Global CDMO Market Landscape and Pharmaceutical Capacity Competition Set for Major Shifts

　　【Pharmaceutical Network Market AnalysisLonza's $1.2 Billion Acquisition of Roche's U.S. Plant, AbbVie, Novartis, and Novo Nordisk Increasing Production Capacity in Singapore, China… A New Wave of Competition in the Global CDMO Market and Pharmaceutical Production Capacity May Be Stirred.
 

Reportedly, on March 20, CDMO company Lonza announced the acquisition of Genentech's biologics manufacturing facility for $1.2 billion. Lonza plans to invest an additional $560 million to upgrade the facility, enhancing its capabilities in next-generation biologics therapies.
 

This acquisition will enhance Lonza's large-scale biologics production capabilities to meet customer demand for commercial mammalian contract manufacturing of existing commercial products, as well as molecules currently advancing towards commercialization within Lonza’s network. Under the agreement, Lonza will offer employment opportunities to approximately 750 employees at Genentech's Vacaville facility.
 

It is reported that Lonza has high hopes for the new plant, believing that the deal is expected to drive sales growth. Lonza has updated its mid-term guidance for 2024-2028, revising its sales CAGR (Compound Annual Growth Rate) from 11%-13% to 12%-15% (at CER).
 

In addition to Lonza, some CDMO companies and large multinational pharmaceutical enterprises (MNCs) are also seeking new supply chain expansion opportunities. On March 19, WuXi Biologics announced the groundbreaking ceremony for its integrated CRDMO center located in Tuas Biomedical Park, Singapore, marking the official start of the construction phase. The center, which covers an area of 13.5 hectares, will provide integrated research, development, and manufacturing services for biologics in the future. The facility is designed with a planned production capacity of 120,000 liters and will offer 1,500 job positions.
 

WuXi Biologics stated that its integrated CRDMO center in Singapore will become an important base for serving the emerging Asia-Pacific markets as well as global markets. The integrated CRDMO center in Singapore will be equipped with the company’s innovative technology platforms, single-use technologies, and other facilities to provide customers with integrated R&D and manufacturing services that are both time-efficient and cost-effective. Meanwhile, adhering to its ESG development strategy, WuXi Biologics will fully integrate the concept of sustainability into the design and construction of the Singapore site, adopting comprehensive digital tools and installing energy-saving and emission-reduction facilities.
 

On March 19, Novo Nordisk announced an investment of approximately 4 billion RMB in Tianjin, China, for the expansion project of aseptic formulations. This production expansion project for aseptic formulations will adopt isolator technology to provide a higher level of aseptic assurance for formulation manufacturing. The entire project is planned to be completed by 2027.
 

Novo Nordisk stated that the Tianjin production plant is one of Novo Nordisk's important global production bases, playing a significant role in the global supply chain. Through this expansion of sterile formulation production, it will achieve a further increase in capacity.
 

On March 15, Novartis announced that it would invest $256 million to expand its biopharmaceutical production facilities in Singapore, among other projects.
 

Acquisitions, capacity expansion... Industry insiders indicate that pharmaceutical companies are sparking a wave of adjustments in the global pharmaceutical production capacity layout. However, on the other hand, with the intensification of industry competition, many companies are also facing situations such as factory closures and layoffs. For instance, Lonza announced earlier this year the closure of its biotechnology plant located in the New Knowledge City in Guangzhou Development Zone, mainly due to "lack of orders." CDMO company New Vision Pharmaceuticals recently also announced the shutdown of its aseptic blow-fill-seal production facility in Florida, USA, resulting in unemployment for 88 employees.
 

Disclaimer: In no event shall the information or opinions expressed in this article constitute investment advice to any person.