A Deeper Look At What's Driving Dependence On Biotech Contract Manufacturers

By Priyanka Bhendale, assistant manager – Healthcare Market Research, Markets and Markets

As the demand for biopharmaceuticals, cell therapies, gene therapies, and other biotech products continues to rise, coupled with approvals of biologic drugs and an increase in chronic disease incidences, the biotechnology contract manufacturing market has witnessed exponential growth, becoming an integral component of the global biotech ecosystem.

As of 2023, more than 25 key players and SMEs/startups across various regions are leading the $16.6 billion biotechnology contract manufacturing market, propelled by strategic investments in commercial and clinical operations. These companies are developing several molecular types, including monoclonal antibodies, cell and gene therapies, antibody-drug conjugates (ADCs), vaccines, and therapeutic peptides and proteins. Notably, expansion efforts by industry giants like Catalent and Thermo Fisher Scientific are further bolstering this growth trajectory.

For instance, in October 2022, Catalent expanded biologics cGMP analytical capabilities at its facility in Kansas City. This added two new analytical development laboratories, which support the growth in demand for both traditional biologics and advanced biologic modalities programs. With such momentum, the biotechnology contract manufacturing market is forecast to reach $24.8 billion by 2028, a steady CAGR of 8.3% from 2023 to 2028, as indicated by data from MarketsandMarkets.

This growth trajectory is significantly influenced by increased investments in research, particularly in novel therapeutics such as cell and gene therapy. The increasing application of ADCs, a class of targeted cancer therapies, is also playing a pivotal role in the expanding biotech contract manufacturing sector.

We will look at the factors driving the growth of global biotechnology contract manufacturing, technology disruptions, and market trends at the molecule type, product, and regional levels in this article.

Biologics And Biosimilars Approvals Surge, Propelling Market Growth

The biotechnology contract manufacturing market (BCMM) is experiencing a significant shift driven by increasing demand for biologics and biosimilars. These two trends are interconnected and are reshaping the landscape of contract biomanufacturing. The production of therapeutic proteins and drugs presents a promising opportunity for the BCMM.

With advancements in genetic engineering technologies, companies are exploring the use of genetically modified organisms (GMOs) to produce complex biopharmaceuticals. This includes therapeutic proteins and peptides, antibodies, ADCs, and other therapeutics that can be more efficiently and cost-effectively manufactured in GMOs compared to traditional methods.

In November 2023, PlantForm Corporation and SwiftPharma signed a contract manufacturing agreement. With this agreement, SwiftPharma will help PlantForm to advance the development of biosimilar pembrolizumab (an immunotherapy drug widely used to treat melanoma and several other types of cancer) by providing access to a plant-technology-based GMP manufacturing facility to produce the drug initially for preclinical and clinical studies and, in the longer term, for commercial production and sales.

In addition, the biosimilar market is another significant driver of the BCMM. With patent cliffs looming for several biologics, the demand for biosimilars is expected to surge. As of April 2024, approximately 60 to 70 biosimilars were undergoing pipeline studies, with expectations that around half of them will be launched within the next three to four years. This growing pipeline and the increasing approvals of biologics are poised to significantly expand the pool of available therapeutics. Consequently, the market is expected to be driven by this influx of biosimilars and biologics offering a wider range of treatment options for various diseases and conditions.

Disruptions Shaping The Future Of The Biotechnology Contract Manufacturing Market

Next-generation therapeutics

The emergence of new modalities such as cell and gene therapies is driving the demand for specialized capabilities found in biotechnology contract manufacturing. Cell and gene therapies are one of the most active areas of research and investment in the development of medicine. This has led to an increased demand for cell and gene therapy development and manufacturing. As of April 2022, more than 20 cell and gene therapies have been approved by the FDA.

Over the last decade, few cell and gene therapies have entered the market. However, based on the pipeline of products in Phase 3 clinical trials, the number of approvals is expected to skyrocket soon. Up to 21 cell therapy launches and 31 gene therapy launches, including more than 29 adeno-associated virus (AAV) therapies, are expected in 2024. Thus, the growing number of cell and gene therapy candidates, coupled with their rapid progression through the various phases of clinical development and their complex manufacturing process, are increasing the demand for facilities that offer manufacturing services for these therapies.

This surge in the cell and gene therapy market is expected to drive the manufacturing services market for these therapies. These factors are likely to create lucrative growth opportunities for the biotechnology contract manufacturing market.

