During a recent quarterly earnings call, the head of one of the busiest contract development and manufacturing organizations (CDMOs) warned that in the coming months, biopharma companies will probably cut drug discovery activity. “The lack of a recovery in demand for our biotech clients as well as recently emerging and softening demand trends in our global biopharma client base have caused us to take a much more negative view of our growth prospects for the second half of the year,” said James C. Foster, chairman, president, and CEO of Charles River Laboratories. (Note: Charles River appears in a “companies to watch” sidebar that accompanies the online version of this article. The company does not indicate how much revenue from its Manufacturing Solutions segment reflects CDMO activity, confounding GEN’s Top 10 ranking scheme.)

Foster also noted that most global biopharma companies have restructuring programs, which are “likely precipitated by the Inflation Reduction Act or pending patent expirations or both.” Essentially, companies are tightening their budgets and pruning their pipelines.

“Revenue for this client base continued to increase in the second quarter; however, proposal activity and bookings began to notably decline and diverge from biotech clients during the second quarter,” Foster explained. “Because of this, the second half revenue growth that we previously anticipated will not materialize. And in fact, demand is expected to continue to soften for global biopharmaceutical clients in the near term.

“We expect that these actions and the resulting softening of our demand key performance indicators will continue to cause a period of slower spending by large pharma companies on their early-stage drug development activities, particularly because they are more focused on their clinical pipelines at this time. This is a pretty unexpected and rapid deterioration of the large pharma companies’ business.”

That downturn was not apparent last year, as seven of the companies ranked among GEN’s top 10 CDMOs grew revenue (two saw declines; one stayed flat). The combined 2023 revenue of the top 10 CDMOs rose 7% from 2022, climbing from $28.22 billion to $30.237 billion.

Indeed, a more optimistic forecast for CDMOs emerged July 29 from a survey by Jefferies of 25 biopharma clients of CDMOs. The survey showed growing demand for emerging modalities (including peptides, antibody-drug conjugates, radioligands, oligonucleotides, and cell and gene therapies) and identified two “headwinds” (or challenges to companies planning CDMO activity): raising financing and navigating regulatory delays.

Another finding from the survey concerned the proposed BIOSECURE Act (U.S. House of Representatives bill H.R. 7085; U.S. Senate bill S. 3558), which would restrict the U.S. activity of five Chinese biotech companies on national security grounds. The act is expected to drive more business to CDMOs outside China. Finally, the Jeffries team, led by James Vane-Tempest, Head of European Healthcare Research, noted that Lonza “is a clear potential industry winner.”

But without further ado, here is this year’s Top 10 A-List of CDMOs. The companies are ranked by 2023 revenues, as disclosed by the companies in regulatory filings or in responses to GEN’s queries. Several of the CDMOs also furnished quarterly or half-year revenues for 2024.

1. Lonza Group
Basel, Switzerland
CHF 6.717 billion ($7.73 billion)

• Appointed Wolfgang Wienand, PhD, as CEO effective July 1.

• Finished H1 2024 with core earnings before interest, taxes, depreciation, and amortization of CHF 893 million ($1.028 billion), down 3% from CHF 922 million ($1.066 billion), on revenue of CHF 3.057 billion ($3.519 billion), down 0.7% from CHF 3.078 billion ($3.558 billion) in H1 2023

• Agreed in March to acquire Genentech’s large-scale biologics manufacturing site in Vacaville, CA for $1.2 billion from Genentech’s parent, Roche.

2.Thermo Fisher Scientific
Waltham, MA
$6.967 billion1

• Finished Q2 2024 with net income of $1.553 billion, up 14% from Q2 2023, on revenue that dipped 1.4% year over year, to $10.541 billion.

• Completed $3.1 billion acquisition of Olink Holding in July. The deal added Uppsala, Sweden-based Olink’s proteomics platform to the buyer’s offerings.

• Introduced the Gibco CTS OpTmizer One Serum-Free Medium, which is designed to support cell therapy manufacturing.

3. Catalent
Somerset, NJ
$4.135 billion2

• Awaiting completion of $16.5 billion acquisition by Novo Holdings, the asset manager of the foundation that controls Novo Nordisk. Novo Holdings will sell three Catalent fill-finish sites to Novo Nordisk for $11 billion upfront.

• Completed expansion of clinical supply facility in Schorndorf, Germany, increasing the site’s footprint by 32,000 square feet.

4. Samsung Biologics
Incheon, South Korea
KRW 3.695 trillion ($2.695 billion)

• Disclosed July 2 that it signed a KRW 1.464 trillion ($1.068 billion) biologics CDMO contract with a U.S.-based pharma company.

• Ended Q2 with operating profit of KRW 329.2 billion ($240.1 million), up 48% from a year ago, on KRW 810.2 billion ($591 million) in revenues, up 27% from Q2 2023, on a standalone basis.

• Agreed with Seoul National University to offer top-performing undergraduates master’s scholarships and opportunities to work at the company.

