Bio-outsourcing set to rise over next 10 years

By Angela Coyle

- Last updated on GMT

Need for mammalian cell culture is driving bio-outsourcing, accord to market experts
Need for mammalian cell culture is driving bio-outsourcing, accord to market experts

Related tags Biotechnology Pharmacology

Biopharma will increase outsourcing of API manufacturing between now and 2025, research shows.

Patent expiration of biologics is driving demand for API production for biosimilars, according to Mashael Zaidi, of market research group Visiongain.

He estimates that the global contract biotech API manufacturing market is worth $4.01bn this year – up from its 2014 value of $3.72bn.

The US and EU, especially the UK, Germany, France, Italy and Spain, will continue to drive this demand, while emerging markets such as China and India will become more established as tighter national regulations allow them to compete on the global market, Zaidi told this site.

Companies will also continue investing in emerging biological drug production markets such as the BRIC (Brazil, Russia, India, and China) countries, South Korea and Singapore.

Fermentation and mammalian cells

The mammalian cell culture submarket presently accounts for more than half of CMO (contract manufacturing organisation) revenues, and will continue to dominate bio-outsourcing deals over the next ten years, Visiongain predicted.

Mammalian cell demand rests on production of monoclonal antibody (mAb) therapies. The success of existing biologic blockbusters will lead to many companies relying on contract API manufacturers to provide the production capability, Zaidi told us.

Microbial fermentation and other expression platforms are two other key submarkets to watch between 2015 and 2025. 

Risk-sharing partnerships

Biologics, biosimilar development, orphan drug development and next-generation antibody therapies will all play a key role in influencing the success of biotech CMOs from now until 2025, with the global market to grow with a high single-digit compound annual growth rate.

Outsourcing to CMOs offers different types of benefit to large and small biopharma, Zaidi believes:

Big pharma will be increasingly looking to cut costs, and outsourcing not only saves the high cost of building facilities, but the lower cost will also help drug makers meet pricing pressures and still profit.​”

Meanwhile, smaller pharma companies outsource to avail of expertise and gain entry to markets they would otherwise be unable to reach.

The future will also see more strategic partnerships in biopharma, as CMOs and drug companies turn to alliances to provide “capacity, technology and expertise that the other partner may lack​.” Creating capacity or acquiring the technology alone would be costly, but a partnership lessens risks such as overcapacity, said the expert.

Our analysis shows the biotech API manufacturing services market will achieve high revenue growth over the forecast period to 2025. Interest in that field grows, as it is cost-saving to outsource compared with building new facilities or investing in biotechnologies,​” he told us.

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