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June 2017

Welcome to the June 2017 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 June issue!

The PharmSource Team


Big Pharma Capex Continues to Grow, but Rate Slows

by Saul Richmond, Director of Market Intelligence

Spending by global bio/pharmaceutical companies on new plant and equipment grew by an average of 2.7% in 2016, compared to sales growth of 4.4%. This is the first year in recent times that revenue growth has outpaced capex growth. Moreover, the increase in capital expenditure represented a significant decline from the average figure of 6% per year from 2010-2015.

Total spending for the 17 largest companies rose to $19.3 billion. Eight companies increased expenditure, while nine reduced… read on

Can CMOs Take Over Pharma Manufacturing?

by Jim Miller, President

A growing number of observers, including the Wall Street analysts that follow the publicly-traded CROs and CMOs, have made statements recently suggesting that the CMO industry is following the trajectory that the CRO industry took in the past decade.

In particular, they are suggesting that CMOs will eventually fulfill a large percentage of global bio/pharma companies’ manufacturing requirements through strategic manufacturing relationships the way that large CROs established strategic relationships with large bio/pharma companies to run their clinical research operations. The corollary of that position is that a small number of large CMOs will come to dominate the industry thanks to their scale, scope of capabilities, and ability to… read on

Venture Capital Funding Confirms Transition to Large Molecule Assets

by Saul Richmond, Director of Market Intelligence

As the major source of funding for early stage companies, the Venture Capital (VC) sector can be viewed as a window into tomorrow’s therapies. Although absolute VC spend on Research and Development (R&D) is dwarfed by that of the Global Pharmaceutical sector, the overall importance of early stage funding is critical for a number of reasons:

a. Research and Development outlays constitute a significant proportion of overall VC funding (likely around 70%);

b. The early stage sector outsources most of its… read on

M&A in the CMC Services Industry: Implications and Outlook

PharmSource’s recently released trend report, M&A in the CMC Services Industry: Implications and Outlook, analyzes how M&A in the bio/pharma contract services industry is likely to play out over the next two years. Key questions it addresses include:

1. Which capabilities are likely to be most in demand by acquirers?

2. Which companies are likely to be the most active acquirers?

3. What developments would most likely slow M&A activity?


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