CMOs should prepare for small molecule, solid dose demand

26 April 2019 (Last Updated April 26th, 2019 16:12)

The greatest demand by pharma companies for CMO services in the near future will be in small molecule manufacturing, packaging and finished dose, especially solid dose manufacturing and formulation.

CMOs should prepare for small molecule, solid dose demand

“Despite everything you read, small molecule and solid dose are not dead,” according to PharmSource founder and former president Jim Miller at DCAT Week in New York, US.

Miller was giving a talk for the Drug, Chemical & Associated Technologies Association (DCAT) 2018 Benchmarking Report on 18 March.

Small molecule manufacturing

Small molecule and solid dose manufacturing will be some of the most highly sought after contract manufacturing organisation (CMO) services in the immediate to mid-future, according to pharma executives surveyed for the DCAT report.

These predictions are supported by the findings of the forthcoming GlobalData Trend Report, CMO Scorecard: Outsourcing of NDA Approvals and CMO Performance – 2019 Edition, which reveals that the outsourcing of small molecule and solid dose NDA manufacturing has remained steady over the past 5–10 years.

The DCAT report, entitled ‘Examining the Current and Future Alignment of the Pharma Customer-Supplier Relationship’, is based on a survey of executives at pharmaceutical companies, CMOs and other suppliers who were asked about their strategic supply relationships.

The greatest demand by pharma companies for CMO services in the near future will be in small molecule manufacturing, packaging and finished dose, especially solid dose manufacturing and formulation, according to the report.

Contract capabilities being sought by pharma companies


Source: GlobalData, adapted from DCAT 2018 Benchmarking Report: Examining the Current and Future Alignment of the Pharma Customer-Supplier Relationship

These predictions for healthy small molecule manufacturing demand over the next year are backed up by the GlobalData Pharma Intelligence Center Drugs Database, which showed that 131 small molecule innovator drugs were approved by the FDA and/or European Medicines Agency (EMA) in 2018 as of 4 April.

According to the forthcoming GlobalData PharmSource Trend Report, CMO Scorecard: Outsourcing of NDA Approvals and CMO Performance – 2019 Edition, API chemical (small molecule, polymer, and oligonucleotide) outsourcing levels have remained relatively static, with 59% of New Molecular Entities (NMEs) being externally manufactured in 2018 compared to 56% over the 2013–2017 period.

Outsourcing of API chemical NMEs

API chemical = small molecule, polymer and oligonucleotide.
Source: GlobalData Pharmaceutical Intelligence Center Drugs Database (accessed 8 March 2019)

Similarly, data from the forthcoming Scorecard Trend Report show that the share of outsourced solid dose NMEs remains healthy. In 2018, outsourcing stood at 52%, similar to the 2012–2017 average of 50%.

Outsourced solid dose NDA approvals

Source: GlobalData Pharmaceutical Intelligence Center Drugs Database (accessed 8 March 2019); CMO Scorecard: Outsourcing of NDA Approvals and CMO Performance – 2019 Edition

This corroborates the findings of the DCAT report, which reveals pharma companies’ demand for solid dose contract manufacturing is greater than the demand for parenteral drugs, although demand for parenteral manufacturing is increasing.

The DCAT survey, with its emphasis on continued small molecule and solid dose volume demand, also confirms the conclusions of the GlobalData PharmSource Trend Report, M&A in the Contract Manufacturing Industry: Implications and Outlook – 2018 Edition (December 2018) about CMO growth.

The M&A report states that consolidation in the CMO industry is primarily driven by manufacturers expanding the capacity of their existing offerings, despite prevailing industry wisdom that CMOs are largely adding new types of the capability to create full-service offerings.

Between 2015-2017, the majority of API – Small Molecule CMO acquisitions were made by other API – Small Molecule CMOs, and the same is true of commercial dose CMO acquisitions, according to the M&A report.