People
Duane Selby
Partner & Managing Director
Los Angeles
Like the rest of the life sciences industry, contract development and manufacturing organizations (CDMOs) face a host of challenges—from evolving market dynamics to shifting regulatory demands to organizational complexities—that industry executives must navigate.
However, CDMOs are also in a unique position, benefiting from the rapid expansion in complex therapies, as well as a need for more diversified and resilient supply chains among global life sciences manufacturers. Furthermore, a fragmented market, with opportunities for operational improvements and the promise of strong recurring revenue and cash flows, has attracted significant interest (and investment) from private equity.
Consolidation is clearly a major trend reshaping the CDMO industry. The recent Novo Holdings acquisition of Catalent demonstrates the power of M&A to rapidly expand capabilities, scale operations, and offer integrated, end-to-end solutions, not to mention scramble the competitive landscape for scarce production capacity for products in high demand. Rather than building new infrastructure from scratch, larger players are considering acquiring established firms to quickly access specialist technologies, advanced manufacturing capacity, and broader service portfolios. In an industry in which the top 5 CDMOs control only 15% of the market, further consolidation seems likely.
Technological advancements are another engine of growth and transformation in the CDMO industry, enabling them to deliver greater value, efficiency and innovation for their pharma and biotech partners. AI and machine learning are optimizing processes in real time and are showing real promise in modeling drug efficacy and safety, potentially resulting in shortened development timetables, reduced demand for expensive pre-clinical processes and resource models, and accelerated time-to-market for new therapies. Automated compliance tools help CDMOs stay current with evolving global regulations, reducing compliance risk and administrative burdens. New technologies are also building stronger client partnerships and greater transparency, offering new opportunities for consultative support and product co-development.
As we have seen in the results of the 6th annual AlixPartners Disruption Index, life sciences are one of the most disrupted industries in recent years, but at the same time, it offers so much promise for our future wellbeing. In the fast-moving pharmaceutical and biotech industries, CDMOs are increasingly essential, innovation-led, and agile partners for larger manufacturers. Keeping up with this pace of change, in an increasingly unstable regulatory and legislative environment, is the essential task of every executive and investor in this industry.
This report presents key insights from the AlixPartners panel discussion at the BIO International Convention, focusing on the Disruption Index and its implications for the healthcare and life sciences sectors. Drawing on perspectives from over 300 C-level and industry executives, the report explores sector-specific responses to disruption and strategic opportunities for innovation.
Access the full report here to explore:
- Executive sentiment & outlook – will optimism prevail in the face of disruption?
- Five key indicators to monitor disruption in contract and manufacturing landscape
- How leaders are leveraging trends and innovations to maintain a competitive edge
