Market Place
CDMO Activity Tracker: Q2 sees more deals, partnerships, M&As and expansions
In April this year, our CDMO Activity Tracker had highlighted the favorable trends in the US$ 183.62 billion contract development and manufacturing organizations market. Over the second quarter, we saw those trends continue as the pharmaceutical industry increased its reliance on CDMOs to support them in the development of clinical candidates, candidate registration, market authorization and manufacturing.
Pharma companies are suffering from high R&D costs and capacity constraints. Moreover, these days, regulators are showing more rigor around authorizations and drug approvals. The stricter regulatory environment has further prolonged the time to market. As a result, the reliance of drugmakers on external partners for expediting the manufacturing process has increased. The second quarter saw several M&As and collaborations that support the growth of CDMOs.
The global CDMO market is dominated by players like Lonza, Catalent, Corden, Seqens, Thermo Fisher, Recipharm AB, Servier CDMO, Samsung Biologics, Siegfried, Wuxi Biologics, and Fujifilm Diosynth Biotechnologies. Many of the big CDMOs expanded their operations through capacity expansions, acquisitions and partnerships.
View CDMO Activity Tracker of Q2, 2022 (Free Excel Available)
Lonza, Catalent in expansion mode
In terms of revenue, the largest CDMO is Lonza from Switzerland, which posted a growth of 20 percent last year with sales of Swiss francs 5.4 billion (US$ 5.62 billion). Buoyed by its healthy performance, Lonza is in an expansion mode. In July, the company announced the setting up of a US$ 518 million fill-finish production facility in Stein, Switzerland. The facility is likely to be completed by 2026. In June 2022, Lonza signed an agreement with Pierre Fabre, wherein the Swiss CDMO will provide clinical drug product manufacturing for an oncology drug candidate discovered by the French drugmaker targeting solid tumors from its fill and finish facility in Stein. Lonza also completed a laboratory expansion project at its API manufacturing facility in Nansha, China, in March this year.
Another large CDMO, Catalent, saw a 29 percent increase in its revenue last year. With a turnover of US$ 3.998 billion, Catalent is also in an expansion mode. In April, Catalent acquired Erytech Pharma’s cell therapy manufacturing facility in Princeton, New Jersey, for US$ 44.5 million.
Catalent has also acquired VMIC Limited’s biologics development and manufacturing facility in Oxfordshire. The company plans to invest US$ 160 million to complete the building and equip it with capabilities to develop and manufacture biologic therapies and vaccines, including mRNA, proteins and other advanced modalities. The facility will expand its biologics capabilities in the UK and across Europe. Moreover, Catalent plans to invest US$ 350 million at its facility in Bloomington, Indiana, to expand biologics drug substance and drug product manufacturing capabilities. The site will have new bioreactors, syringe filling lines and additional lyophilization capacity. The expansion is expected to be completed in 2024.
Servier CDMO, part of the Servier group that had a turnover of €4.7 billion (US$ 4.78 billion) in 2020-21, offers a full range of drug product manufactuing and packaging services.
View CDMO Activity Tracker of Q2, 2022 (Free Excel Available)
HPAPI continues to draw investments by CDMOs
Highly potent active pharmaceutical ingredient (HPAPI) is a compound that elicits a biological response at a much smaller dose. HPAPI includes anti-cancer therapies, including antibody-drug conjugates. Given the expertise required, HPAPI continues to be an active area of investment by CDMOs.
In July, WuXi STA, a subsidiary of WuXi AppTec, opened an HPAPI plant at its site in Changzhou, Jiangsu, China. The new facility is expected to help meet the growing demand for high-potency API process R&D and manufacturing services. The company has also announced a 10-year, US$ 1.4 billion investment plan to expand the company’s research, development and large-scale drug substance and drug product manufacturing capacity and capabilities in Singapore.
WuXi Biologics, which spun out of WuXi AppTec in 2015, reported RMB 10,290.1 million (US$ 1.6 billion) revenue in 2021, signifying an impressive growth of 83.3 percent year-on-year. It is now the second largest player in the global biologics outsourcing market.
Similarly, MilliporeSigma, the life-science business of Merck KGaA, has opened a new US$ 65-million, 70,000-square-feet HPAPI manufacturing facility in Verona, Wisconsin. The new facility has doubled the company’s HPAPI manufacturing capacity.