Advanced genomics and genetic engineering technologies

The intersection of advanced genomics and genetic engineering technologies with the BCMM creates a dynamic ecosystem that drives innovation and growth in the industry.

First, the development of novel genetic engineering tools like CRISPR-Cas9 and next-generation sequencing technologies opens new avenues to produce genetically engineered pharmaceuticals and biologics. These technologies allow for precise manipulation of genes, leading to the creation of more effective and targeted therapeutics. In turn, this enhances the demand for contract manufacturing services to scale up production and bring these products to market. Furthermore, the integration of these advanced technologies into the BCMM landscape enables manufacturers to streamline processes, improve efficiency, and reduce production costs. For example, next-generation sequencing technologies can be utilized for quality control and validation of genetically engineered products, ensuring compliance with regulatory standards.

Artificial intelligence and machine learning applications

The integration of artificial intelligence (AI) and machine learning (ML) in the design and optimization of bioprocesses is revolutionizing the BCMM, creating a highly interconnected ecosystem that drives efficiency, cost reduction, and accelerated time-to-market for biopharmaceutical products. AI and ML technologies offer the capability to analyze vast amounts of data and optimize complex bioprocesses with precision and speed through process modeling, quality control, predictive maintenance, and real-time monitoring of production parameters.

Biologic Drug Substance Manufacturing Vs. Biologic Drug Product Manufacturing

Based on type, the biotechnology contract manufacturing market is segmented into biologic drug substance manufacturing and biologic drug product manufacturing.

Biologic drug substance manufacturing has the higher market share, mostly for the following reasons:

• increasing global pipeline of complex biopharmaceutical products,
• the demand for specialized manufacturing facilities, equipment, and operational expertise,
• strong R&D investments for the research of novel therapies for untreated diseases, and
• the increasing demand for biotechnology products.

According to Statista, there were more than 21,000 drugs in the global R&D pipeline in 2023. Also, the FDA approved 71 new drugs in 2023; out of these, 48% of new approvals were biologics. Moreover, the demand for biologic drug substance contract manufacturing is expected to be the highest among smaller biotech companies that hold intellectual property rights for novel biologics.

This has led to the incorporation of cutting-edge production methods like continuous manufacturing and single-use technologies aimed at enhancing operational efficiency and adaptability. Additionally, partnerships and collaborations between pharmaceutical firms and contract manufacturing organizations are increasing for biologic drug product manufacturing, allowing for the modification of manufacturing processes and cost-effective solutions.

In January 2023, AbbVie collaborated with Immunome for the discovery and development of first-in-class antibody therapeutics. This is expected to drive the growth of biologic drug substance manufacturing among CMOs.

Service Type Aspects Of Biologic Drug Product Manufacturing

Based on service, the biotechnology contract manufacturing market is segmented into the following services:

• manufacturing,
• formulation and fill/finish,
• packaging and labeling services,
• analytical testing,
• quality control, and
• regulatory support.

The manufacturing services segment accounted for the largest market share in 2023, followed by the formulation and fill/finish services segment.

The formulation and fill/finish services segment is expected to register the highest CAGR during the forecast period owing to increased outsourcing of these services due to expensive in-house operations for fill/finish, extreme scrutiny by regulatory agencies of the fill/finish step, and the rising number of CMOs specializing in viral vector and plasmid DNA manufacturing.

Advances in fill/finish technologies and equipment have improved their efficiency, accuracy, and sterility. Automated systems, robotics, and innovative filling techniques enable faster, more precise, and reproducible filling operations. These technological advancements drive the growth of the fill/finish process by offering increased productivity, reduced human errors, and enhanced quality control.

Rapid Growth In North America's Biotechnology Contract Manufacturing Sector

North America is witnessing significant growth in its biotechnology contract manufacturing sector, primarily driven by the strength of its robust pharmaceutical and biotech industries. Key factors contributing to the expansion of the biotechnology contract manufacturing market in North America include the presence of a well-established pharmaceutical industry, rising demand for biosimilars and biologics, and the increasing outsourcing of manufacturing services by pharmaceutical and biopharmaceutical companies in the region.

