As the demand for advanced therapies continues to grow, CDMOs are fast becoming the solution for biopharma companies that need specialized expertise and capabilities that are scalable for their drug development and commercialization.

"After years of broadening their capabilities to serve as one-stop-shops for diverse biopharma needs, CDMOs are now embracing specialization to overcome the complexities of vast networks and the challenges of excelling in every area,” comments John Chiminski, former Chair and CEO of Catalent.

In response, CDMOs are increasingly focusing their service offerings across some or all of their business on specific drug modalities, in order to tackle unique challenges posed by many of these technologies, and in search of additional and future revenue streams.

Kurt Nielsen, Ph.D., principal of Expert Insights, commented, "Over the past two decades, the evolution of CDMOs has mirrored the transformation of biopharma itself—shifting from broadly applicable technologies and therapies to precision and targeted medicines with elite levels of expertise.”

Specializing can be a differentiator for CDMOs, but also makes the inherent complexity of new modalities and technologies manageable, for the CDMO and its customers. Chiminski adds, “This strategic shift allows them to focus deeply on advanced therapies, positioning themselves as indispensable partners in delivering cutting-edge treatments."

Looking ahead to 2025, The Pharma Navigator examines the popular drug modalities that CDMOs are specializing in, and the specific opportunities and threats that each modality presents to their organizations.

Antibodies

Antibodies, particularly monoclonal antibodies (mAbs), have quickly become an essential component in modern medicine. As demand for targeted therapies rises, CDMOs specializing in antibody production stand to benefit from the expanding pipeline of antibody-drug conjugates (ADCs) and bi-specific antibodies. Biotech firms developing advanced antibodies, such as tri-specifics, can tap into CDMOs for significant growth opportunities. With next-generation therapies holding promise for treating hard-to-target cancers, CDMOs have a great opportunity to forge long-term partnerships with biopharma companies that need specialized antibody manufacturing.

However, the antibody market is not without its challenges. Producing complex biologics, like monoclonal antibodies, ADCs, and bi- and tri-specifics, requires highly specialized technology and specific quality measures. And fierce competition in this sector may put pressure on margins, making it harder for CDMOs to make activities profitable.

Viral Vectors

Viral vectors are at the heart of the rapidly expanding cell & gene therapy (CGT) sector, creating high demand for CDMOs specializing in viral vector production. As further CGT programs enter development and the segment gains momentum, CDMOs that can provide reliable and scalable viral vector production will be essential in progressing therapies to market, through expertise in process development, large-scale manufacturing, and competence in interpreting and implementing regulatory needs. Given the long timelines and regulatory hurdles associated with gene therapy, CDMOs establishing early expertise can provide themselves with significant competitive advantage to access a high-growth market and build a reputation as leaders in the CGT space, however, they do so with some risk...

The sector is still maturing, the long-term financial sustainability of many gene therapy companies remains uncertain, and approval of candidates is not certain. With viral vector manufacturing becoming an increasingly complex and cost-intensive process, there is a high demand for sophisticated infrastructure and expertise. With significant costs associated with such therapies, contamination or failed batches can halt clinical trials or delay market entry and impart significant financial risk on the partner CDMO.

RNA Therapeutics

The rise of mRNA vaccines during the pandemic has sparked significant interest in RNA-based therapeutics, opening new avenues for treatment across infectious diseases, cancer, and genetic disorders. CDMOs specializing in RNA manufacturing, are capitalizing on this trend by offering services that range from lipid nanoparticle (LNP) formulation to mRNA synthesis, and capping technologies, which provide a protective shield for mRNA and are essential for its stability, translation, and overall functionality.

The potential for RNA therapeutics to transform healthcare is vast. CDMOs that focus on this modality can tap into a rapidly growing field, build expertise in a highly sought-after area of drug development, and identify opportunities to secure long-term partnerships with biopharmaceutical innovators.

However, the complexity of RNA-based therapeutics poses significant risks. The technology is still relatively new, and challenges around stability, delivery, and production efficiency remain as concerns. The competitive landscape is also intensifying with many players entering; adding to price pressures and reducing margins.

Vaccines

Whilst mRNA stole much of the limelight, the pandemic highlighted the need for faster, more scalable ‘traditional’ vaccine production too. Demand for vaccine manufacturing capabilities is increasing - especially for emerging infectious diseases – and focusing on personalized vaccines offers ample opportunities for drug development.

While stable, the vaccine market is highly competitive, and the need for quick turnarounds, scalability, and regulatory compliance puts immense pressure on vaccine CDMOs. Additionally, vaccine technologies are evolving rapidly, challenging CDMOs to keep pace with new requirements and technologies.

Exosomes

Exosomes are small vesicles that can carry genetic material and proteins to target cells, offering a potential treatment for a variety of diseases. They provide several opportunities to developers, including a natural ability to transport molecules across cell membranes. Exosome-based therapies are niche, but present the technology offers high-growth potential and an exciting frontier in advanced therapeutics.

Still in its infancy, exosome production is challenging to scale, retain consistency, and issues around regulatory approval remain unresolved. The market is still determining the best methods for large-scale production.

“Specialization is no longer a choice but a necessity, as drug modalities like multi-specific MAbs, RNA therapeutics, and viral vectors demand unparalleled focus on engineering, science and innovation,” adds Nielsen. The CDMOs that will succeed are those that understand this dynamic and position themselves as not just service providers, but as strategic partners with biopharma shaping the future of medicine. It's a brave new world for CDMOs!"

The Strategic Shift to CDMO Specialization

As biopharma advances toward personalized, complex, and groundbreaking therapies, CDMOs are increasingly narrowing their focus to specific drug modalities and capabilities that attract clients and offer superior solutions.

“We have seen many of the larger, top-tier CDMOs expand their capabilities through the addition of technologies for both large and small molecule products,” commented Will Downie, Former CEO of Vectura and Chief Commercial Officer at Catalent. “More recently, with the advent of personalized healthcare and a focus on complex biologics production, several players have emerged in the market who successfully combine specialized technology solutions with true global scale".

Elliott Berger, board director at Orientation Marketing and a former CMO of Catalent speculates on how CDMOs are segmenting, “Large, specialist players with good scale and top-notch capabilities represent a new type of competitor in the CDMO space, falling between mega players and smaller, highly specialized, one segment, companies."

The strategic focus of these companies is not without its challenges, and demands expertise, often substantial investment in cutting-edge innovations, and the ability to navigate intensifying market competition.

“Recognizing the trend toward more specialized and targeted therapies, we leverage our experience through focused centers of excellence,” said J.D. Mowery, divisional president of Bora Pharmaceuticals CDMO business. “This approach enables us to pair a concentration on critical technologies with global scale and infrastructure,” he added.

By targeting high-growth sectors, CDMOs are not just adapting - they are redefining their role as indispensable components of the biopharma ecosystem, in 2025 and beyond. For these reasons and others, the ideal is for biopharma to develop lasting partnerships with their CDMO partners. Tom Sellig, CEO of Adare Pharma Solutions, comments, "As the pharma landscape becomes increasingly complex, CDMOs must evolve from service providers to strategic collaborators. “Specialization isn't just a strategy for growth, it's a necessity for survival. By specializing in cutting-edge technologies, CDMOs can not only stay ahead of market demands but also empower their partners to deliver transformative treatments to patients faster."