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What makes your CDMO attractive to investors?

Joao Incio
By Joao Incio

Let’s talk about the big picture: the pharmaceutical industry has been on a steady climb, thanks to things like an aging population and increasing incomes. And that means more demand for specialized know-how in drug development.

That’s where CDMOs step in, providing that expertise through strategic outsourcing.

We recently joined forces with the global investment bank, Lincoln International, to dive deep into trend data from recent years, alongside ramarketing interviews with PE investors. What co-authors Joao Incio and James West uncovered spotlights why CDMOs are catching the eye of private equity investors everywhere.

As we all know, the pandemic has been a game-changer. It pushed pharmaceutical companies even further toward outsourcing for drug discovery and development. And with issues like obesity in the headlines, CDMOs are gearing up to tackle the next big health challenge.

All of this combined makes CDMOs attractive to investors, which is driving incredible growth in the sector. Investors have a checklist of what they’re looking for in a CDMO, and this report explores the factors accelerating the growth trajectory. This includes:

  • Partnerships
  • Cutting-edge lab setups
  • Being eco-friendly
  • Getting with the digital age
  • Building rock-solid supply chains
  • Knowing the ins and outs of regulation changes

Analysis of merger and acquisition (M&A) patterns within the CDMO landscape unveils a recent slowdown in transactional activities and valuations, with private equity transactions dominating nearly 80% of the M&A landscape over the past three years.

 

 

 

 

 

 

 

 

 

 

 

Despite the recent slowdown, the overall 10-year trend indicates sustained interest and private capital inflow, with the biopharma CDMO Index experiencing substantial growth, surpassing the Standard and Poor’s (S&P) 500 in recent years due to increased demand and capacity shortages.

In light of recent challenges such as the ‘COVID cliff’, CDMOs are still well-positioned to contribute to the evolving pharmaceutical landscape. PE interest underscores the attractiveness of CDMOs as investment opportunities, and this report anticipates a positive outlook for the industry, aligning with the broader trends in pharmaceutical outsourcing.


Get your copy of the whitepaper, Investment opportunities in pharma: A data-driven exploration of CDMO appeal, to gain more insight into the trends impacting our industry in 2024 and beyond.

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