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January 2017

Welcome to the January 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 January issue!

The PharmSource Team

 

The Tide Stays High

by Jim Miller, President

A year ago, the outlook for contract services was a little uncertain. Equity markets’ appetite for public offerings from emerging bio/pharmaceutical companies had significantly diminished: valuations of emerging bio/pharma companies, as measured by the NASDAQ Biotechnology Index (NBI), had declined by 15% from their highs in mid-2015, and by mid-February, they were off another 28%.

Because contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs) get so much of their business from externally-financed companies, the negative energy surrounding emerging bio/pharma did… read on
 

Catalent to Acquire Accucaps

Catalent has agreed to acquire softgel manufacturer Accucaps Industries Ltd. Financial details of the transaction were not disclosed, but analysts that follow Catalent put the price at $75 million, representing a multiple of 10x EBITDA. The deal is subject to Canadian regulatory approval.

Accucaps is owned by Canadian generic pharmaceutical company Apotex, a detail not mentioned in Catalent’s announcement. The company has two facilities, in Windsor and Strathroy, Ontario, and claims to have… read on
 

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 total global bio/pharmaceutical R&D spending:

Market Size Source
2016: $127 billion
2020: $148 billion
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Presentation at JP Morgan Conference
January 2017

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

How much longer is the boom in the CDMO and CRO business likely to continue?

PharmSource’s just-released trend report, Follow the Money: The Outlook for Outsourced Spending on Early Development Services, examines the link between external funding sources and early drug development, and addresses the following:

1. How close is the link between early development activity and the external funding environment?

2. What happens to R&D spending when an emerging bio/pharma company gets financing? What happens to other spending categories?

3. What is the cost of getting a candidate into Phase 1 and Phase 2?


 

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