This is arguably the most exciting time to be a professional in the CDMO market, which is going through a fascinating transition. Over the last decade, the life science sector has enjoyed robust growth. Funding, research budgets and new jobs have all been on the rise.
Today, our industry is essential to the global COVID-19 response. Public and private investments continue to rush into the sector, fast-tracking discovery and production of therapeutics, antibody tests and vaccines. This has resulted in a spike in growth for the CDMO market. However, it’s not just an investment that’s exciting for everyone. The market is evolving, and businesses are embracing new ways of working too.
To learn more about these new trends, I spoke to Tia Lyles-Williams CEO & Founder of both the CDMO LucasPye BIO and of Helaplex - the first commercial life science co-working space, with a built-in accelerator for start-ups and virtual biotech companies.
Our discussion started with biologics. After all, it’s a hard topic to ignore. By 2026, the global market value of biologics is expected to reach $509.23 billion, registering a CAGR of 9.06% during the forecast period (2021-2026).
Biologics are nothing new. They’ve been around since human insulin was introduced in the early 1980s. However, we’ve recently seen huge investments in the space. That’s thanks to the rise of personalised healthcare, with biologics capable of creating more targeted treatments (which can vary based on the patient or the disease).
Tia explained that is down to how targeted we can be with genomic therapy, making corrections, deletions, replacements and so on. And this is only going to get better, thanks to the innovative nature of the NGS market.
With approval processes becoming more accommodating, we’re also seeing more biologics come to market – whether that be mRNA, cell & gene therapy, or other areas of genomics.
Healthcare is only going in one direction: towards more personalised treatments. So, with biologics on the rise, I was keen to ask Tia if she thought this spelt the end for the small molecule market. She didn’t think so:
Small molecule companies aren’t going anywhere. It’s not the death of them. But I don’t think they’ll make up the majority of the market going forward.
While it’s certainly not the death of the small molecule market, the CDMO market is diversifying. Companies are collaborating to produce more Antibody Drug Conjugates (ADCs), which are created by binding a combination of biologic based molecules and chemical-based molecules. They, therefore, have a biological mechanism but with small molecule properties.
Should small molecule CDMOs continue to thrive, Tia claimed that ADCs are essential. However, this requires collaboration with biologics CDMOs and is likely to encourage a spike in activity within the M&A market.
Biologics have more capital right now, whereas small molecule companies are looking for a way to survive and keep up with the market. And so being involved in an M&A with a biotech company or biologics CDMO is a great asset to them and vice versa.
Collaboration is also being achieved through co-working spaces, which continue to be on the rise. This trend originally emerged thanks to advances in technology and automation, however, COVID-19 restrictions have forced businesses to rethink how they work. In turn, more and more CDMOs are embracing co-working spaces like Tia’s Helaplex.
While companies still plan to invest millions of dollars increasing their capacity, it’s become decreasingly attractive to do this by investing in new facilities. Instead, CDMOs are outsourcing different phases of drug development and manufacturing.
The market has changed. Companies and start-ups are not building manufacturing facilities. Investors are not interested in that. They're very quick to say ‘Hey, can you outsource this?’ because of the cost of building a facility, as well as the timeline.
This is especially common among start-ups that are finding this a cheaper and more efficient way to market.
Although modular facilities are becoming more popular – because they’re quick to build onsite – the point of the matter is that, when you're a start-up and you're trying to figure how to reduce costs, outsourcing is the way to go.
Outsourcing continues to be an attractive route to market for CDMO start-ups, so I expect to see this more and more in 2022. Likewise, I’m excited to see the biologics market continue to grow – which could force some small-molecule CDMOs to pivot their businesses to meet the demands of the life science sector.
With innovation prevalent throughout, it’s safe to say that this is a fascinating time for the CDMO market.
Is this the most exciting time ever for the CDMO market? I’d love to hear about your experiences over the last 18 months and get your feedback on this article.
What are you excited about in 2022? Let me know via my email Harriet.Wheat@lifesci-cm.com.
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