At the recent CPHI exhibition in a very wet Milan, you couldn’t move for booths expounding on the capabilities of the world’s manufacturing, services, packaging and ingredients players. Some of these companies formerly considered themselves to be Contract Research Organisations (CROs) or CMOs (Contract Manufacturing Organisations) but now proudly display the letters CDMO (Contract Development and Manufacturing Organisations) across their signs. In a handful of cases, companies now call themselves CRDMOs and CDTMO (the R and T stand for ‘Research’ and ‘Testing’ respectively. One called itself a PDMO (the P is for ‘Partnership’) and trademarked the name, all adding to an alphabet soup of acronyms.

But for all the buzz, are CDMOs really here to stay or are they just the latest trend in a market always looking to evolve? During the event, I hosted a round table session attended by leaders from a range of CDMOs to get their views on this and other trends in the market. You’ll find my full report from the session here but here are a few highlights from the discussion.

1. Biotechs’ role has evolved
   When it comes to innovation, biotechs are increasingly taking centre stage. As a rule, most biotechs’ goal is to take their compound through Phase II trials before seeking out a deal with a larger partner to take it to market or buy the company outright. This is one of the drivers in the rise of the CDMO. Biotechs do not typically have the infrastructure enjoyed by Big Pharma and need more support to take their assets through the pipeline. As the model changes, new opportunities have opened up for CDMOs.
2. Complexity is increasing
   The expansion of CDMOs means they’ve become increasingly complex ecosystems, in many cases not unlike the large pharma companies they work with. Having development and manufacturing sites spread around the world leads to changing business structures that don’t always support the science, particularly when they have been developed with an eye more on the P&L than the practicalities of serving the client. The ever-changing range of modalities adds another layer of complexity as CDMOs have to decide whether it makes strategic sense to jump onto the next bandwagon.
3. There is opportunity for India
   We had representatives from several India-based CDMOs at the roundtable so there was much discussion of the potential impact off the US BIOSECURE Act. It may well provide opportunity for Indian players at China’s expense, but all agreed there are hurdles to clear yet (not least the fact that the Act has not yet become law). Skills in the region need to be built out, as does scalability before any real impact can be made. However, the industry is moving to a ’+1’ strategy and a few companies are already running pilots with India-based providers to test the water.

If we were looking for a simple answer to our question about whether CDMOs were here to stay, the response from the group was a resounding ‘Yes’. The market is still down, but there was optimism that we’re only months from a rebound as biopharma recovers from a tough couple of years. Greater specialisation and the move towards more personalised medicine may reduce the need for large volumes of some drugs, while the blockbuster nature of therapies like the new generation of GLP-1s still require enormous capacity so in every space, there is opportunity to advance.

The CDMO concept may be permanent, but it’s likely that the variation in acronyms used to describe it may continue to evolve for some time. We covered much more ground during our conversation with the experts at the event, so take a look at the full report for much more detail.