Seqens eBook - 26

What's Driving the CMO Market? -
The Opportunities and
Challenges Ahead
Ed Price, CEO, Seqens CDMO North America
Judging by a resurgence of IPO activities since the new year and
increasing product commercialization news in the pharma and
biopharma industries, the future of these industries is clearly on the
rise. And as the market for generics continues to heat up, so too does
the role of CMOs as strategic outsourced development partners.
CMOs help biotechs accelerate their development timelines and
position them for commercial success. But what are the drivers of this
resurgence in activities? What makes the role of the CMO ever more
important? And what are the challenges that lie ahead?

As the opportunity for pharma and
biopharma firms to seize market share
and bring much-needed drugs to market
continues to accelerate, CMOs are
sharing in the excitement and rewards.
Those that can adapt to changing
product developments and regulations,
bringing innovative technologies and
wide-ranging expertise to bear on critical
projects will come out on top.

According to a report from Mordor Intelligence, the market for CMOs
is expected to increase from $58 billion in 2014 to $84 billion in 2020.
The use of CMOs clearly enables sponsors to accelerate product
timeframes, reduce costs in order to better compete internationally
and efficiently address regulatory and compliance issues. The market
for CMOs will continue to grow because of several key factors:
Growth of generic drug market. As drugs costs continue to rise,
the growing demand for lower cost alternatives to novel therapies
will surge. The reasons include the time and investment necessary
to bring ever-more complex drugs to market, as well as rising
GDUFA fees and increased oversight. Since many traditional pharma
companies lack such expertise, they may turn to CMOs who have the
expertise in developing and manufacturing generics and biologic
drugs including biosimilars. Yet even in the generics space, prices
continue to soar, partially due to acquisitions and consolidations in
the pharma industry, which leads to less competition, as well as a
shortage of raw materials for generic drugs.

capacity and few internal resources. They are turning to CMOs to
provide not only the skills but labs and other physical resources.
Looming patent expiries. As aging patents begin to expire, and
competition heats up, pharma firms are recognizing the urgency
in leveraging novel, proprietary technologies to achieve product
differentiation - expertise and resources provided by CMOs. For this
reason, we can expect to see many CMOs transform from providers
of niche expertise and manufacturing capabilities to providing
integrated services that help sponsors meet aggressive timelines.

Increasing global demand. As incomes rise and populations age,
medicine is in higher demand than ever before. Because of this,
there has been a more robust pipeline of drug candidates and an
increasing rate of FDA NDA/BLA approvals. Pharma firms are working
aggressively to be the first to bring new therapies to market, and
capitalize on the increasing opportunity. The expertise of CMOs lends
itself to the increasing complexity of both small- and large-molecule
drugs and highly potent compounds that require specialized skills
and capabilities.

There are huge growth opportunities for CMOS since many

Deluge of start-ups. As opportunities abound for pharma firms,
there is a growth in small, virtual startups with no manufacturing

strategic partnerships with fewer, integrated suppliers, technological

Pharmaceutical Outsourcing |

sponsor companies do not have access to all of the state-of-theart technologies that are necessary to develop and commercialize
complex APIs and formulated drug products. CMOs provide an
efficient and cost-effective way to gain access to the most advanced
technical solutions. As a result, CMOs are focused on providing
advanced technical capabilities, and innovative technologies that
have the greatest chance of attracting sponsor firms. As sponsor
firms continue to pare down their vendor numbers and establish
capabilities will only become greater differentiators.
26

| pharmoutsourcing.com



http://www.pharmoutsourcing.com

Seqens eBook

Table of Contents for the Digital Edition of Seqens eBook

Contents
Seqens eBook - 1
Seqens eBook - Contents
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