The region's pharmaceutical and biopharmaceutical companies are increasingly opting to outsource manufacturing services, leading to a notable expansion in the contract manufacturing market. This trend is supported by North America's access to state-of-the-art manufacturing technologies, making it a prime location for CMOs. Some of the examples of expansions by key CMOs in this region are:

• In August 2023, AGC Biologics expanded cell therapy capabilities at Longmont, Colorado, site with addition of more than 30,000 square feet, new segregated, multiproduct suites feature state-of-art modular clean room design, flexible capacity configuration, and the latest cell therapy equipment for open and closed processes.
• In April 2022, Catalent announced an investment of $350 million to expand biologics drug substance and drug product manufacturing and fill/finish capabilities at its Bloomington, Indiana, facility. Earlier this year, Catalent and Novo Holdings announced that Novo would acquire Catalent and sell three out of more than 50 facilities to Wegovy-maker Novo Nordisk, including the Bloomington fill/finish site. Novo Holdings has a controlling interest in Novo Nordisk.

Global Expansion Of Biotechnology Contract Manufacturing Market Players

Some of the leading players in the biotechnology contract manufacturing market include:

• Lonza, Switzerland
• Thermo Fisher Scientific, U.S.
• Catalent, U.S.
• Samsung Biologics, South Korea
• WuXi Biologics, China
• Boehringer Ingelheim International, Germany
• Fujifilm Holdings, Japan
• AbbVie, U.S.
• Eurofins Scientific, Luxembourg
• GenScript Biotech, U.S.

These companies provide standalone and integrated manufacturing services with a flexible geographic reach. They have adopted marketing strategies such as agreements, collaborations, technology advancements, partnerships, acquisitions, and expansions to expand their global presence. Some of their strategic initiatives are described below.

• In March 2024, Fujifilm Diosynth Biotechnologies announced that it has expanded its manufacturing agreement with Argenx to provide drug product and finished goods services for efgartigimod, a monoclonal antibody (mAb) fragment that targets the neonatal Fc receptor (FcRn) in patients with severe autoimmune disease.
• In September 2023, Merck announced that it will provide integrated services for the critical stages of mRNA development, manufacture, and commercialization, including product and testing. The company has built two new GMP-grade mRNA drug substance manufacturing facilities in Darmstadt and Hamburg, Germany.
• In June 2023, Samsung Biologics entered into an agreement with Pfizer for long-term commercial manufacturing of Pfizer’s multi-product portfolio.
• In August 2023, AGC Biologics completed expansion of a Cell & Gene Center of Excellence production site at its Milan, Italy facility to support clinical- and commercial-stage development and manufacturing of adeno-associated and lentiviral vector development for in–vivo and ex-vivo gene therapy applications.
• In February 2023, Elektrofi, a biotechnology company, announced a contract manufacturing agreement with Thermo Fisher Scientific to support the manufacturing of Elektrofi’s ultra-high concentration subcutaneous products.
• In January 2023, Catalent agreed with Sarepta Therapeutics to support the manufacturing of Sarepta’s most advanced gene therapy candidate.
• In January 2023, Thermo Fisher Scientific expanded its global biologics and sterile manufacturing capabilities in Hangzhou, China. This supports the pharma services demand from China as well as the Asia Pacific region.
• In January 2022, WuXi Biologics entered into a licensing agreement with GSK for using WuXi Biologics’ proprietary technology platforms. Under this, GSK was granted an exclusive global license for the research, development, manufacturing, and commercialization of bispecific antibodies.
• In July 2022, WuXi Biologics announced a 10-year investment plan to expand the company’s research, development, and large-scale drug substance and drug product development and manufacturing.

Conclusion

CMOs offer valuable expertise, infrastructure, and flexibility to biotech companies navigating the complexities of drug development and regulatory requirements. Through strategic collaborations with CMOs, biotech firms can accelerate product launches, reduce financial risks, and focus on core research and development activities.

The biotechnology contract manufacturing market is witnessing remarkable growth, driven by advancements in biotechnology tools, increasing demand for personalized medicines, and the rise of novel therapies such as cell and gene therapies and monoclonal antibodies.

Key players like Lonza, Thermo Fisher Scientific, AbbVie, Catalent, and WuXi Biologics are pivotal in shaping the landscape of contract manufacturing services, offering diverse capabilities in biologics production. As the market continues to expand, fueled by globalization, regulatory changes, and the need for cost-effective solutions, the contributions of contract manufacturing organizations will remain essential in meeting the evolving demands of the biopharmaceutical industry.

About The Author:

Priyanka Bhendale has more than nine years of experience in healthcare market research and consulting across pharmaceutical, biotechnology, and medical device verticals. She acquired knowledge and expertise in market assessment, market sizing and forecasting, end-user perception analysis, opportunity analysis, and competitive intelligence studies and has worked on growth engagements across bioprocessing technologies, cell culture technologies, and contract research and manufacturing.