The global biosimilar contract manufacturing market crossed USD 2.26 billion in 2021 and is expected to reach USD 5.56 billion by 2027, growing at a CAGR of 16.19% from 2022-2027. More than 2 billion people worldwide cannot afford life-saving medicines, putting their lives at risk. Producing potentially life-saving drugs that are more accessible and affordable can help today's patients live better lives for a prolonged period and minimize health inequality. Biologic drugs are at the forefront of therapeutic developments, but their high cost accounts for a significant portion of public and private drug expenditure. Comparatively, biosimilars are an equivalent effective drug at an affordable price, offering the promise of a more sustainable solution. As a result, the biosimilar market continues to post massive growth across all regions worldwide. Since 2015, the biosimilars market has been growing at a CAGR of more than 50%, and the future looks even better, with several favorable factors supporting its high growth. The increasing acceptance of biosimilars in treating diseases, such as autoimmune diseases, cancer, and blood disorders, coupled with the low cost of biosimilars compared to branded biologics, are some of the major factors driving the market.
With the increasing demand for biosimilars, rise in approved biosimilars, and robust pipeline, the demand for outsourcing biosimilars manufacturing is also equally increasing. As a result, many pharma and biotech companies outsource biosimilar R&D and manufacturing to CMOs & CDMOs, which propel the biosimilar contract manufacturing market growth. Outsourcing biosimilar manufacturing enables pharma/biotech companies to reach the market early, free up their resources and manufacturing facilities, focus more on their core businesses and minimize the costs of their drugs. As a result, the CMOs industry is witnessing remarkable growth during the last decade and is expected to continue an even better growth trajectory in the coming years. The CMOs industry is undergoing a paradigm shift. Off-late CMOs are no longer working as just a one-off manufacturing option but have become an integral part of the supply chain of pharma/biotech companies.
In the beginning, major pharma companies continue to be significant contributors to the growth of the biopharma contract manufacturing market; contributions from biotechnology & life sciences companies also increasing in recent years, especially when the demand for biologics, including biosimilars, is at an all-time high worldwide. With the market entry of many biotech companies, there will be greater demand for contract manufacturing services in biologics, including the biosimilars market. Outsourcing the manufacturing function will enable biotech firms to introduce their products in the market without investing in building or upgrading their manufacturing units. As the costs of biosimilars must be kept significantly low, it makes sense for drug developers to outsource manufacturing activities to keep costs low. As a result, CMOs are witnessing healthy growth in their business from the biosimilar contract manufacturing market.
The demand for contract manufacturing services is gaining momentum owing to the increase in investments by big pharma companies for the R&D of various biologics and biosimilars. Moreover, the significant advantage of the reduction in overall investment for developing and manufacturing drugs with contract manufacturing is expected to increase the adoption of contract manufacturing services by pharma/biotech companies in the coming years. Leading CMOs are expanding their existing manufacturing capacities to maintain their strong position in the biosimilar contract manufacturing market. For instance, in April 2018, Catalent Pharma Solutions completed a USD 5.5 million expansion program at its 200,000+ square foot Philadelphia, Pennsylvania manufacturing site to provide additional clinical packaging and storage capacity.
MARKET TRENDS & OPPORTUNITIES
The Rise in Product Launches & Approvals of Biosimilars
The growing number of recent launches in biosimilars are demonstrating a wide range of uptake depending on the molecule and the geography. North America and Europe have accounted for the highest volume of global biosimilar volume; however, greater volume growth rates are expected in the major Asian markets, Southeast Asia, Latin America, and Australasia, in the next decade.
The first biosimilar approved by the US FDA was Sandoz's Zarxio in 2015. Later in 2020, there was a decrease in the annual number of biosimilars approved in the US. In 2019, FDA approved a record-breaking ten biosimilars. But in 2020, FDA only approved three new biosimilars. Additionally, few biosimilars entered the market in 2020, with five being launched compared to seven in 2019. By 2022, the FDA approved 33 biosimilars, of which 21 are available on the US market. In China, a significant surge in the approvals of biosimilars was witnessed from 2018 to 2021, with 13 new biosimilars being approved. The latest regulation changes and biosimilar pipeline will likely drive the biosimilar industry. The demand for biosimilars will constantly be growing due to the rising number of inflammatory and autoimmune diseases. This has been further favored by the patent expirations of the blockbuster biologic drugs, which are highly expensive compared to the highly cost-effective biosimilars. This will further increase the demand for outsourcing the manufacture of biosimilars and contribute to the biosimilar contract manufacturing market's growth.
