The manufacturing and regulatory process of biopharmaceuticals is highly complex and costly to implement, which can be challenging for big pharma companies and startups to take on themselves. Outsourcing the task to CDMOs allows these companies to spend less of their own time and resources at the cost of surrendering full control of the process.
A growing number of clinical trials involving advanced therapies is increasing demand for CDMOs, with many technologies gaining traction such as CAR-T cell therapies and gene therapies. As a result, the global CDMO market for advanced therapies was valued at $5.6 billion last year and is projected to soar to $18.8 billion by 2030.
However, there are also challenges with the use of CDMOs. One example is evolving industry regulations that make it vital to stay up to date with the latest requirements. Another is the shifting political landscape, such as the U.S.’s movements toward passing the BIOSECURE act, which is aimed to clamp down on the use of CDMOs based in China.
Here are five of the key CDMOs leading the market, with sprawling facilities around the world and a wide array of services to offer for clients developing advanced therapies.
Catalent (Novo Holdings)
Headquarters: Somerset, New Jersey, US
Founded: 2007
Catalent was set up when Blackstone acquired the pharmaceutical and services assets from Cardinal Health and rebranded them under their current name.
Catalent handles the production and supply of therapeutic products across the range of small molecules and biologics. In terms of advanced therapies, the firm has expertise in the production of induced pluripotent stem cells (iPSCs) and viral vectors for gene therapies.
The company went public in 2014, raising around $822 million in an initial public offering on the New York Stock Exchange. In 2023, Catalent raked in almost $4.3 billion in revenue, of which biologics accounted for $1.9 billion.
Catalent was acquired by the investment company Novo Holdings, the investment arm of the Novo Nordisk Foundation, earlier this year. Novo Holdings forked out $16.5 billion for the CDMO, a 16.5% premium on Catalent’s closing price in February 2024. The move was prompted by a need to boost the production of Wegovy, Novo Nordisk’s lucrative drug for weight loss. Catalent also expanded its clinical supply facility in Germany as part of a $25 million project earlier this year.
Lonza
Headquarters: Basel, Switzerland
Founded: 1897
Nestled in the Swiss Alps, Lonza was set up by a group of Swiss financiers as a company that produced electrochemical products from hydroelectric power on the river Lonza. After World War 1, the firm began to produce more complex chemicals for use in industry and agriculture, and in the 1990s, the company branched into biotechnology with the acquisition of Celltech Biologics.
Lonza helps its clients to take advanced therapies from late phase drug discovery and drug substance to commercial supply and drug product. For example, it offers services based on the microbial production of vaccines and recombinant proteins and the manufacturing of antibody-drug conjugates (ADCs) and different types of antibodies. It also helps users to navigate the complexities of cell and gene therapies including T-cell therapies and iPSCs.
Lonza’s sales hit CHF 6.7 billion ($7.6 billion) last year, of which its biologics division accounted for CHF 3.7 billion ($4.2 billion). In the same year, Lonza showed the drive to reinforce its expertise in the development of ADCs with the acquisition of the Dutch player Synaffix for up to $175 million.
In an expansion effort of its manufacturing capacity, Lonza acquired a large-scale biologics manufacturing facility from Roche for $1.2 billion earlier this year.
Thermo Fisher Scientific
Headquarters: Waltham, Massachusetts, US
Founded: 1956
Thermo Fisher Scientific is a heavyweight supplier of lab equipment such as analytical instruments in addition to consumables. The company launched an initial public offering all the way back in 1967 and listed on the New York Stock Exchange in 1980, with a current market capitalization of $212 billion.
In an effort to push into the CDMO space, Thermo Fisher Scientific acquired Patheon for $7.2 billion in 2017, nabbing the latter’s network of manufacturing facilities, which are largely in the US and Europe. At the time, Patheon had earned a neat $1.9 billion in revenue and was shuffled into the larger firm’s Laboratory Products and Services segment.
Patheon has experience in the development of a wide range of advanced therapies, with services available for the production of viral vectors as well as cell therapies based on T cells, IPSCs, natural killer cells and more. The firm also offers help with the development of therapies based on messenger RNA (mRNA).
Thermo Fisher Scientific’s revenue from 2023 was $42.9 billion, with its Laboratory Products and Services segment accounting for roughly half of the total. Thermo Fisher Scientific also acquired the Swedish proteomics company Olink for $3.1 billion last year to help biopharmaceutical clients to examine diseases at the protein level.
Rentschler Biopharma
Headquarters: Laupheim, Germany
Founded: 1927
Rentschler Biopharma is a family-owned business that has its roots in a pharmacy that was opened in Laupheim in 1872. The company occupies a niche in rare orphan diseases and focuses on offering services for the development and manufacturing of biopharmaceuticals for these conditions. For example, the firm is currently manufacturing eight approved products including bispecific antibodies and recombinant enzymes.
Last year, Rentschler provided support with the manufacturing and regulatory development of four newly approved biopharmaceuticals in the US – roughly a quarter of the 17 biopharmaceuticals approved that year.
Being family owned gives the CDMO strategic flexibility at the same time as a long-term outlook, among other advantages, said the CEO in 2020. The company is also working with the UK organizations the Cell and Gene Therapy Catapult and Refeyn to deploy automated analytical technology and make the manufacturing of viral vectors more efficient than traditional methods.
The CDMO recently completed an expansion of its production site in Milford, Massachusetts, U.S., with a new production line opening operations, representing the biggest investment in the 150-year history of the company.
WuXi Advanced Therapies (WuXi AppTec)
Headquarters: Shanghai, China
Founded: 2000
WuXi Advanced Therapies is a CDMO arm of WuXi AppTec. The larger company originated as the drug development service provider and gradually expanded its offerings over the years, with the acquisition of AppTec Laboratory Services leading to the new name of WuXi Apptec.
WuXi Advanced Therapies, also known as WuXi ATU, focuses on the development of advanced therapies such as cell and gene therapies with clients, with expertise in testing and manufacturing to speed up the path of new medicines to the market.
For example, the team has cell banking tools to ensure that a client’s cells will pass regulatory standards, and analytical experts that deploy molecular biology, microscopy, flow cytometry-based tests and more to speed up the product development process.
In 2021, WuXi AppTec acquired the UK CDMO Oxgene to absorb its gene therapy services into those of WuXi Advanced Therapies. In particular, WuXi was attracted by Oxgene’s viral vector technology which is designed to manufacture cell and gene therapies more simply and cheaply than current methods.
Last year, WuXi AppTec reported an overall revenue of RMB 40.3 billion ($5.5 billion) – a 2.5% increase from 2022. Revenue from its CDMO grew to RMB 1.31 billion ($180 million), though its profit margin declined due to the under-utilization of capacity, according to the company.
