07 September 2020
Visiongain has published a new pharma report on Drug Discovery Outsourcing Market: Forecasts by Service Type (Chemistry Services, Biology Services, Lead Identification & Screening Services, Lead Optimisation Services), Molecule Type (Large Molecule Drugs, Small Molecule Drugs), Therapeutic Area (Oncology, Infectious Disease, Central Nervous System, Immunology, Cardiovascular Disease, Metabolic Disease, Respiratory Disease, Others), Region (North America, Europe, Asia Pacific, Latin America, Middle East, and Africa) PLUS COVID-19 Recovery Scenarios and Profiles of Leading Drug Discovery Outsourcing Companies.
The global drug discovery outsourcing market was valued at US$ xx million in 2019 and is projected to reach a market value of US$ xx million by 2030. Rising research and development (R&D) expenditure for the development of medicines is one of the primary factors driving the demand for drug discovery outsourcing services. Growing focus on the development of low cost and reliable medicines leads to an increase in competition in the pharmaceutical market will significantly contribute to the growth of the drug discovery outsourcing market. Owing to the lack of sufficient manufacturing facilities & capital and lack of experience, small to medium-sized pharmaceutical companies are gradually turning to outsource drug development.
COVID-19 Impact on Drug Discovery Outsourcing Market
The current COVID-19 pandemic is anticipated to have a minor impact on the overall outsourcing business outlook for global drug discovery. Also, significant growth during the COVID-19 pandemic is expected to be seen in the outsourcing of drugs and medicines needed to treat COVID-19 infections. Pharmaceutical firms are likely to turn to domestic players for outsourcing drug research rather than to other foreign markets dependent businesses. Logistical problems may potentially present an obstacle in the supply chain, along with trade restrictions. Pharmaceutical companies are extremely dependent on the drug development outsourcing services to meet the growing demand from the increasing number of COVID-19 patients worldwide. Many companies are investing in R&D activities for the development of the COVID-19 vaccine. Continued investments coupled with the growing need for a vaccine for the treatment of corona virus-infected patients are set to boost the market growth.
The rise in R&D spending
The costs of research and development (R&D) on drugs is substantially high. Over the past few years, these costs have gradually risen. The cost of manufacturing a new molecule entity in 2017 is estimated to have been ~US$ 2 billion to US$ 3.5 billion. The overall R&D spending is expected to increase at a rate of 2% to 3% by 2020. This growth is primarily attributed to the substantial unmet medical needs coupled with the improved technology. This rise in the R&D costs leads to the pharmaceutical companies the adoption of drug discovery outsourcing services, that includes lead identification & screening and lead optimization, for the drug development.
The rise in the Outsourcing of R&D activities
The sector has been growing, powered by the rising fundamentals of the biopharmaceutical industry. Biopharmaceutical companies are now at the end of the multi-year patent cliff battle and hence they are scaling up their investments in the late-stage pipelines. Moreover, biopharmaceutical companies increasingly outsource R&D research to CROs, mainly to access new technologies, transfer fixed to variable costs, and expand their global scope. Together, these factors are projected to increase the share of outsourced services from the existing 24-28% to 35% by 2018 and more than 60% over the longer term.
Integration of Artificial Intelligence in Drug Discovery Outsourcing
Integration of Artificial Intelligence in Drug Discovery Outsourcing will lead to Strategic M&A Activity
Biopharmaceutical companies are increasingly investing in AI-driven technologies as these can be easily adopted for R&D outsourcing services. This, in turn, will lead to the number of mergers & acquisitions to quickly gain access to the necessary expertise and technology know-how. This upward trend in the outsourcing field can be majorly attributed to several factors – the intricate nature of artificial intelligence, a need for sophisticated IT infrastructure, and a dearth of highly competent data science experts for supporting research in machine learning.
Discovering and Designing Drugs with Big Data and Artificial Intelligence
Artificial intelligence will reduce the time it takes for correct diagnosis to be made and streamline the road to finding and creating therapies for devastating diseases. Artificial intelligence can help identify new substances that can become new medicines, find or repurpose medicines, and develop the field of personalized medicine.
Some of the companies profiled in the report include GVK Bio, WuXi AppTec, Charles River Laboratories, Sygnature Discovery, Domainex, Syngene, Jubilant Biosys, Evotec, Eurofins, and GenScript. The major players across the globe are adopting several growth strategies to consolidate their position in the market. For instance, Charles River acquired a leading CRO Citoxlab in April 2019. Citoxlab specializes in unregulated discovery services, safety evaluation services, and medical device testing services. Citoxlab offers a wide range of early-stage services that would improve the current capacities of Charles River. Likewise, in August 2017, the Aptuit acquisition was completed by Evotec AG. This strategic acquisition enabled Evotec to become one of the preferred industry partners for external innovation.
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