The market for contract-manufacturing services for biopharmaceuticals continues to expand, mirroring the growth of biopharmaceuticals.
As in the recent past, biopharmaceutical products are expected to provide most of the future growth for the large pharmaceutical
companies (1). In 2007, worldwide revenues for biopharmaceutical products are projected to exceed $65 billion, and the proportion
of pharmaceutical revenues from biotechnology drugs is expected to surpass 10% of the total market (1). This increasing growth
in biologics continues to stimulate the contract-manufacturing services industry.
A recent study by HighTech Business Decisions, Biopharmaceutical Contract Manufacturing 2007: Quality, Capacities and Emerging Technologies, analyzed the trends in the biopharmaceutical contract-manufacturing industry based on a worldwide survey of 41 biomanufacturing
directors at pharmaceutical and biotechnology companies and 27 biopharmaceutical contract manufacturers (1).
Supply of contract-manufacturing capacity has fluctuated from shortages to oversupply during the past five years. Currently,
the supply of outsourced-manufacturing capacity has overtaken demand. Most respondents in the study stated that supply is
available. During the last five years, biopharmaceutical contract manufacturers and pharmaceutical companies have made major
investments in biopharmaceutical production capacity to meet growing demand for biologics. In addition to increases in physical
capacity, new technologies and improved process technologies have increased production efficiencies and further contributed
to more available capacity.
Demand for biopharmaceutical outsourcing services
To meet the expected growth in demand, biopharmaceutical contract manufacturers have been aggressively installing capacity
during the last several years and continue to plan for more new capacity. During 2004–2008, worldwide contract-manufacturing
capacity for biopharmaceuticals is expected to grow by approximately 40% (1).
In macro terms, measuring capacity in tank liters under the two broad categories of microbial fermentation and mammalian cell
culture, the study shows that biopharmaceutical contract manufacturers' installed capacity for microbial fermentation will
reach 300,000 tank liters by 2008, an increase of 15% from two years ago. Biopharmaceutical contract manufacturers also plan
additional follow-on capacity expansions throughout the next five years. (This estimate includes capacity for biopharmaceutical
production only; microbial capacity that is used for microbially produced small molecules or products such as antibiotics
is not included.)
The expansion plans of biopharmaceutical contract manufacturers for mammalian cell-culture capacity are even more aggressive.
Worldwide outsourced mammalian cell-culture capacity is expected to reach 670,000 tank liters by 2008, a 21% increase from
two years ago. As with microbial-fermentation capacity, the biopharmaceutical contract manufacturers plan follow-on capacity
expansions during the next five years.
Biopharmaceutical contract-manufacturing expansions have kept up with demand. Most of the biomanufacturing directors at pharmaceutical
and biotechnology companies that participated in the study stated that they had no problems finding capacity for their projects
in 2006. As one biomanufacturing director noted: "For the last couple of years, it has been easy to find the capacity for
microbial fermentation at all scales. This was not true four years ago."
Although capacity has been readily available in the recent past, capacity utilization rates are currently beginning to increase
as demand catches up with earlier expansions. Biopharmaceutical contract manufacturers reported average capacity-utilization
rates of 72–87% for microbial fermentation production capacity. Average capacity utilization rates for mammalian cell-culture
production capacity vary from 65% to more than 90%. In both instances, capacity utilization rates are expected to increase
during the next two years and then drop slightly as current and planned capacity expansions come on line. An interesting point
from the study is that smaller biopharmaceutical contract manufacturers report higher utilization rates compared with larger
biopharmaceutical contract manufacturers (1).
Spending on biopharmaceutical contract production, and therefore revenues earned by biopharmaceutical contractors, was estimated
to be $2.1 billion worldwide in 2006. This global market estimate and forecast, shown in Figure 1, is based on outsourcing
expenditures for the production of biopharmaceuticals, as reported in the survey by pharmaceutical and biotechnology companies,
and on revenues recognized and capacity expansions by contract biomanufacturers, as reported in the survey. The growth in
the biopharmaceutical contract-manufacturing market results from both higher levels of product production and expanded service
offerings by biopharmaceutical contract manufacturers.
Figure 1. (HIGHTECH BUSINESS DECISIONS)