Drug Discovery Outsourcing Market Trends and Growth Factors Analysis and Forecast 2020-2030

Drug Discovery Outsourcing Market: Introduction

According to the report, the global drug discovery outsourcing market was valued at US$ 4.5 Bn in 2019. It is projected to expand at a high CAGR during the forecast period. Drug discovery contract research organizations (CROs) are offering a range of research services on a contract basis to pharmaceutical and biotechnology companies for drug discovery. The expansion of the global drug discovery outsourcing market can be attributed to the rise in penetration of contract research organizations for pre-clinical research, increase in investments in research and development (R&D), a surge in the demand for personalized medicines, and rise in focus of pharmaceutical companies on streamlining their internal costs.

North America dominated the global drug discovery outsourcing market in 2019. The trend is anticipated to continue during the forecast period. Increase in R&D costs, rise in funding for research & development, and an increase in penetration of CROs boost the drug discovery outsourcing market in the region.

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Increase in R&D spending

Drug research and development (R&D) costs have been significantly high. These costs have been increasing continuously for the last few years. It is estimated that the cost of manufacturing a new molecule entity (NME) in 2017 was ~US$ 2 Bn to US$ 3.5 Bn. Furthermore, the total research and development spending is anticipated to increase at a rate of over 2% to 3% by 2020, primarily driven by significant unmet needs and strong technological advances. The increase in R&D costs has led to a range of biopharmaceutical companies outsourcing their research process ranging from target validation and lead optimization to animal testing and human clinical trials to CROs. Furthermore, R&D spending in oncology has been increasing significantly, which has fuelled the need for outsourcing R&D activities.

Chemical Services Dominated Global Market

In terms of service type, the chemical services segment is projected to account for a major share of the global drug discovery outsourcing market during the forecast period. The expansion of the segment can be attributed to chemical services being the core of the drug discovery services. Moreover, increase in demand for newer molecules exceeding the supply and shortage of chemists has led to a rise in outsourcing of chemical services.

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Small Molecules Drug Type to Remain Prominent

Based on drug type, the small molecules segment is anticipated to account for a major share of the global drug discovery outsourcing market during the forecast period. The expansion of the segment can be attributed to the increase in number of small molecule drugs in the pipeline. Additionally, ease of incorporation of AI and technology in drug discovery of small molecules further fuels the segment.

Drug Discovery Outsourcing Market: Prominent Regions

The global drug discovery outsourcing market has been segmented into five major regions: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America dominated the global drug discovery outsourcing market in 2019. The expansion of the drug discovery outsourcing market in the region can be attributed to the rise in focus and investments on research & development. The U.S. was a major country contributing to the expansion of the drug discovery outsourcing market in the region. Additionally, strong presence of leading market players, significant partnerships, and contracts of pharmaceutical companies with CROs for outsourcing their drug discovery process boost the drug discovery outsourcing market.

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The drug discovery outsourcing market in Asia Pacific is estimated to expand at a high CAGR from 2020 to 2030 driven by developing countries such as China and India. The expansion of the drug discovery outsourcing market in the region can be attributed to a rise in the number of contract research organizations offering drug discovery services. Additionally, increase in focus of big pharmaceutical companies on outsourcing drug discovery to countries in Asia, owing to the large target population and presence of skilled technicians further propels the drug discovery outsourcing market in the region.

Focus on Strategic Acquisitions and Partnerships by Key Players to Propel Global Market

The global drug discovery outsourcing market is fragmented in terms of number of players. Key players operating in the global drug discovery outsourcing market are CHARLES RIVER LABORATORIES INTERNATIONAL, INC., WuXi AppTec Co., Ltd., Albany Molecular Research Inc. (AMRI), GVK Biosciences Private Limited, Sygnature Discovery, Pharmaron Beijing Co., Ltd., WuXi Biologics (Cayman), Inc., Domainex Ltd., Thermo Fisher Scientific, Inc., Jubilant Biosys Ltd., Evotec SE, Eurofins Discovery, and GenScript Biotech Corporation.

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