Interview Synopsis

Small molecule CDMO divestments – impact of growing focus on biologic manufacturing & potential M&A activity

  • Public Equity
  • Healthcare
  • Europe

“CDMO [contract development and management organisation] is a very interesting space to be in, this space continues to be growing”, a former VP at Lonza Group AG told Third Bridge Forum. The specialist went on to discuss more about the competitive positioning within this industry, divestments and M&A, and the future outlook.

Giving an overview of the sector’s scale, the former VP explained that CDMO is directly linked to the global pharmaceutical market – which is growing apace. “In 2019… the global pharma market [was] around USD 1.3tn, [and] it is expected to grow by 2025 to USD 1.6tn.” For CDMO, this translates into an estimated 48% expansion.

The pandemic disrupted the sector in two main ways. “The productivity of the R&D has gone down during the pandemic time, and… clinical trials were delayed.” Consequently, they expect a knock-on effect in 2023-25 with decreased approval rates.

On the topic of divestments, the conversation covered recent industry developments, whether these could be indicative of a broader industry push towards formulation or more upstream development services, and Catalent and Lonza.

The Interview then moved on to global players. One noted was Wuxi Biologics, a “very respectable” company. “Is Wuxi ambitious? Yes. Are they expanding into the US? Yes. Are they definitely very patient? Yes. Are they establishing a good rapport and reputation? Answer is, yes… I see a great future of Wuxi in the next decade, but right now they are still at the ground stage”

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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