Five Trends That Will Redefine the CDMO Industry in 2025

The CDMO industry saw significant growth in 2024, as biotech and pharmaceutical companies continued the trend toward outsourcing R&D activities. This surge was evident in the global CDMO market value, which ended the year with a valuation of USD 185 billion.

By outsourcing, biopharma companies can concentrate on their core business operations while also benefiting from the specialized expertise, state-of-the-art technologies, and advanced infrastructure provided by CDMOs. As the industry continues to mature, the reliance on CDMOs for innovation and operational excellence will continue, streamlining drug development timelines whilst helping to manage costs, navigate complex regulatory landscapes, and scale production to meet global demand.

Building on this momentum, the CDMO landscape is expected to continue its rapid growth, propelled by dynamic market forces, technological innovation, and shifting client demands. With rising demand for biologics, personalized medicine, and oncology therapies, CDMOs are increasingly focused on expanding their capabilities to address the challenges of a highly complex and competitive healthcare ecosystem.

"Some key 2025 CDMO developments to watch for in what I believe will be a very eventful year include: large potential acquisitions in the CDMO space, sorting out of impact on capacity after multi-billion dollar biologics, fill-finish and cell and gene investments, passage of the BioSecure Act and its consequences as well as ongoing massive industry impact of GLP-1 mega success" notes Elliott Berger, a Board Director at Orientation Marketing and a Principal Consultant at Expert Insights.

Here are five key trends that we predict will define the CDMO industry in 2025:

1. Sustained Market Growth

The global pharmaceutical CDMO market is projected to grow significantly over the next decade, to reach USD 368.7 bn by 2034; a CAGR of ~6.9%. Market growth will be fueled by an increasing number of companies outsourcing as they seek cost efficiencies, scalability, and access to specialized expertise. Biologic CDMOs will grow at an even faster pace by the end of the decade due to continuing demand for biosimilars, cell therapies, and gene therapies.

2. Outsourcing as a Strategic Imperative

Outsourcing will continue to feature heavily for pharmaceutical and biotech firms of all sizes. Large pharma will continue to use outsourcing strategies to de-risk its supply chains and complement internal manufacturing capabilities, while smaller firms will outsource due to limited in-house infrastructure. This will continue the trend seen last year within the injectable drug market - especially in biologics, vaccines and GLP-1s - as companies seek CDMO expertise to address their complex manufacturing requirements.

3. Technological Advancements Driving Efficiency

To meet client demand, CDMOs will need to continue to invest heavily in advanced manufacturing technologies, including continuous manufacturing, automation, and digital transformation. Innovation will benefit biopharma companies due to faster production cycles, reduced waste, improved scalability, and enhanced compliance.

This might also be the year that AI lives up to the hype. Production processes, predictive maintenance and quality control will be increasingly driven by AI, whilst machine learning algorithms will use historic manufacturing data to forecast potential issues, improve efficiency and reduce manufacturing downtime.

4. Industry Consolidation Gains Momentum

The CDMO landscape has significantly evolved so far this decade, yet the top five players control only 15% of the market. M&As will continue, as larger CDMOs acquire smaller firms to gain access to specialist drug delivery technologies and equipment, and to create integrated, end-to-end service offerings. Private equity investments will continue to drive this trend by funding mergers that enhance operational efficiency and scalability, mirroring the consolidation seen in contract research.

5. Regional Dynamics

North America is expected to remain the largest market for CDMOs due to its robust R&D funding models and demand for advanced therapies like cell and gene treatments. Demand for services in the Asia-Pacific region will rise however, driven by lower costs, improved compliance practices, and increasing demand for chronic disease treatments. Countries like China and India will continue their rise as key players due to their growing pharmaceutical industries and favorable regulatory environments.

Areas of Growth

Rapid growth is set to occur across several key sectors, providing significant potential for industry expansion:

• At least until the end of this decade, antibody-drug conjugates (ADCs) are poised to be one of the fastest-growing segments in the pharmaceutical industry. Fueled by significant advancements in targeting, ADC-based therapies have the potential to transform many therapy areas, including treatments for cancers

• API manufacturing will remain a key growth area, with strong demand for high-quality products creating significant opportunities for innovation and expansion. Pharmaceutical companies will increasingly leverage outsourced expertise to support these highly specialized manufacturing processes

• Oncology will remain a leading driver of demand for CDMO services. Ongoing innovations in cancer therapies and treatments are pushing the boundaries of what is possible in the oncology space, creating a continuous need for specialized services that support the development and production of these cutting-edge therapies.

A Positive Outlook for 2025…and Beyond

We predict 2025 to be another successful year for the CDMO sector as biopharma companies continue to embrace outsourcing trends, technological advancements, and strategic consolidation efforts.

Despite the optimism, the CDMOs that outperform will be those capable of best providing solutions that navigate regulatory pressures and supply chain complexities for their clients. Companies that invest in robust compliance systems, agile manufacturing processes, and effective risk management strategies on behalf of their clients are most likely to see continued success and long-term growth for the year ahead.