Pharma trends and predictions for 2025: An incoming CEO’s perspective
Over the past two decades, I’ve observed significant shifts in the life sciences, pharmaceutical, and CDMO landscape. Pharmaceutical companies and their outsourcing partners must continuously adapt to new market demands, regulations, and evolving technologies. Contract development and manufacturing organisations (CDMOs), in particular, will need to offer capabilities that can reduce the overall cost of drugs, add additional value to the pharma's asset, and innovate and/or integrate transformative technologies that streamline manufacturing and accelerate timelines.
The following predictions are based on firsthand interactions with clients, investors, consultants, and other industry experts, as well as trends I’ve observed in the projects my organisation has worked on in 2024 and discussed with clients for 2025. These predictions highlight the evolving landscape for small molecule CDMOs, driven by pricing pressures, technological advancements, and the crucial, ongoing need for differentiation.
1. Increased demand for cost-efficient manufacturing
Continued pricing pressures from governments and patient groups are driving small molecule CDMOs to focus on reducing the total cost of goods. CDMOs leveraging advanced manufacturing processes, such as continuous manufacturing and process optimisation, will achieve faster timelines, reduce waste, and greater scalability for their clients.
During early development, CDMOs can build agility into products by planning projects with the end in mind, while emphasising processes that ensure supply chain efficiency and scalability will add additional long-term value to their client’s products. For poorly soluble drug candidates, "Keep It Simple" strategies combined with bioavailability-enhancing technologies ensure both efficiency and scalability.
2. Paradigm shift in targets
While the last few decades saw an increase in specialty and rare diseases, the growth in GLP-1 blockbusters, the impact of the IRA on orphan indications, and an increase in molecules targeting ageing populations and metabolic diseases has resulted in growing interest in drugs targeting larger populations.
The knock-on benefits of GLP-1s to multiple disease indications, such as NASH, cardiovascular disease, and Alzheimer’s, are certain to impact the broader biopharma industry. The race to develop a more effective oral GLP-1 will require advanced formulation expertise, increasing the demands on CDMOs.
3. Product differentiation and IP-enhancing services
In 2025, CDMOs will play a bigger role in creating intellectual property (IP) for their clients by offering patient-centric formulations, novel delivery systems, and proprietary process technologies. This will add value to small pharma's assets and help stave off generic competition. Evaluate Pharma indicates that the biopharma industry is facing more than $300 billion in lost sales through 2030 due to expiring patents. Because of this, I’ve seen increased interest in patient-centric dosage forms, including controlled-release formulations and strategies to reduce pill burden. Additionally, discussing technologies that strengthen and increase the IP life of their products has become a common theme for clients.
4. AI impact on drug developability
Artificial intelligence (AI) is transforming the pharmaceutical landscape, driving efficiencies in drug discovery and development. For small molecules, AI is driving pipeline growth by opening targets once deemed “undruggable”. However, this often comes at a cost to the developability of the molecules. These molecules typically require enabling formulation technologies to ensure bioavailability or special handling due to their higher potency.
As disease targets and candidates continue to become more complex, CDMOs with enabling formulation technologies will be better positioned to support pharma companies tackling these increasingly common and pressing challenges.
5. Navigating the squeeze
While 2024 was a whirlwind for the industry’s funding outlook, I’m cautiously optimistic about the financing environment for pharma in the coming year. Even in this uncertain landscape, conversations with clients, investors, consultants, and executives have indicated that they expect their organisations to adapt and drive product development forward.
Pharma is looking to CDMOs for innovation and speed to enable this continued development on tighter budgets. CDMOs with capabilities that reduce upfront costs, such as in silico modelling or reduced API demand, that enable faster development timelines as well as add additional value to client assets, such as greater sustainability or stronger IP positions – these will bring a competitive and financial advantage to the table for potential partners.
6. Evolving science, elevated service
However, possessing cutting-edge manufacturing and analytical tools to meet the technical demands of new drugs (“high science”) is essential, but not sufficient on its own.
CDMOs must prioritise adaptability, innovation, and expert experience that spans multiple disciplines to thrive in the continually evolving pharmaceutical industry. Striking a balance between advanced, innovative technology and personalised, client-focused service is crucial in a landscape shaped by financing constraints, regulatory challenges, and broader uncertainty. “High-Science, High-Touch” CDMOs will thus successfully navigate the industry’s complex, competitive market, delivering personalised and exceptional services to their clients.
Looking ahead
Overall, CDMOs who want to maintain a competitive, operationally efficient, and customer-centric practice will increasingly integrate scalability into their processes in order to more efficiently produce larger and/or higher-quality products. When CDMOs integrate scalability into their project timelines up front, they’re planning with the end, and future, top of mind. This strongly positions them against potential economic and regulatory fluctuations while also improving cost savings, project timelines, resource consumption, and client relations.