Indian CDMOs on the rise as they boost their global competitiveness: report

The contract development and manufacturing organization market in India is expected to grow from $7 billion to $14 billion by 2028, capturing 4% to 5% of the global CDMO market, according to a new report from Boston Consulting Group.

The report noted that Indian CDMOs are “already well-established in the global Active Pharmaceutical Ingredient (API) and generic drug manufacturing space and offer competitive cost-effective alternatives to China.”

Boston Consulting Group found that Indian pharma services are priced 20% cheaper than their Chinese counterparts and the expansion of Indian CDMOs includes advancements in new therapies such as antibody-drug conjugates (ADCs), with the global CDMO market for new modalities projected to reach $20 billion by 2028.

“Indian CDMOs are scaling globally, leveraging their cost efficiencies but also starting to make early strides into complex and cutting-edge modalities such as ADCs and oligonucleotides, enhancing their global competitiveness,” Smruthi Suryaprakash, partner at Boston Consulting Group, said in a statement.

The report pointed out that several Indian CDMOs are building capabilities “inorganically” in new modalities, including Suven Pharma and Piramal Pharma.

Recently, Suven announced a merger with Cohance Lifesciences “to gain capability” in ADCs, according to the report, and “has also entered the oligonucleotides and nucleic acid therapeutics space through its acquisition of Sapala Lifesciences.” Boston Consulting Group also noted Piramal’s series of acquisitions to “bolster its ADC and high-potency API offerings” including Ash Stevens in the U.S. and Hemmo Pharma in India.

According to a recent report from consulting firm McKinsey & Company, India could potentially account for 8% to 10% of work share outsourced to CDMOs globally by 2033, largely driven by the “evolving geopolitical environment” including the BIOSECURE Act — which seeks to prevent U.S. federal funds from supporting certain Chinese contract manufacturers.

The Boston Consulting Group report makes the case that “the opportunity becomes more tangible” with the BIOSECURE Act being passed in the U.S. House of Representatives last year, while noting 50% year-over-year growth in request for proposals for some Indian CDMOs in 2024.

Anirudh Roy Popli, partner at McKinsey & Company, in a statement said that the biopharma industry is increasingly recognizing the value Indian CDMOs bring to the table. “However, building trust and long-term, at-scale partnerships takes time,” he said. “With a strong focus on value and innovation, Indian CDMOs are well-positioned.”

Last month, India-based CDMO Anthem Biosciences filed for a $397 million initial public offering amid a red-hot Indian IPO market. With two manufacturing sites in Bengaluru, Anthem is “going public at a time when global drugmakers are turning to India and other markets to limit their reliance on Chinese contractors,” Reuters reported.

Also last month, Indian CDMO Akums Drugs & Pharmaceuticals announced a $200 million agreement with an undisclosed “leading global pharma company” to manufacture select oral liquid formulations for the European market. As part of the deal, Akums will receive an upfront payment of $100 million for product development and site approval from European authorities.

Asked about the potential growth of Indian CDMOs, Lars Petersen, CEO of Fujifilm Diosynth Biotechnologies, told Pharma Manufacturing earlier this month that his CDMO doesn’t have manufacturing facilities in India and when it comes to large-scale production, he doesn’t “know of anybody [there] who really builds what we consider our core business yet.” However, Petersen said he’s “sure it will happen” as the BIOSECURE Act “pushes a lot of investment from China to India.”