View CDMO Activity Tracker of Q2, 2022 (Free Excel Available)
Fujifilm to invest US$ 1.6 billion; Astorg to buy CordenPharma
During the last quarter, the CDMO space saw several M&A deals, investments and collaborations. Fujifilm Corporation announced the biggest investment. The company said it will invest US$ 1.6 billion to enhance and expand the cell culture manufacturing services of Fujifilm Diosynth Biotechnologies, a subsidiary of Fujifilm Corporation. This investment will enhance Fujifilm Diosynth Biotechnologies’ sites in Hillerød, Denmark, and Texas in the US.
In May, Astorg to acquire CordenPharma – a CDMO with differentiated capabilities in active pharmaceutical ingredients (APIs), excipients and drug products – from ICIG (International Chemical Investors Group). The company has experienced strong organic growth owing to its position in fast-growing drug modalities, including mRNA vaccines, peptides and high-potency compounds for oncology therapeutics.
In June, CordenPharma also increased its investment by over €10 million (US$ 12.17 million) in new lipid nanoparticle (LNP) formulation, development and production areas. This expansion will help its customers progress from pre-clinical and clinical development of xRNA-based therapeutics (mRNA, siRNA, saRNA, microRNA, etc.), while also speeding up the delivery of customer innovative drug products into clinical stages and beyond.
Similarly, in April, Recipharm added pressurized metered dose inhalers (pMDI) product development capabilities to accommodate the transition to new propellants, which have 90-99.9 percent lower global warming potential (GWP). The expansion of pMDI product development services complements Recipharm’s existing capability.
And in July, Transpire Bio entered into an agreement with Recipharm to support the development of Transpire’s inhaled respiratory disease drug candidates – TRB-1 and TRB-2 – for the treatment of asthma and chronic obstructive pulmonary disease (COPD).
Bachem has entered into a collaboration with Lilly to develop and manufacture APIs based on oligonucleotides, a rising new class of complex molecules. Under the terms of the agreement, Bachem will provide the appropriate engineering infrastructure and expertise to implement Lilly’s novel oligonucleotide manufacturing technology.
In other deals, Curia (a CDMO) and Replicate Bioscience entered into a partnership in June to work on the self-replicating RNA (srRNA) platform. And in May, Bora Pharmaceuticals acquired Eden Biologics’ CDMO assets in Taiwan for up to US$ 100 million.
View CDMO Activity Tracker of Q2, 2022 (Free Excel Available)
Sanofi spins off EUROAPI; Samsung Biologics to build second campus in South Korea
In early 2021, Sanofi had decided to spin off its European drug ingredients business and christened it EUROAPI. In May, Sanofi spun off EUROAPI on the Paris stock exchange. EUROAPI, a CDMO of small-molecule APIs, is now a standalone publicly traded company. It is into lipid nanoparticles which are the key delivery enabler technologies for mRNA vaccines.
EUROAPI combines Sanofi’s API commercial and development activities from six of its European production sites located in Brindisi (Italy), Frankfurt (Germany), Haverhill (UK), St. Aubin les Elbeuf (France), Vertolaye (France) and Újpest (Hungary). Sanofi expects the company to bring in €1 billion (US$ 1.05 billion) in sales this year.
Samsung Biologics has completed the purchase of Biogen’s stake in Samsung Bioepis for US$ 2.3 billion. Samsung Biologics, which is the CDMO arm of Samsung, has purchased 3.8 million square feet in the Incheon Free Economic Zone for US$ 324 million to build its second campus. The land is 30 percent larger than the company’s current campus and is adjacent to its current 60-acre campus in Songdo, South Korea.
View CDMO Activity Tracker of Q2, 2022 (Free Excel Available)
Our view
Since the start of the pandemic, the pipeline of CDMOs has expanded considerably, and their revenues have grown at impressive rates. Interestingly, there is considerable scope for growth as drug companies continue to rely on CDMOs for research, development, market authorization and manufacturing.
In the future, technological advancements and the need for differentiation will create more opportunities. For now, the CDMO market seems on track to achieve a compounded annual growth of 7.29 percent per annum, reaching a size of US$ 289.64 billion by 2027.
(This article has been updated to accurately reflect the information on Servier.)
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Image Credit : CDMO Activity Tracker by PharmaCompass license under CC BY 2.0
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