The contract manufacturing market should grow to about $18.5 billion over the next several years, driven in part by a demand for injectable drugs in general and specialized cancer drugs in particular. That, at least, is the view of consultants Frost & Sullivan.
A new analysis says last year the CMO market had $13.4 billion in revenues, ContractPharma reports. So if it hits the forecasted $18.5 billion by 2017, the market will be seeing a compound annual growth rate of 5.5%.
"Investments and capacity expansions in the injectable dose formulation segment are in the near future, as it is likely the most significant source of income for the global pharmaceutical contract manufacturing industry," said Frost & Sullivan analyst Aiswariya Chidambaram. "Cytotoxics manufacturing, in particular, offers immense growth potential, given the demand from the cancer research and therapy segments."
A number of companies have already decided that is a growth market they intend to tap. Swiss contract manufacturer Lonza and French CMO Novacep are both adding to their antibody drug conjugates capacity. Baxter International ($BAX) earlier this year said it would expand cytotoxic manufacturing at its plant in Halle, Germany, with a 1,750-square-meter addition. It is the third time in half a dozen years the plant has been expanded.
"Cancer incidence is on the rise and cytotoxic therapies continue to be at the center of oncology treatment programs," Dr. Burkhard Wichert, vice president of manufacturing for Baxter's BioPharma Solutions business, said at the time.
According to F&S, the growth in the market comes with pitfalls. There will be pricing pressures, with some companies being particularly vulnerable. According to the report, a significant number of contract manufacturers derive more than half their revenues from a single client. "Consolidation in the form of acquisitions and strategic alliances to gain access to new, emerging markets and niche segments will be crucial for both small and large CMOs," Chidambaram said.
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