After experiencing a series of ups and downs in recent years, the biopharma contracting business is gearing up for a rebound in 2025. That's according to new research from CPHI Milan ahead of the group's manufacturing conference next month.
As it stands, 49% of the CDMO industry is “highly positive” on contract services growth in the next 18 months, CPHI said in a release, citing new research pooling insights from 280 pharma companies.
The optimistic mood comes despite an uneven recovery in the biopharma industry after the pandemic. While funding has flowed to later-stage projects, early-stage assets continue to face a funding deficit, Gil Roth, president of the Pharma & Biopharma Outsourcing Association said in a statement.
“This means that the lifeblood of CDMOs—projects moving through the development pipeline and smaller customers sticking with key service providers—remains hobbled,” Roth said.
After a major boom during the COVID-19 pandemic, many CDMOs have failed to recapture the immense growth they saw at the beginning of the decade. Still, contracting work continues to be a lucrative field, with analytics firm Evaluate predicting last year that the CDMO market is poised to outpace overall pharma growth through 2028.
Beyond the 49% of CPHI’s respondents who voiced optimism for CDMO growth in 2025, 44% adopted a "neutral" stance. Just 7% of the companies polled were negative, CPHI said in its release.
One major point of focus among contractors in 2024 revolves around the shortage of third-party capacity for the “glut” of GLP-1 medicines hitting the market and filling out biopharma company pipelines, CPHI added.
Separately, a “majority” of the industry polled by CPHI was unsupportive of the BIOSECURE Act—a piece of legislation unveiled in January that seeks to cut off cooperation with certain Chinese service providers.
Among the companies CPHI questioned, just 19% took the view that China-based CDMOs are “a threat and should be removed from Western supply chains.” Meanwhile, 38% of respondents argued that BIOSECURE is a “politically motivated issue that sets a concerning precedent for the industry,” according to CPHI’s release.
The final 43% of the industry polled took a more balanced view, acknowledging the targeted service providers' "tremendous contribution to the industry” as well as the need to diversify supply partners.
The nuanced take on BIOSECURE follows a survey from L.E.K. consulting this past summer suggesting U.S.-based life sciences companies’ confidence in working with Chinese firms had dropped sharply. Companies outside the U.S. were less concerned, showing a milder decrease in their confidence levels.
The BIOSECURE Act passed a vote in the U.S. House of Representatives earlier this month. While the bill has enjoyed wide bipartisan support throughout its run in 2024, nearly all lawmakers who voted against BIOSECURE in the House were Democrats. It's uncertain what fate the bill will face in the Senate.