Biologics Contract Manufacturing – Current Interest of the Pharmaceutical Industry

Biologics represent one of the fastest growing segments of the pharmaceutical industry. This can
be attributed to the rapid pace of innovation in this field, driven by the need for effective and personalized pharmacological interventions. Although biopharmaceuticals offer significant profit margins and have demonstrated the potential to treat a myriad of disease indications, they are generally associated with high costs of development and complex manufacturing protocols. This has compelled many biopharmaceutical developers to outsource various aspect of their operations to biologics CMO. The biopharmaceutical contract manufacturing market is presently characterized by the presence of both niche, specialty biologics manufacturing companies, focused on early-stage development and production (preclinical and / or clinical scales), and one-stop-shops, which have, over time, acquired an extensive range of capabilities to cater to essentially all the product development and commercialization requirements of sponsors.

Need for Biologics Contract Manufacturing Operations

The following points illustrate the need for outsourcing biologics manufacturing operations to biologics contract manufacturers:

  • Manufacturing expertise and capabilities, including design, construction, and maintenance of a facility, required for production of biologics in-house involves high capital investments.
  • Requirement of higher biopharmaceutical manufacturing capacity products owing to the increasing demand for such drugs.
  • Advanced and complex technologies are required for manufacturing, as well as testing of biopharmaceuticals.
  • Availability of innovative platforms / technologies with biologics contract manufacturers, such as XS Technologies (Lonza), pAVEway microbial expression platform (FUJIFILM Diosynth Biotechnologies), Corynex protein expression system (Ajinomoto Bio-Pharma Services) and SCOPE technology (Batavia Biosciences), that enables production of various biologics with increased efficiency.

The above-mentioned factors have compelled many small developers, as well as certain pharma giants engaged in this domain, to outsource their manufacturing operations to contract service providers. Further, the increasing demand for biologics manufacturing companies capable of offering manufacturing and development services to biopharmaceutical developers has resulted in the establishment of several CMOs and CDMOs over the past few years. It is worth noting that most of the contract service providers engaged in this domain have profound experience in niche and emerging areas. In addition, the innate expertise and availability of required capabilities, as well as infrastructure, enables such service providers to effectively fulfil the requirements of their clients, while eliminating costly oversights and reducing chances of product failure. It is worth mentioning that the extent of outsourcing varies depending upon the nature of the project and other requirements. However, in some cases, simple procedures, such as cell bank characterization or virus testing, are outsourced. On the other hand, clients may also outsource the entire biopharmaceutical manufacturing process or only a particular step. It is also important to highlight that there are some virtual biopharmaceutical companies that choose to outsource almost all development and manufacturing activities, and just act as marketers / distributors of their products.

Commonly Outsourced Manufacturing Operations for Biologics

There are various types of biopharmaceuticals and a myriad of manufacturing platforms / technologies available for their production. The method of manufacturing such complex macromolecular products is seldom similar and are usually associated with high degrees of complexity. It is worth mentioning that several CMOs offer a wide range of services to cater to the manufacturing needs of biologics manufacturing companies, along with providing other services, using microbial expression systems, which include product characterization, formulation, and fill / finish. The availability of such organizations has significantly reduced commercial risk and deployment of capital to develop in-house facilities.

The below given figure provides an illustrative summary of the various services that are commonly offered by biopharmaceutical contract manufacturers.

Services Offered by Biologics CMO

Biologics Contract Manufacturing – Current Market Landscape

Owing to their technical, regulatory and financial superiority, developed nations, such as the US and the UK, have always dominated the contract manufacturing as well as the biopharmaceutical contract services market. However, in recent years, developing nations, such as India and China, have significantly improved their manufacturing capabilities and received the necessary certifications to provide full-fledged contract development and manufacturing services to the global biopharmaceutical industry. Presently, there are more than 305 industry players that claim to be engaged in the contract manufacturing of biopharmaceuticals for therapeutic purposes.

Owing to higher operating margins for FDFs as compared to APIs, majority (92%) of the biopharmaceutical contract manufacturers are actively involved in the manufacturing of FDFs. While this segment requires extensive technical knowledge and specialized containment facilities, the increasing demand for biologics presents optimistic growth prospects for the CMOs engaged in this domain.

Biologics CMO by Type of Service Offered

Industry Stakeholders Are Striking Partnerships to Strengthen Their Service Portfolio

Partnership activity has increased immensely over the years, involving the participation of both indigenous and international biologics contract manufacturers. The maximum number (24%) of partnerships were inked in 2020, followed by deals inked in the year 2021 (23%). The substantial increase in the partnership activity in biopharmaceutical contract manufacturing domain can be attributed to the growing initiatives taken by sponsors / collaborators in order to develop safe and effective vaccines for COVID19. Additionally, manufacturing agreements (33%) emerged as the most popular type of partnership model adopted by players engaged in the biopharmaceutical contract manufacturing domain. This can be attributed to the incessant efforts of players to further advance the development of their biologic product offerings, across different development phases.

Biologics Contract Manufacturing Partnerships and Collaborations: Distribution by Type of Partnership

Global Biologics Contract Manufacturing Market Trends

During our research, we estimated the biologics contract manufacturing market size under conservative, base and optimistic scenarios. As per the base case forecast scenario, biologics contract manufacturing size is estimated to grow at a CAGR of ~9.5%, forecast period during 2023 – 2035. It is worth mentioning that the high cost of constructing an advanced manufacturing facility is one of the key reasons for stakeholders to outsource their operations to CMOs engaged in this domain. In addition to being a lucrative cost-cutting strategy, outsourcing provides a platform for partnering and establishing strategic collaborations, which eventually help biologic drug developers to augment their expertise and efficiency.

Conclusion

Given the growing success of biopharmaceutical products, we believe that the demand for contract service providers in this domain is anticipated to rise further in the coming years. This can also be validated from the fact that, presently, biopharmaceutical developers are outsourcing more operations to third party service providers. Along with increase in outsourcing budgets, which have been on the rise in the recent years, CMOs have also secured significant investments from various sources in order to help expand their offerings. Further, many contract services providers have invested heavily in acquiring additional capabilities from other players and breaking ground on new facility expansions.

It is worth highlighting that there is a significant rise in the interest of stakeholders in biopharmaceutical contract manufacturing segment; this can be validated by the increase in partnership and funding activity within this domain. Further, the growing demand for biologics has compelled the players engaged in this domain to expand their existing capabilities / capacities in order to accommodate the future needs of their clients. In addition, as mentioned earlier, innovation in this field, coupled to the development of novel fermentation technologies, has further expeditated the growth of biopharmaceutical contract manufacturing market.

For detailed insights about this domain, check out our report on Biologics Contract Manufacturing Market