CADD: Opportunities to Optimize the Growing R&D Expenses

Given the increase in complexity of the drug discovery process, the overall R&D spending in the pharmaceutical contract manufacturing / biotechnology sector has grown from around USD 128 billion in 2008 to USD 158 billion in 2017. As a result, the industry is currently under tremendous pressure not only to meet the expectations of a growing patient population, but also to identify ways to mitigate the risks associated with novel drug discovery programs to avoid failure. Over the years, various computational tools and services have emerged, enabling the selection, modelling, analysis and optimization of potential lead candidates. The predictive power of computer aided drug discovery providers (CADD) has proven to be extremely advantageous, allowing researchers to bypass the random screening of billions of molecules across hundreds of biological targets. As a result, players offering novel in silico drug discovery services, such as CADD, have now become an integral part of the pharmaceutical industry.

CADD Service Providers Offer a Multitude of Capabilities Supporting Drug Discovery Initiatives

Over 120 firms are actively involved in providing CADD services for drug discovery; of these, around 15 players claim to have the capabilities to offer services for all steps of discovery

As per Roots Analysis, there are more than 120 service provides having capability to offer CADD services. Majority of the service providers are headquartered in North America.

These Capabilities Rely on a Variety of Popular CADD Approaches

The market landscape is highly fragmented with several new entrants; majority of the companies offer structure-based drug design focused on early stage drug discovery

Over 100 CADD service providers are majorly focused on lead optimization followed by hit-to-lead and hit generation for drug discovery.

The Global Market Landscape is a Mix of Several Small and Large Companies

Featuring the presence of small-mid sized and large firms, the CADD service provider landscape is well-distributed across various geographies.

Potential Cost Savings is Amongst the Key Drivers Behind the CADD Evolution

Amongst its many advantages, such as expediting discovery timelines and improving product success, CADD enables significant cost savings as well.

Novel Computational Approaches will Further Enhance the Predictive Power of Models

The integration of novel computational techniques, such as artificial intelligence and cloud based platforms, with CADD approaches is likely to revolutionize the drug discovery process.

As the Market Matures, Consolidation will Drive a Lucrative Exit to Several Small Entities

Given its lucrative future potential, multiple acquisitions are anticipated to take place in the foreseen future, wherein the relative valuation of a player is likely to be a key determinant.

Overall, We Anticipate a Steady Growth in the Long-term

Driven by the growing demand for effective therapeutics and increase in drug discovery efforts across various therapeutic areas, the market is expected to witness sustained growth in future.

The Opportunity will be Well-Distributed across Different Market Segments

The overall opportunity within the computer aided drug discovery market is anticipated to be well-distributed across the various steps of drug discovery steps, type of molecules and the concerned clientele

The CADD services market is fragmented across various segments including drug discovery steps, type of molecules and type of clientele. It is worth mentioning that lead optimization is likely to capture the largest share by 2030

The US and the EU will Likely Continue to be the Dominant Regions

The majority share is expected to be held by North America and Europe; however, Japan, China and certain other emerging markets are likely to grow at faster rate.

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