5. WuXi Biologics
Wuxi, China
RMB 17.034 billion ($2.373 billion)

• One of the Chinese biotech companies that will have its U.S. activities restricted if the BIOSECURE Act becomes law. The U.S. accounts for 62% of company sales.

• Entered into a three-year, multitarget strategic partnership with Medigene to design and co-research T-cell-receptor-guided T-Cell Engagers.

• Installed three sets of 5,000 L single-use bioreactors in the second drug substance line at its MFG20 drug substance manufacturing facility in Hangzhou, increasing total capacity to 23,000 L.

6. Siegfried
Zofingen, Switzerland
CHF 1.272 billion ($1.463 billion)

• Appointed Marcel Imwinkelried as CEO effective September 1.

• Completed the acquisition of an early-phase CDMO site in Grafton, WI, from Curia Global, strengthening Siegfried’s capabilities and geographical coverage in drug substances.

7. Recipharm
Stockholm, Sweden
€1.321 million ($1.442 billion)

• Sold to U.S.-based Blue Wolf Capital Partners seven sites (five sites in Sweden, one in France, and one in Spain). The deal is expected to close in Q4, subject to regulatory approvals.

• Spun out former Advanced Delivery Systems Business Unit to form a new standalone company, Bespak, focused on drug-device combination products and drug delivery devices for pulmonary and nasal inhalation. Bespak has two U.K sites and one U.S. site (an early-stage laboratory in Research Triangle Park, NC).

8. Fujifilm Diosynth Biotechnologies/Fujifilm
College Station, TX/Tokyo, Japan
¥203.4 billion ($1.376 billion)3

• Investing an additional $1.2 billion into a facility that is being built in Holly Springs, NC, adding eight 20,000 L mammalian cell culture bioreactors by 2028 to the eight 20,000 L bioreactors planned for the initial $2 billion project.

• Completing a DKK 11 billion ($1.609 billion) expansion of its facility in Hillerød, Denmark, making it the largest end-to-end CDMO in Europe and creating 450 new jobs.

• Eliminated 240 jobs in College Station, TX; Raleigh, NC; Watertown, MA; and Teesside, U.K., citing decreased activity in its small-scale unit.

9. Boehringer Ingelheim
Ingelheim, Germany
€1.091 million ($1.191 billion) 4

• Passed preapproval inspections by the FDA and EMA for its Oasis biopharma site in Shanghai, in collaboration with an undisclosed customer.

• The company’s Yongda Zhang, PhD, and his team received an award from the American Chemical Society for green chemistry and engineering.

10. MilliporeSigma/Merck KGaA
Burlington, MA/Darmstadt, Germany
€792 million ($864.8 million)5

• Closed August 1 on its acquisition of Mirus Bio for approximately $600 million from Gamma Biosciences, a life sciences platform established by global investment firm KKR. The deal was intended to reinforce the buyer’s viral vector manufacturing capabilities.

• Finished the H1 2024 with €351 million ($383 million), down 4% from €366 million (about $400 million) a year earlier.5

• Offering SMCxPRO immunoassay technology to help detect low levels of a biomarker associated with cell dysfunction in patients, through support from the Michael J. Fox Foundation.

 

References

1. This Thermo Fisher figure reflects the approximately 30% share of revenues generated by the Pharma Services business of Thermo Fisher’s Laboratory Products and Biopharma Services segment in 2022, the most recent year for which a figure was available, according to a chart presented during the 2023 Investor Day. Through a spokesperson, Thermo Fisher offered no comment on projections made July 14 by analysts at Jefferies that CDMO activity will account for 8% of 2025 revenues, and that bioprocessing activity will account for 9% of 2025 revenues. The combined 17% would total $8.022 billion, up 15% from the 2022 revenue figure reported here. Jefferies projects that Thermo Fisher’s overall revenue will rise 7% in 2025, to $45.957 billion.

2. This Catalent figure reflects net revenue for the four most recent quarters for which the CDMO published results—the fourth quarter of FY 2023 (April–June 2023) and the first three quarters of FY 2024 (July 2023–March 2024). FY 2024 ended on June 30, 2024.

3. This Fujifilm Diosynth figure is the sum of Q1–Q4 fiscal year 2023 quarterly revenue figures for the “Bio CDMO” business within the Healthcare segment of Fujifilm Holdings, whose subsidiaries include CDMO Fujifilm Diosynth Biotechnologies. Fujifilm operates on a fiscal year that runs from April 1 of the named FY to March 31. FY 2023 covers the 12 months starting April 1, 2023, and ending March 31, 2024.

4. This Boehringer Ingelheim figure reflects revenue for the BioXcellence division (biopharmaceutical contract production), furnished by the company within its annual reports.

5. This MilliporeSigma figure reflect parent company Merck KGaA’s Life Science Services business unit, which includes CDMO and contract testing services.

 

Read our accompanying 8 Contract Development and Manufacturing Companies to Watch.

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