The Marketplace

We continue to invest in our partnerships as the global R&D market provides ample opportunities, creating new avenues for innovation and earnings for the Company and all stakeholders.

The global R&D landscape has transformed significantly over the last decade, with organisations outsourcing research activities traditionally performed in-house. Initially, cost advantage was the primary reason behind outsourcing decisions; at present, factors such as access to specialised knowledge and technologies, faster innovation, and increasing pressure of regulatory compliance, along with cost efficiency, are driving organisations to outsource their R&D functions to a specialist.

With fast-evolving medical needs, impending patent cliffs, shrinking pipelines, pharmaceutical companies today increasingly invest in scientific innovation. Worldwide pharmaceutical R&D spend totalled USD 165 Bn in 2017 and is forecast to grow at a CAGR of 3.1% between 2017-24 to reach USD 204 Bn at the end of the period (Source: World Preview 2018, Outlook to 2024 by Evaluate). At the same time, pharmaceutical companies are facing the challenges of diminishing return on R&D investments and greater complexity in drug discovery. To increase the success rate of scientific programmes and decrease costs, these companies seek to outsource all or part of their R&D activities to specialists.

The rapid growth of virtual biotech companies has also increased the demand for contract services as these companies find it challenging to set up the required capabilities in-house or cannot afford it on a full-time basis.

The robust demand for research services across both small and large molecules offers considerable market opportunity for CROs. As per the Grand View Research Report, the global healthcare CRO market was valued at USD 32.9 Bn in 2017 and is expected to reach USD 54.6 Bn by 2025, growing at a CAGR of 6.66% between 2018 and 2025.

Pharmaceutical companies are also outsourcing API and dose manufacturing - both clinical and commercial supplies. The outsourcing model is preferred due to access to qualified manpower and technology. The services of Contract Manufacturing Organisations (CMOs) are especially favoured for biologics (also called large molecule drugs). The global CMO market is projected to grow at a CAGR of 7.5% between the period 2018-25 to reach an expected value of USD 21.7 Bn by 2025 (Source: Grand View Research Report).