CDMOs Scale Up

At least 6 CDMOs have reached the billion dollar revenue threshold 1/, and more are approaching that point 2/. Those CDMOs are reaching the manufacturing scale of the largest bio/pharma companies, changing their strategic options and the dynamics of the CDMO industry.

The largest CDMOs have attributes that make them realistic strategic manufacturing options for the major biopharma companies. Those include:

  • Economies of scale
  • Broad capabilities
  • Deep technology bases including the highest value technologies line gene and cell therapy, large molecule biologics, and high potency small molecules
  • Access to capital
  • Diversified portfolios
  • Sophisticated executive ranks and support business infrastructure (finance, strategy, human resources)

These characteristics enable them to work credibly with major bio/pharma companies and develop bespoke deals and relationships that cater to their specific needs. As the major CDMOs take on the characteristics of major global corporations, their sheer size and focus will alter the dynamics of the industry. With their scale and overhead, these large companies will be increasingly unwilling to take on smaller emerging biopharma companies as clients because their projects won’t “move the needle” in terms of revenue and profit growth; and will be challenged to cover the high cost burdens that the big companies will have to charge them. This will leave a big portion of the market open to small CDMOs that can be more cost competitive and flexible than the behemoths.

At the same time however, these dynamics could cause problems for mid-size CDMOs, which will lack the scale advantages of the biggest players but typically can’t match the low overhead and flexibility of smaller players. This squeezing of mid-size players is a classic problem in the evolution of industries.

This session will address the evolving dynamics of the CDMO industry, in particular, how the business of the “mega CDMOs” is likely to evolve, and the implications for competition among smaller and specialty CDMOs.


JIM MILLER | Advisor on Bio/Pharmaceutical Manufacturing Strategy


LEON WYSZKOWSKI | President, Commercial Operations, Pharma Services | Thermo Fisher Scientific
ELLIOT VAUGHN | Managing Director & Partner, Boston Consulting Group (BCG)
VINCE RICEVUTO | Vice President, Head of Directs and Manufacturing Site Procurement | GSK
MARK CASSIDY | CEO & President | Ajinomoto Bio-Pharma Services Europe
DEREK SEABORN | Vice President Global External Sourcing | AstraZeneca