The Drug Discovery Outsourcing Market is estimated to be valued at US$ 3,825.2 Mn in 2023 and is expected to exhibit a CAGR of 6.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Drug discovery outsourcing refers to the process of transferring portions of drug discovery and development processes to contract research organizations and contract manufacturing organizations by pharmaceutical and biotechnology companies. Outsourcing drug discovery helps companies to reduce costs and access advanced technologies and expertise that are otherwise unavailable or difficult to develop internally. Various drug discovery outsourcing services include target validation, hit identification, lead identification and optimization, and preclinical development.
Market Dynamics:
Growing Research and Development Expenditure in Pharmaceutical Industry: Rising focus on developing novel therapies for treating complex diseases such as cancer has increased research and development expenditure of pharmaceutical and biotech companies substantially. However, maintaining in-house discovery capabilities and facilities for newly identified drug targets requires large capital investments. This has encouraged companies to outsource certain non-core discovery activities to contract research organizations to reduce costs and access external expertise.
Increasing Adoption of Cloud Computing and Artificial Intelligence: Integration of artificial intelligence and cloud computing into drug discovery is improving efficiency and yield of the process. Outsourcing partners are well-equipped with these advanced digital technologies to analyze large datasets, identify new targets, and design novel molecules. This is driving increased outsourcing of early stage discovery activities to digital-first contract service providers.
Segment Analysis
The Global Drug Discovery Outsourcing Market Size is dominated by the small molecule segment which accounts for over 60% share. The small molecule drug discovery approach continues to dominate due to advantages such as low cost of production, ease of manufacturing and scale-up, and high stability during storage and transportation. However, the biologics segment is emerging as an important segment due to growing focus on precision medicines for various chronic diseases such as cancer.
PEST Analysis
Political: The governments across major countries are supporting drug discovery activities through favorable regulations and funding for R&D. However, geopolitical risks can potentially impact outsourcing activities.
Economic: The drug discovery outsourcing market is growing at a steady pace driven by cost containment pressures on pharmaceutical companies to reduce drug development costs and fast-track drug approval process.
Social: There is increasing prevalence of chronic and lifestyle diseases worldwide driving demand for innovative drug treatments. Moreover, growing emphasis on precision medicine is opening new avenues for drug developers.
Technological: Advancements in AI/ML, high throughput screening, and biomarker identification are accelerating the drug discovery process and enabling sampling of larger chemical spaces to identify novel drug targets.
Key Takeaways
The global drug discovery outsourcing market is expected to witness high growth, exhibiting CAGR of 6.4% over the forecast period of 2023 to 2030, due to increasing R&D expenditure on pharmaceuticals and fast-tracking of drug development projects. The market size for drug discovery outsourcing stood at US$ 3,825.2 Mn in 2023.
Regional analysis: North America dominated the global market in 2023 attributed to presence of majority of pharmaceutical companies in the US andCanada. However, Asia Pacific is expected to witness fastest growth led by China and India with thriving contract research and manufacturing industry along with expanding pharmaceutical industry.
Key players operating in the drug discovery outsourcing market are Curia, Genscript, Evotec, Eurofins Scientific, Laboratory Corporation of America Holdings, among others. These players are focusing on expanding service offerings, capabilities through strategic collaborations which is helping accelerate early phase drug development for clients.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
