CDMO Companies – Pharmaceutical Manufacturing Powerhouses

First off – what’s a CDMO? CDMO stands for Contract Development and Manufacturing Organization, an integral component of the biopharmaceutical industry. Since the dawn of time, drug companies not only did the business parts of drug production, discovery, and marketing, but also the industrial aspects – development and manufacturing.

However, around the 2007-2008 financial crisis, biopharmaceutical companies began to outsource the industrial responsibilities – the development and manufacturing – to other companies yielding what we now know as CDMO’s.

Though not necessarily as glamorous, CDMO’s do a lot of the “heavy lifting” in drug production and are therefore just as important, if not more so these days, to the process as their biopharmaceutical company counterparts.

While these counterparts hold the actual intellectual property rights to developed and manufactured drugs, CDMO’s are also lucratively compensated for their contributions.

Furthermore, they deserve just as much of the current recognition for the fight against COVID-19 as these biopharmaceutical companies, as while they are not involved in the coming up of these medications, they are definitely involved with the making of them.

Below are some of the CDMO’s that have made news headlines, both related and unrelated to coronavirus, around the time the COVID-19 pandemic first started in Wuhan, China in 2019:

1) Samsung Biologics

o Headquarters location: Incheon, South Korea

o  Market capitalization: 38.04 trillion KRW ($30.96 billion)

o  Recent News: Samsung has recent partnerships with PharmAbcine and Immunomedics, amongst many other biopharmaceutical companies. One collaboration that has made major news headlines is with Vir Biotechnology in a $362 million deal to manufacture prospective monoclonal antibody treatments against coronavirus. This partnership is destined to make great contributions to the COVID-19 effort amongst other Vir-related collaborations with WuXi Biologics and GlaxoSmithKline.

2) Cambrex

o   Headquarters location: East Rutherford, New Jersey, USA

o   Market capitalization: $2.4 billion

o   Recent News: Cambrex focuses on partnerships related to small molecule therapeutics, making several acquisitions in recent times to advance its production capabilities. However, they were in-turn recently acquired by private equity fund Permira Funds in a $2.4 billion deal resulting in the company going from public back to being a private company. Earlier last year, Cambrex was also involved in a smaller $24 million construction project of the highly potent API (HPAPI) manufacturing facility at its site in Charles City, Iowa.

3) Thermo Fischer Scientific

o   Headquarters location: Waltham, Massachusetts, USA

o   Market capitalization: $132.93 billion

o   Recent News: Thermo Fisher provides a wide array of scientific products and services, but performs its CDMO services largely through its 2017 $7.2 billion acquisition of Patheon. News outlets report that this company continues to push forward with its CDMO capabilities through its recent $1.7 billion acquisition of Brammer Bio. Thermo Fisher further acquired a drug manufacturing facility in Ireland from GlaxoSmithKline for approximately $100.6 million in 2019.

4) Catalent

o   Headquarters location: Somerset, New Jersey, USA

o   Market capitalization: $11.15 billion

o   Recent news: Catalent has formed major recent partnerships with Novavax and Bridge Therapeutics, and also acquired Paragon Bioservices for $1.2 billion in 2019. Also that year, they purchased Bristol-Myers Squibb’s product manufacturing and packaging facility in Anagni, Italy. Of particular recent note, however, is its April-2020 partnership to manufacture Johnson and Johnson’s lead COVID-19 candidate.

5) Fujifilm

o   Headquarters location: Tokyo, Japan

o   Market capitalization: $24.45 billion 

o   Recent news: Fujifilm started out in photography products and services, but has now expanded to the CDMO industry through its 2011 acquisition of Diosynth. The resulting company, Fujifilm Diosynth Biotechnologies, continued to make several acquisitions to expand capabilities including a 2019 $890 million acquisition of Biogen’s large manufacturing site in Hillerød, Denmark. Earlier in 2019 was a big time for the company, as they invested $90 million to expand already existing production capabilities at their North Carolina site, expanded their UK facilities to include a BioCampus for $16.4 million, and made an initial $10 million investment in an end-to-end non-GMP biopharmaceuticals manufacturing facility at their Billingham, UK site.

6) Recipharm

o   Headquarters location: Stockholm, Sweden

o   Market capitalization: $605.33 million

o   Recent News: Some of Recipharm’s recent partnerships are with Aptahem and Laccure, amongst a plethora of other biopharmaceutical companies being that they are one of the biggest players in the market. Of note, however, is their recent November 2019 acquisition of Consort Medical (the parent company of Aesica and Bespak, two additionally individually separate CDMO’s) for $652 million to strengthen their core capabilities in providing API’s (Active Pharmaceutical Ingredients) and drug products.

7) WuXi Biologics

o   Headquarters location: Wuxi, China

o   Market capitalization: $19.94 billion

o   Recent News: Amongst WuXi’s many recent partnerships as a large CDMO are those with Almirall and Amicus. However, the most relevant one at this time is its collaboration with Vir Biotechnology to manufacture Vir’s potential monoclonal antibody coronavirus treatment. Others involved include Vir’s programs include Samsung Biologics and GlaxoSmithKline. WuXi was particularly active in 2019, with key projects including a significant expansion of drug production capacity in Ireland, Singapore, and the United States. Furthermore, Wuxi and Shanghai Hile Bio-Pharmaceutical entered into a momentous agreement with an undisclosed global vaccine producer for a 20-year manufacturing contract that is estimated to be more than $3 billion.

Though a relatively nascent industry when compared to biopharmaceutical companies, CDMO’s are becoming a mainstay in the same world, carving out their slice of a lucrative pie as well. Many CDMO’s are consolidating with each other at the behest of their private equity owners, creating behemoths of their own that we will probably see to rival their biopharmaceutical company counterparts in both size and influence. A quick Google search shows that the biopharmaceuticals market has approximately 7.14% CAGR for 2020-2025.

A similar Google search reveals that the global CDMO market was previously valued at $150.66 billion in 2019 and, with a somewhat higher estimated CAGR of approximately 8%, is expected to grow to $246.24 billion by 2025. Though definitely not conclusive evidence, this is the insight that CDMO’s may become even more prominent in the drug production game in the coming future.

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