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Bio-CMO sector to grow over 40% on Big Biopharma's burgeoning pipelines

Dan Stanton

By Dan Stanton+

24-Apr-2015
Last updated on 24-Apr-2015 at 16:21 GMT2015-04-24T16:21:52Z

Biologics demand a boon for CMOs, but a shift to single-use could see more competition
Biologics demand a boon for CMOs, but a shift to single-use could see more competition

Cheaper disposable manufacturing techs and increased demand for outsourced production will see more CMOs enter the contracting sector according to HighTech Business Decisions

The research firm predicted that drugmakers will outsource $4.1bn (€3.8bn) worth of biomanufacturing work a year by 2019  arguing that the economics of drug development will drive the increase.

The use of contract manufacturing organisations (CMOs) will grow across the board but the needs of Big Biopharma is expected to be the key driver, pushing their current outsourcing levels of 16% to 34% in the next five years, according to HighTech analyst William Downey. 

“[These firms] will devote a higher percentage of their manufacturing budgets to outsource services as a result of the strategies they are implementing,” he told us, explaining that extra capacity will be needed to support the launch of a growing number of biologics pipelines.

“We see these companies using biopharmaceutical CMOs because of their need for additional capacity, their need to access different capabilities than what they have internally, and/or their desire to establish a secondary supply for risk mitigation.”

The prediction runs counter to opinions voiced at the FT Global Healthcare conference in London last November when firms like Novartis said they were more likely to keep complex biologics manufacturing in-house.

Similarly, both Janssen  and Eli Lilly  have told Biopharma-Reporter.com of their desire to keep complex manufacturing in-house.

Biologics CMO market to grow

If HighTech’s predictions come to fruition, Downey said there could be an influx of new players and competitors in the biologics contract manufacturing sector, driven by the adoption of single-use bioreactors and other disposable technologies.

“The cost and time required to add disposable capacity is less than that of stainless steel capacity.  This reduces the barriers for new entrants into the Bio-CMO market, which will result in a more competitive environment.”

Currently HighTech’s report counts the number of firms actively marketing themselves as CMOs and CDMOs at over 500, yet only 90 – around 17% - of these offer large-molecule recombinant protein capabilities.

These are split between commercial manufacturers with selective clinical capacity (Lonza, for example), selective firms with excess commercial capacity (AbbVie, or GSK, for example, looking to sell excess space), clinical firms with commercial or development capabilities, and those which only do development (generally CMOs associated with hospitals or public institutions).

Total available tank capacity stands at around 650,000L, the majority of which (66%) comes from commercial CMOs, yet as this sub-sector represents the smallest proportion of the Bio-CMO industry, more players will have to enter the commercial sphere to cater for the growing demand.

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