Biologics outsourcing refers to outsourcing the manufacturing of biologic drugs such as vaccines, blood components, recombinant therapeutic proteins, monoclonal antibodies, and stem cells to contract development and manufacturing organizations. Biologics require complex development processes as compared to traditional drugs. Outsourcing biologics manufacturing helps pharmaceutical companies to reduce facility setup and operational costs, focus on core drug development activities, and ensure timely delivery.
The global biologics outsourcing market is estimated to be valued at US$ 22.66 Bn in 2024 and is expected to exhibit a CAGR of 8.1% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Developing biologics in-house requires high capital investments and operating costs. Moreover, it is a complex and time-consuming process. Contracting the manufacturing to CDMOs allows drug makers to avoid facility setup and operational costs. This helps them focus on R&D activities to develop new biologic drugs in a timely and cost-effective manner. The outsourcing model improves the speed of drug development while reducing costs significantly. It also ensures consistent supply of biologics. With stringent regulations and increasing R&D investments of biologics, outsourcing is expected to emerge as a cost-effective strategy for drug makers, thereby driving demand in the market.
Porter’s Analysis
Threat of new entrants: Low barriers to entry as large capital requirements are needed for R&D and manufacturing facilities. Stringent regulations by regulatory bodies also discourage new entrants.
Bargaining power of buyers: Large pharmaceutical companies have significant bargaining power as biologics developers are dependent on them. Buyers can negotiate on price and demand additional services.
Bargaining power of suppliers: Suppliers of raw materials, manufacturing equipment, and contract research organizations have some bargaining power due to specialized knowledge and services required.
Threat of new substitutes: Threat is low as biologics have certain advantages over small molecules in terms of specificity and efficacy in the treatment of complex diseases.
Competitive rivalry: Intense competition exists among existing players to gain market share. Companies compete based on portfolio, service capabilities, quality, and pricing.
SWOT Analysis
Strengths: Growing biopharma R&D outsourcing; cost reductions for innovators; core competency of CROs in accelerated development.
Weaknesses: High attrition rates in clinical development; uncertainty over long term product success; dependence on few large pharmaceutical companies.
Opportunities: Emergence of niche service providers; shift to specialized biotherapeutics; rising drug development in Asia Pacific.
Threats: Pricing pressures; regulatory risks; increasing requirements for specialized infrastructure and expertise.
Key Takeaways
The Global Biologics Outsourcing Market Size is expected to witness high growth during the forecast period of 2024 to 2031.The market size for 2024 is estimated to be US$ 22.66 Bn with a projected CAGR of 8.1% between 2024 and 2031.
Regional analysis indicates that North America dominates currently due to presence of majority of global biopharmaceutical players and high R&D expenditure in the region. Asia Pacific is expected to grow at the fastest pace due to increasing biosimilars development and low-cost operations in countries like China and India.
Key players operating in the Biologics Outsourcing Market include Quorum Technologies Inc., Pix4D SA, Photometrix Ltd., Koninklijke Philips NV, Agisoft LLC, PhotoModeler Technologies, Intel Corporation, Faro Technologies Inc., Autodesk Inc., General Electric Company, and Vi3Dim Technologies. The companies compete based on service portfolios, technological capabilities, quality, and pricing. Strategic collaborations with drug developers and acquisitions have been key strategies adopted by these players to expand service offerings and geographical footprints.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it