Patent Expirations of Blockbuster Branded Biologic Drugs
The first 17 blockbuster drugs with annual peak sales reaching USD 60 billion will likely lose exclusivity between 2020 and 2025, creating a market entry of many novel biosimilars. The uptake of biosimilars is rising in many specialties and across channels where biosimilars have been introduced more recently. Biologics has been a rapidly evolving area within the biotechnology sector. The treatment of cancers, diabetes, and autoimmune diseases account for more than 60% of the biologics market, making it highly expensive and increasing daily. As per the World Health Organization (WHO), such prices limit healthcare systems from providing affordable and population-wide access to such medicines.
One way to combat the limitations for the use of biologicals and the subsequent pressure on healthcare budgets is to introduce biosimilars where the patents and exclusivity periods of the originator biologicals have expired. By 2018, biologicals worth more than USD 68 billion in annual sales lost patent protection. A 20% discount could save USD 14 billion, while a 30% or 40% discount could save USD 20 billion or USD 27 billion, respectively. By 2025 several biologic patents will have expired in many countries, which could translate into an opportunity to develop new biosimilars. Europe can be seen as a key region with more opportunities to be explored in the biosimilar contract manufacturing market.
Robust Pipeline of Biosimilars Boosting Contract Manufacturing
The global biopharmaceutical industry is being expanded by many new products, players, and production facilities thanks to biosimilars. With this, the number of approved and investigational biosimilars is increasing. The competition among biosimilars (including their reference products) will thus rise dramatically in the upcoming years. This includes several developers focusing on biosimilars of many of the same reference products.
Biosimilars have recently been introduced in new therapeutic segments, with reimbursement models continuing to evolve. The biosimilar pipeline is rapidly progressing and growing, with more products and companies getting involved in the manufacturing process. Biosimilars observed sustained growth in 2019, with an average growth of 20% per year. This growth is increasing at an average of 27% per year in the last five and half years.
With several commercially-viable biosimilars lacking product protection and approaching patent expiry, there are currently multiple biosimilars in the pipeline. The number of biosimilars in the pipeline, of which most are still in development, targeting the same popular reference products, has risen in the past 18 months with an average of over 50% yearly. This high growth rate in the pipeline of biosimilars is reflected in the growth of biosimilar numbers targeting other less popular reference product targets. This growth in the number of biosimilars in the development targeting the same reference products will likely continue in the short term in coming years, as more current biosimilar companies are extending their portfolios of products in development and new developers continue to enter the field.
INSIGHTS BY SOURCE
Biosimilars are developed and manufactured using mammalian and non-mammalian cell lines. The mammalian cell lines segment dominated the global biosimilar contract manufacturing market with a share of around 71% and is also the fast-growing segment. The production of biosimilars, generation of manufacturing cell lines, and optimization of manufacturing scale-up require tight control conditions and detailed analytics to ensure the biosimilar composition profile fits within the specifications of originators. For the generation of proteins for discovery research and biotherapeutic application, mammalian cell recombinant expression can help produce proteins that correctly mimic properties in a human patient.
The global non-mammalian biosimilar contract manufacturing market is growing at a CAGR of 15.54%. Non-mammalian products include biotherapeutics developed for microbial sources. The source of microbial systems is commonly used for generating recombinant protein therapeutics. Around 650 protein drugs have been approved globally, with about 400 derived from recombinant microbial technologies.
INSIGHTS BY SCALE OF OPERATION
Based on the scale of operation, the global biosimilar contract manufacturing market is segmented into commercial and research segments. In 2021, commercial accounted for the share of 85.73% in the global biosimilar contract manufacturing market. With the emergence of various chronic inflammatory conditions, cancers, autoimmune diseases, and others, there has been a growing demand for developing novel biosimilars.
Several biosimilars are in the pipeline. Due to the short span and urgency of biosimilars, researchers are working to ensure that the biosimilar can be reliably replicated at a scale for clinical trials and then again at an even greater scale for mass production. Contract manufacturing is witnessing a growing uptake because biosimilar drugs are approaching the commercial scale and entering the clinical pipeline. Even though they have well-established GMP-grade facilities, larger biopharma companies prefer to outsource manufacturing to cut costs. Contract manufacturers utilize cell-culture and microbial technologies to provide manufacturing services on a clinical and commercial scale. As a result, the contract manufacturing of biosimilars for various research activities is increasing and contributing to the growth of the research segment.
INSIGHTS BY PRODUCT
Contract manufacturing activities can be broadly divided into APIs manufacturing and FDF manufacturing. In 2021, the finished dosage form (FDF) accounted for 52.88% of the global biosimilar contract manufacturing market. An FDF is a drug product that has undergone all the production steps, including manufacturing, testing, and approval, before being delivered to the public. The FDF is an essential stage in the product life cycle, and it can only be accomplished if the pharmaceutical company's or outsourced manufacturing organization's manufacturing facilities meet high standards. Companies that do not have a standard manufacturing facility for the production of FDFs license for this primary reason.
