Biopharmaceutical Outsourcing Continues to Grow

At a special biopharmaceutical manufacturing track at the 2016 Drug Chemicals and Allied Trades (DCAT) on March 16, 2016, Bill Downey, head of the market research firm, High Tech Business Decisions, shared results from its latest survey on the contract manufacturing of biopharmaceuticals.

As he said, demand for outsourcing has been growing steadily, from $800 million in 1998, to $2.5 billion in 2014. It’s expected to reach $3.1 billion in 2016 and $4.1 billion by 2019, he said.

Capacity is growing by about 7% per year, Downey said, and hit 1 million liters in 2015. Utilization rates have moved from 65% in 2011 to 72% in 2016, and should reach 75% in 208 and 76% the following year, based on a survey of contract manufacturing organizations (CMOs) using a weighted average response, Downey said.

Development projects had declined from 2008 to 2011, but have since increased slightly. When only Phase I and Phase II projects are considered the number has been increasing by 25% since 2010. Companies with multiple sites devoted roughly 25% of their budgets to outsourcing last year, and expect that number to increase to 35% next year, Downey said.

North America is the largest market for outsourced services, growing by 6% per year, but Europe os growing faster, at 40%.  The rest of the world, particularly Asian markets, may hold 10% of the market or less, but demand is doubling every year.

Production has moved from 47% commercial in 2011 to 51% commercial in 2015, with Phase III moving from 23% to 24% over the same period and Phase I and II slipping slightly from 25% to 23% between 2011 and 2014, Downey said.

When surveyed about the importance of biosimilars, 50% of CMOs saw this as an important area, with 17% describing it as very important. The remainder said it was not significant, but Downey expects that to change. As a percentage of revenue, half of the CMOs surveyed said biosimilars projects account for 10-20% of revenues, and 17% of CMOs said biosimilars represented over 25% of revenue in the past year. “Biosimilars may not have a huge impact right now, but, for some CMOs they are already a significant portion of their business,” said Downey.

Interestingly, where 500 organizations now actively market themselves as pharmaceutical contract development and manufacturing organizations or contract manufacturing organizations (CDMOs or CMOs), Downey said, only 90 have large-molecule recombinant production capabilities.