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July 2016

Welcome to the July 2016 issue of CMC Market Outlook

This monthly e-newsletter provides valuable insights for both buyers and sellers of CMC drug development services. Our coverage will help you identify and understand market trends that will inform your strategic business perspective.

Enjoy the July issue!

The PharmSource Team


Global Bio/pharma Continues to Spend on PP&E

Global bio/pharma companies continued to invest heavily in new capital assets in 2015. Capital expenditure (capex) by the largest US and European bio/pharma companies experienced robust growth in 2015.

Analysis of 21 of the top 25 bio/pharma companies (by revenue) revealed that total spend on property, plant and equipment grew by 12.1% to $21.7 billion in 2015, up from $19.3billion in 2014. The growth in capital spending was nearly twice the 6.4% rate at which capex grew from 2010-2014. Fifteen companies increased spending in 2015, while six reduced expenditure.

Roche accounted for more than 40% of the overall spending increase; capex for the pharmaceutical arm of the Swiss-based company increased by more than 60% in local currency terms to CHF 2.7 billion in 2015. To put that into context, Roche’s R&D spending was… read on

Potential Consequences of the CDMO Acquisition Binge

by Jim Miller, President

Merger and acquisition (M&A) activity remains robust across all industries, including contract pharmaceutical services, as low interest rates and slow organic growth create both the opportunity and the rationale for doing deals.

Recent events suggest that the world may have reached the boundaries of what is doable, however, as some large deals, such as the proposed combination of Pfizer and Allergan in pharma and Halliburton and Baker-Hughes in petroleum, have fallen apart over issues of tax policy, antitrust, and global commodity prices. Volatility in the world’s stock markets is also making it more difficult to do deals where payment is to be made in shares rather than cash.

Deals in the contract manufacturing organization (CMO) world aren’t likely to be affected by… read on

Territory Watch: Look Beyond the Usual to Capture New Business

by Katie Ludwick, Marketing Manager

The majority of bio/pharma funding events in the U.S. during 2014 and 2015 occurred outside the high-profile hubs of the San Francisco Bay Area and Boston. However, CROs and CDMOs looking to capture new business will find substantial opportunities in geographically concentrated areas far beyond those more prominent regions.

Business opportunities based on new bio/pharma company financings in geographically compact areas outside the most high-profile venues are truly significant. CROs and CDMOs can strategically focus sales resources in… download now

How big is the market for…?

This is a handy guide to frequently requested data about the bio/pharma contract services industry.

The market for R&D drug development spend:

Market Size Source
2015: $75.4 billion INC Research
Presentation at William Blair 36th Annual Growth Stock Conference
June 2016

Read more about the size of the contract services market for various segments.

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