APIs contract manufacturing shows the development of drugs with the help of contract manufacturing by outsourcing other companies. The global APIs contract manufacturing market is expected to witness increased demand during the forecast period as it has access to a skilled workforce with economical costs, favorable government policies, and tax incentives. The global active pharmaceutical ingredient biosimilar contract manufacturing market was valued at USD 1.065 billion in 2021. Manufacturing APIs is a complex and specialized activity that requires integration by chemistry, biology, and engineering experts.
INSIGHTS BY INDICATION
The global biosimilar contract manufacturing market is segmented into oncology, blood disorders, inflammation & autoimmune disorders, and other indications under the indication segment. Among these, the oncology segment dominates the industry and accounts for a 33.5% share. The development of biosimilars has been closely linked between therapeutic areas, prevalence, and the cost of diseases. Immunology and oncology are therapeutic areas with a financial burden on the healthcare systems; therefore, biosimilars are highly needed. Most FDA & EMA-approved biosimilars target inflammatory conditions. This is majorly due to the growing disease and cost burden of these chronic diseases, which is boosting the development of biosimilars, as these are highly productive and available at low costs.
Europe dominates the global biosimilar contract manufacturing market, with the most significant share of 39.44% in 2021, and is expected to grow at a CAGR of 15.14% during the projected period. A well-defined regulatory framework for biosimilars and an established biosimilar industry with leading companies such as Lonza, Boehringer Ingelheim GmbH, Rentschler Biopharma SE, and others have contributed to the increasing demand for contract manufacturing of biosimilars. Germany, France, the UK, Italy, and Spain are the major countries contributing to the region's biosimilar contract manufacturing market growth.
North America accounted for the second-highest share in the global biosimilar contract manufacturing market. Significant factors contributing to its constant growth in the market include the rising popularity of treating major chronic conditions such as inflammatory and autoimmune diseases that comprise cancers, blood disorders, and others; favorable regulatory policies and guidelines. The North American biosimilar contract manufacturing market was valued at USD 626.41 million in 2021. The development of biosimilars in the region is strictly regulated. Only those presenting a totality-of-evidence dossier with highly similar physicochemical, biological, and clinical performances are endorsed by regulatory agencies as biosimilars.
APAC will likely witness the fastest growth in the global biosimilar contract manufacturing market during the forecast period. The growing patient population with major inflammatory diseases and autoimmune disorders is raising the need for biosimilars in the region. This region has the significant advantage of less expensive treatment due to the massive income of many medical travelers. Also, rapid urbanization, growing R&D expenditures, and rising biosimilar manufacturing outsourcing will contribute to its continuous market growth. In 2021, Latin America and Middle East & Africa accounted for minimal shares in the biosimilar contract manufacturing market. These regions are expected to witness slow growth in the coming years with the emergence of biosimilar manufacturers outsourcing their products to contract manufacturers. In addition, regulations are being adjusted to facilitate the manufacture and registration of biosimilars that will significantly expand in these markets.
The global biosimilar contract manufacturing market is concentrated with key players such as Samsung biologics, Lonza, and Boehringer Ingelheim GmbH. Emerging players include AbbVie, Inc., Catalent, Emergent BioSolutions, FUJIFILM Diosynth Biotechnologies, Merck KGaA, Pfizer CentreOne, and WuXi Biologics. Most leading players focus on acquisitions, partnerships, diversifying their outsourcing services, and strengthening their distribution networks to increase their industry share. They are majorly involved in expanding existing and new markets to serve the needs of growing customer bases and boost their production capabilities to gain end-user traction.
The emergence of several emerging players intensified the competition among vendors. Major vendors offering biosimilar contract manufacturing services are present in Europe's region, including small, mid-sized, or large companies. North America and APAC contain fewer larger players and several small and mid-sized vendors. Emerging economies that include China, India, Brazil, and Mexico will likely offer significant growth opportunities for players in the biosimilar contract manufacturing market. Major vendors are becoming more active and concentrating on more diverse contract manufacturing services as required by end-users in light of growing competition and the emergence of multiple businesses.
Recent developments In The Global Biosimilar Contract Manufacturing Market
- Celltrion and Lonza announced a contract manufacturing agreement to produce a drug substance for Remsima, a biosimilar approved by the EMA and the FDA for several autoimmune diseases, including Crohn's disease and rheumatoid arthritis.
- Novartis made a contract manufacturing deal with Carisma Therapeutics, a firm developing a cell therapy platform that has developed CT-0508 for targeting HER2- positive solid tumors.
- Lonza, a leading global Biopharmaceuticals CDMO, and Junshi Biosciences collaborated to accelerate the development and manufacturing of biologics using Lonza's GS Xceed Gene Expression System in April 2021.