What emerging opportunities are fueling growth in drug discovery and early development outsourcing services?

As of April 2023, the global pharmaceutical R&D pipeline has over 6000 molecules in active clinical development phase, showing a 5.8% increase from 2022. However, the pharma/biopharma industry overall shows stagnant R&D activity. Total R&D expenditure is approximately $276.81 billion, with a modest 2.5% growth from 2023 to 2024.

The Pharma industry is facing a declining average ROI for R&D, dropping to 1.2%, and peak sales per asset hovering just above $350 million. This underscores the urgency to streamline drug development with newer technologies. Surprisingly, the top 10 pharma companies contribute only 4-5% to the R&D pipeline, while the top 25 contribute less than 10%. Conversely, small-to-mid, and emerging biopharma players, with 1 or 2 molecules in the pipeline, contribute over 16%. This is fueling the growing demand for outsourcing, with CROs and CDMOs driving industry growth. Overall, advancements in multiple emerging biotechnology platforms (such as RNA technology, protein degradation – proteolysis targeting chimeric [PROTAC] technology, and antibody engineering technologies) coupled with the application of digital health technologies in the form of artificial intelligence (AI) and machine learning (ML) are supporting unprecedented innovation, ascertaining increased success of a molecule, further improving the partnership landscape across the global drug discovery and preclinical development industry.

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