Drug Discovery Services Market will Reach $16.6Bn in 2015

Tuesday 8 January 2013, Amsterdam

A new report predicts that the world market for drug discovery outsourcing will reach $16.6bn in 2015. That revenue forecast and others appear in Drug Discovery Outsourcing: World Market 2013-2023, published in November 2012.

This report forecasts that the drug discovery outsourcing market will experience high revenue growth from 2013 to 2023. Expansion of the market will be stimulated by the rising costs of pharma research and development (R&D), advancing technologies and development of biologics (biological drugs). The complexity and technological advances in drug discovery will make it more challenging for many companies to conduct drug discovery in-house. This report predicts that more companies will use contract service providers to gain access to technologies and skills not available in-company. Outsourcing has the advantage of flexibility, whereby a company does not have to invest heavily in facilities and equipment for research.

Opportunities in drug discovery include the formation of strategic alliances between pharmaceutical companies and contract research organisations (CROs) – a trend that will increase. In addition, niche CROs are well placed to provide services for companies needing specialised pharma research. In 2012, the drug discovery services industry is fragmented; that situation is unlikely to change soon. Service providers will still compete in crucial areas of price, quality and range of services, the study shows.

Dr Peter Williamson, a pharmaceutical industry analyst, said: “Drug discovery outsourcing is the reaction and solution to a changing pharma R&D climate. The global healthcare market will continue to have many unmet needs, requiring novel drugs to treat diseases. For example, targeted therapies in areas such as oncology and CNS disorders have high developmental needs. Outsourcing offers a platform for companies to reduce costs and improve their drug development, including getting faster and more-dependable results. There are also cost savings possible.

“Outsourcing drug discovery will result in strong revenue growth for those services in emerging countries such as China and India. Developed countries will also achieve high growth, especially to 2017, our findings show. However, entry into emerging national markets will involve challenges. For example, harmonisation of regulatory and intellectual property (IP) rights must be addressed to maintain confidence in developing countries’ markets. Quality is paramount. The US and European early-stage drug development markets will also remain competitive, offering logistical advantages and well developed technologies, including biomarkers, genomics and proteomics.”

The new report gives revenue forecasts to 2023 at overall world market, service submarket and national level. It forecasts world sales for the following segments:

• Chemical services
• Biological services
• Lead optimisation
• Lead identification and screening.

That investigation includes analyses of 13 leading companies, including Quintiles, Charles River Laboratories, Aptuit, Evotec, GenScript, PPD, WuXi AppTec and Albany Molecular Research.

The study includes researching trends and forecasting revenues in leading national markets. Countries analysed are the US, Japan, Germany, France, the UK, Spain, Italy (EU5), Brazil, Russia, India and China (BRIC nations). The analysis also discusses opportunities and developments – technological and commercial.

Drug Discovery Outsourcing: World Market 2013-2023 adds to a range of analytical reports on industries and markets in healthcare, including those on pharmaceutical outsourcing.