How innovation and strategy at CPHI Frankfurt are shaping investment trends

This interview with consultants, CCD Partners, explores the evolving investment landscape in the pharmaceutical industry, highlighting challenges for smaller firms, the growing focus on sustainability and biologics, and the increasing role of AI and reshoring trends. 

How has the investment landscape in the pharmaceutical industry evolved over the past year for small to medium-sized companies? And how does this compare to larger businesses?

It’s been a tougher year for smaller firms, with investors becoming more selective and focusing their capital on larger and more established opportunities. In a relatively crowded market, in the lower-mid market it’s all about standing out. The good news is that private equity and trade buyers continue to see value in niche players where innovation and uniqueness are front-and-centre.

Are you observing a shift in investor focus towards more sustainable and long-term solutions including green chemicals and biosimilars?

Absolutely. Green chemistry has moved from being a nice-to-have to a real investment theme, especially as consumer and regulatory pressures align. We’re also seeing strong momentum in biosimilars as more biologics come off patent.

How has the movement towards biologics, as opposed to traditional small molecules, influenced investment strategies in the pharmaceutical industry in recent years?

The shift toward biologics has definitely changed investor priorities. Biologics, cell therapies, and gene therapies now attract more funding because they’re high growth and high impact. For smaller companies, having a biologics angle often makes them more attractive to investors. This is heightened as there aren’t as many strong small-molecule focused bolt-on investments on the market at the moment, partly due to the fact they’ve been subject to consolidation over the past decade. 

How are investors viewing the scalability and long-term potential of AI-driven infrastructure in smaller pharmaceutical firms?

There’s a lot of interest, especially as AI can enable smaller firms to punch above their weight in R&D or manufacturing – and therefore achieve stronger growth curves. But the investors are becoming increasingly cautious, especially as the (potential!) AI bubble starts to deflate. If a company can show how AI genuinely improves efficiency or speeds up development, then it becomes a very compelling investment.

Are you seeing an increase in local investment due to reshoring trends and geopolitical shifts? How is this impacting pharmaceutical companies?

Yes – reshoring and supply chain resilience are front of mind of many businesses and investors. We’re seeing more capital flow into local manufacturing and service providers, particularly in North America (where this has naturally been accentuated by the tariffs). For smaller firms with a strong local footprint, this has opened new opportunities, as investors see them as critical to building more stable supply chains.

How important are strategic partnerships and collaborations for smaller pharmaceutical companies and start-ups in attracting investment?

Partnerships are very useful – getting brand recognition alongside a larger player gives smaller companies instant credibility and de-risks the narrative for potential investors. Beyond capital, partnerships bring expertise and market access – and therefore the smaller businesses can grow faster with these unique market insights. 

What emerging trends or technologies do you anticipate will shape the investment landscape in the next few years?

I’d highlight three: continued growth in advanced therapies like cell and gene treatments, wider adoption of AI across the value chain, and a sharper focus on sustainability and local supply. A horizontal theme cutting across all of these is private equity remaining active in consolidating niche players in the lower-mid market. 

What are you most looking forward to seeing at CPHI Frankfurt this October?

It’s about meeting the “disruptors” – i.e. the lower-mid market companies doing something genuinely different. I’m particularly keen to see new developments in green chemistry, biologics, and AI-driven tools. And of course, CPHI is a great chance to connect with both friends and colleagues – everybody in the industry will be there! 

To see the watchlist that CCD Partners has created in partnership with CPHI Frankurt highlighting the lower mid-sized and independent companies exhibiting at the show, click here.