With fewer biopharma companies performing all their manufacturing in-house, CDMOs provide much-needed, at-scale production capacity, as well as outsourced services such as drug development and testing to reduce costs and tap outside expertise.
The global CDMO market is expected to grow from $173 billion in 2023 to $345 billion by 2033, according to PCI. Among the factors contributing to the growth of the CDMO market is increasing demand for advanced therapeutics such as biologics and gene therapies to treat complex diseases and improve patient outcomes, as well as services like active pharmaceutical ingredient (API) manufacturing, drug production, and regulatory support.
This week’s announcement about a new multibillion-dollar investment in PCI Pharma Services is good news for contract development and manufacturing organizations.
The big news this week was PCI Pharma Services’ securing of a very large private equity investment co-led by Bain Capital and existing lead investor Kohlberg, with continued support from Mubadala Investment Company and Partners Group.
The deal values the global contract development and manufacturing organization (CDMO) at $10 billion, including debt, according to The Wall Street Journal. The article noted that since Kohlberg’s investment in 2020, PCI has more than doubled its revenue and quadrupled its customer base. “The company supports 25% of the top 200 drugs and is backing over 2,300 drugs in development, planning to expand its services.”
The latest investment will fund PCI’s expansion of its sterile fill-finish, high-potent manufacturing, and biologics capabilities. In a LinkedIn posting, Miriam Gottfried, the WSJ reporter who wrote the article and covers private equity exclaimed: “Big deals aren’t dead!”
Jack Shute, managing director of U.K.-based staffing and recruiting firm Vector, wrote in a LinkedIn post that the deal “reflects growing recognition that CDMOs with scale, technical depth and global reach are foundational to drug development and delivery,” adding that “institutional investors are now treating these businesses as strategic, long-term assets.”
With fewer biopharma companies performing all their manufacturing in-house, CDMOs provide much-needed, at-scale production capacity, as well as outsourced services such as drug development and testing to reduce costs and tap outside expertise.
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