CDMOs benefit from COVID-19 impact, says CPHI Annual Report

CMO growth, however, hampered by innovator approvals from mega-cap pharma.

Adam Bradbury, Analyst at PharmSource GlobalData, highlighted that mega-cap companies accounted for a particularly high percentage of new drug approvals in 2019, a trend that is potentially detrimental to contract manufacturing organizations' (CMOs) prospects in 2020 and beyond, as such companies with their own internal manufacturing capabilities have less need to outsource manufacturing work.

There remain, however, good opportunities for contract and development manufacturing organizations (CDMOs) in clinical trial manufacturing with a large pipeline of drugs and both mega- and small cap-companies using partners to advance pipelines.

Bradbury also points to increased opportunities for outsourcing of niche technologies – particularly solubility enhancement – as well as a surge in demand for CMOs with viral vector manufacturing capabilities should a number of cell and gene therapies gain regulatory approval over the coming years.

Bradbury commented: “There are a large number of cell and gene therapies in development that will form a future wave of marketed therapies requiring larger scale manufacturing. We may, therefore, see manufacturing bottlenecks in the future, especially in viral vector manufacturing and slow processing, and as such there will be a significant demand for related services.”

COVID-19 is also having a transformative effect on pharma, and Fiona Barry, Associate Editor at PharmSource GlobalData explored the direct and indirect benefits to the CDMO sector.

She highlighted that COVID-19 vaccine developers are signing ‘outsourcing agreements with CMOs at an unprecedented rate’ in response to the global demand for billions of vaccine doses. Consequently, infectious disease has displaced oncology as the leading therapeutic area for contract manufacturing service agreements.

According to the GlobalData Pharma Intelligence Center, pharma companies have publicly disclosed 42 contract manufacturing service agreements for 26 unique pipeline COVID-19 vaccines.

Vaccine developers are choosing to partner with CMOs close to their domestic nations, with the US, UK and Germany proving the most popular supplier locations.

According to Barry, most contract manufacturing service agreements are for recombinant vector vaccines, followed by subunit vaccines. This is despite the fact that mRNA vaccines are the most prevalent among the top COVID-19 vaccines.

“There are extremely few mRNA outsourcing agreements relative to the number of mRNA candidates because of the novelty of this unproven technology. Few CMOs have the capability to produce APIs for mRNA vaccines, and many COVID-19 mRNA dose manufacturing sponsors are opting to partner with Big Pharma rather than outsource this work to CMOs,” commented Barry.

Operation Warp Speed, the $10-billion initiative funded by the US federal government scheme, and the European Commission’s Emergency Support Instrument are two chief drivers of advanced vaccine manufacturing. Both initiatives have selected a number of promising vaccine candidates to manufacture in the hundreds of millions of doses scale.

Finally, an indirect effect of the pandemic is the drive to free up internal capacity at Big Pharma, with outsourcing of some existing products; for example, Pfizer is outsourcing many internally manufactured drugs to CMOs.