The financial crisis has created an opening for a large group of players in the cdmo industry – private equity firms. Low valuation levels and low interest rates were combined to enable experienced investors to move into a sector with a very attractive long-term outlook. Private equity firms have brought new capital and financial expertise to the sector, along with the roll-up concept (i.e. making a first acquisition in the sector and then building is the skill and scope with additional acquisitions). Most importantly, private equity firms were able to recruit high-level employees to manage these CMOs, former executives of large bio/pharmaceutical companies as well as experienced co-operators. Large private equity firms such as Black Rock (Catalent), KKR (Capsugel) and JLL Partners (Patheon) have become significant presences in the sector. A second factor was the explosion of bio-pharmaceutical companies in the start-up phase, thanks to the maturity of biotechnology and the availability of external financing. Emerging bio/pharmacological companies have set up the queues of internet companies to access venture capital and the IPO market (IPOs). These start-up companies were unable or unable to create their own production sites and have become key customers of the emerging cdmo industry. To date, large biopharmaceering companies that have aged at that time, such as Vertex, Gilead and Shire, are trying to outsource some or all of their manufacturing requirements. The 40 years that pharmaceutical technology has served the biopharmaceman industry have been years of significant growth and changes in the way drugs are discovered, developed, manufactured and sold.
Contract development and manufacturing organizations have long played a role in the growth of the sector, but it is only in the last 20 years that they have become a critical element in the operation of biopharmacector companies. In view of the 40th anniversary of pharmaceutical technology, the evolution and prospects of the cdmo industry need to be reviewed. How has the bio/pharmaceutical wage industry evolved over the years and what about the future? Part -2 Link- pharmastate.blog/2019/03/26/part-2-quality-agreements-what-is-it/ The third interesting development is the way the CDMO industry caters to global biopharmacological companies (i.e. the 25 largest companies by turnover). Over the past six years, global bio/pharmaceutical companies have made more than $125 billion in investments in new facilities and equipment, much of which has been used to support their biologic pipelines. Outsourcing of production by global biopharmaceil companies has even declined over the past decade due to the strengthening of their internal capacity for the new generation of medicines. With high margins on new drugs, global bio/pharmaceutical companies are much better able to invest in new capabilities than CFPMOs. The cdmo industry is now robust and will remain an important part of the biopharmaceil industry. But considerable challenges lie ahead, and individual companies will need strong leadership, vision and operational discipline to succeed.
How to approach the global biotechnology and pharmacy sector is a critical strategic issue for CDMOs: the small and medium-sized pharmaceutical sectors are already highly imbued, so the growth of the cdmo industry will depend in large part on the sector`s ability to cover a larger share of the global bio/pharma production requirements. Big Pharma does not need capacity in the traditional way that CTMOs have provided it, but they are open to new service models that emphasize flexibility, technology and cost-and-risk sharing. A number of innovation CMOs have developed offerings that have effectively deconstructed the traditional cdMO offering in its components.