Contract manufacturing market set for return to growth
pharmafile | August 16, 2011 | News story | Manufacturing and Production |Â Â contract manufacturing, pharma manufacturing newsÂ
The pharmaceutical contract manufacturing sector looks set for a return to historical growth over the next five years, after a tough operating environment in 2009 and 2010, according to a new market research report.
The Visiongain report predicts that global contract manufacturing revenues will grow 8.7% each year to reach $62.1 billion by 2016. By 2021, the market will be almost double the size it is today.
A continuing low rate of new molecular entity (NME) approvals because of high safety and efficacy barriers erected by regulatory authorities has been hurting the CMO sector of late. Meanwhile, an increased industry-wide focus on generic drugs – which tend to be made in-house because of lower margins – has also been squeezing CMOs.
Fortunes look set to change though, according to Visiongain analyst Richard Lang, as the pharmaceutical industry continues to move away from tactical outsourcing towards strategic manufacturing alliances that will allow greater focus on other activities such as R&D and marketing.
“Industry will look more to long-term relationships with a few selected CMOs as the decade goes on,” said Lang.
“Becoming a full-service CMO or specialising in a niche area will best allow contract manufacturers to take advantage of these strategic partnerships.”
Manufacturing of active pharmaceutical ingredients is the largest CMO market sector, accounting for 71.1% of the total market last year.
API manufacturers in India and China will see increasing demand for their services, says Visiongain, while demand for generic and highly potent APIs will be the main drivers for the market, along with growth in the biotechnology sector.
The report – entitled Pharmaceutical Contract Manufacturing: World Market Outlook 2011-2021 – also predicts that consolidation will continue to be a feature of the CMO sector, with larger players buying out pharma facilities or smaller CMOs to boost their development and manufacturing capabilities.
Companies offering specialised manufacturing services, such as lyophilisation and complex molecule production will also benefit throughout the decade, it says.
Phil Taylor
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