Strengthening Of Mid-Size Biopharmaceutical Companies Indicates Strong Potential For Biopharmaceutical Contract Manufacturing
Contract manufacturing of biopharmaceuticals has moved beyond being a function of "available capacity" and "cost" to a strategic option offering flexibility, quicker time to market, and lower scale-up costs. The market will continue to witness double-digit growth as the current demand is largely driven by first-generation products - rh protein therapeutics and monoclonal antibodies (MAbs) targeted for cancer.
New analysis from Frost & Sullivan, Global Biopharmaceutical Contract Manufacturing Markets, finds that the markets earned revenues of $2.45B in 2007 and estimates this to grow to $6.48B by 2014.
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"A large number of first-generation biopharmaceutical products maturing and major biopharmaceutical companies are likely to move these out to contract manufacturing organizations (CMOs) and focus on next-generation drugs, which could offer higher revenues and margins," notes Frost & Sullivan Industry Analyst Barath Shankar Subramanian. "The strengthening of mid-size biopharmaceutical companies serves as the engine for a rapidly growing biopharmaceutical pipeline and is a strong signal for future potential that exists in outsourcing manufacturing."
The fact that CMOs are better equipped to handle manufacturing and improve process efficiency and productivity in comparison to small and emerging biopharmaceutical companies will ensure the sustainability of the business in the long term. Contract manufacturing of biopharmaceuticals enables smaller and mid-tier companies to retain greater control over their products rather than out-licensing or selling them to bigger biotechnology or pharmaceutical companies.
"Manufacturing of biopharmaceuticals is a capital-intensive, complex, and highly technical process in comparison to manufacturing of small molecules," says Subramanian. "Investment in captive manufacturing capacity for biopharmaceuticals is a tricky decision for most companies as product development timelines are lengthy and often risky with a high risk of failure."
"Risk-sharing" partnerships and "preferred vendor" models are vital to a sustainable CMO business. Formulation development, consulting services, logistics, packaging, and proprietary technology platforms are other services increasingly being offered by CMOs.
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SOURCE: Frost & Sullivan