by Drug discovery outsourcing refers to the process of transferring some or all parts of the discovery and preclinical development of drug candidates to contract research organizations by pharmaceutical and biotechnology companies. This helps companies to focus on their core competencies and deliver value. The outsourcing company provides various services starting from target validation, hit generation, lead optimization, preclinical and clinical development, and regulatory services. The companies involved in drug discovery outsourcing have expertise in areas of molecular modeling, high throughput screening, medicinal chemistry and pharmaceutical analysis. They work on variety of therapeutic areas such as oncology, metabolic disorders, cardiovascular diseases, and infectious diseases.
The global Drug Discovery Outsourcing Market is estimated to be valued at Us$ 3825.2 Mn in 2023 and is expected to exhibit a CAGR Of 5.6% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The increasing research and development activities performed by pharmaceutical companies have led to the growth in outsourcing of drug discovery related services. As per estimates, over 70% of drugs under clinical development have used some outsourcing services. Many big pharmaceutical companies lack in-house capabilities or aim to optimize their costs by outsourcing drug discovery work. This has boosted the drug discovery outsourcing market. Further, technological advancements like artificial intelligence, machine learning and big data analytics help expedite the drug discovery process and reduce costs. Outsourcing companies make use of these advanced technologies to screen huge databases, prioritize targets and optimize lead compounds. This has increased the efficiency of drug development and positively impacted the market growth.
Segment Analysis
The drug discovery outsourcing market is segmented into small molecules and large molecules. Small molecule outsourcing dominates the market with around 70% share and is expected to remain the dominant segment during the forecast period. Drug developers prefer outsourcing small molecule discovery projects due to expedited discovery process and reduced cost involved.
PEST Analysis
Political: Governments across major countries are supporting outsourcing of drug discovery activities by offering tax benefits and simplified approval processes to contract research organizations (CROs) to increase local R&D investments.
Economic: The high cost of drug discovery and pressure to reduce drug development costs is a major factor driving increased outsourcing of drug discovery projects to low-cost regions.
Social: Increased investments in medical research for treating chronic diseases such as cancer and high demand for cost-effective therapeutics are supporting the growth of outsourced drug discovery activities.
Technological: Advancements in technologies such as artificial intelligence, high throughput screening, and structure-based drug design have increased the efficiency of drug discovery process and attracted more pharmaceutical companies to outsource such activities.
Key Takeaways
The Global Drug Discovery Outsourcing Market Size is expected to witness high growth over the forecast period due to increasing R&D expenditures of pharmaceutical companies and growing need for cost control.
Regional analysis:
North America dominates the global market due to presence of majority global pharmaceutical companies in the US and government support for research activities. Asia Pacific is expected to be the fastest growing region during the forecast period owing to low-cost operations and increasing government investments in life science research.
Key players:
Key players operating in the drug discovery outsourcing market are Sigma-Aldrich Corporation (Now part of Merck KGaA), Biotain Pharma Co., Ltd., New Zealand Health Food Company Limited, XABC Biotech Co., Ltd., BIOFAC A/S, Chaitanya Biologicals Pvt. Ltd., Serolab SA, Auckland BioSciences Limited, ANZCO Foods Limited & Biocontinental Co., Ltd.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
