Market Trends of Global Active Pharmaceutical Ingredients CDMO Industry
The Synthetic Segment is Expected to Hold the Major Market Share
Synthetic active pharmaceutical ingredients (API) are small molecules that comprise a significant portion of the market, with numerous commercially available drugs. Various market player strategies, such as expansion, approvals, collaborations, and agreements, are expected to increase market growth during the forecast period.
The growing burden of chronic diseases worldwide fuels the need to develop and manufacture effective pharmaceuticals, thus boosting the synthetic API segment growth. For instance, according to the report published by the World Heart Federation Organization in April 2023, around half a billion people are affected by cardiovascular diseases worldwide. Such a high burden of cardiovascular diseases involves adopting synthetic API, thus driving the segment growth.
As a result, many pharmaceutical companies started expanding their manufacturing footprint, and some began to rethink their footprint to plan for the years ahead. The largest source of additional capacity was CDMOs.
The market is projected to expand due to strategic actions from market participants, including investments, collaborations, and acquisitions. For instance, in December 2022, Almac Group completed the initial stage of its multi-million-pound investment program, expanding its GMP API facility. This investment aims to establish manufacturing centers of excellence dedicated to small molecule API production at 200-300 kg scales and boost capacity for peptide API production. Additionally, in October 2022, Cambrex expanded its small molecule development and manufacturing capabilities by investing in a new 21,000-square-foot research and development facility in Minneapolis, Minnesota. Thus, such investments by the companies to expand synthetic API manufacturing are anticipated to drive segment growth.
Therefore, owing to the above-mentioned factors, such as the growing burden of chronic diseases and market players' strategies and investments, the segment is anticipated to grow during the forecast period.
Asia-Pacific is Expected to Hold a Significant Share in the Market During the Forecast Period
Asia-Pacific is expected to grow significantly and contribute to the API CDMO market growth during the forecast period. Factors such as rising investments by pharmaceutical companies, government initiatives, and market player strategies are anticipated to drive market growth in the region.
Increased investments in pharmaceutical production are expected to drive the need for API CDMO and contribute to market growth in the region. In the annual report for 2022-23, published by the Department of Pharmaceuticals, Government of India, in March 2023, it was stated that India is the third-largest pharmaceutical producer globally in terms of volume. The country achieved an annual turnover of USD 42.34 billion (INR 3,44,125 crore) for the fiscal year 2021-2022.
Moreover, government initiatives to boost API manufacturing are expected to propel market growth in the region. For instance, in February 2023, under the Production Linked Incentive (PLI) scheme, India initiated API and bulk drug production for critical life-saving medications and sophisticated medical equipment like computed tomography (CT) scans and magnetic resonance imaging (MRI) machines. With 51 approved projects, 14 have been commissioned and are actively manufacturing these drugs. Thus, such initiatives are anticipated to contribute to the market growth in the region.
Market players' business expansion strategies are also expected to contribute to market growth. For instance, in January 2024, AGC Biologics developed a new production site at AGC Inc.'s Yokohama Technical Center in Japan. This strategic move aims to provide high-quality pharmaceutical development and manufacturing services, catering to the growing demand for biologics and small active pharmaceutical ingredients. The facility is scheduled to become operational by 2026. In addition, in November 2022, Athenex Inc. completed the sale of its equity interests in Chinese subsidiaries, primarily encompassing its API manufacturing operations in China, to Chongqing Comfort Pharmaceutical Inc. (Chongqing Comfort). Thus, such strategies are expected to boost the demand for API CDMO in the region and propel market growth during the forecast period.
Therefore, factors such as rising pharmaceutical investments, government initiatives, and market player strategies are expected to drive API CDMO market growth in the region during the forecast period.
