contact Us
    • Disclaimer

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