The "Pharmaceutical Outsourcing Service" (CXO) industry has been popular in the pharmaceutical field for decades and has become an indispensable part of new drug research and development to achieve landing. The CXO industry includes CRO/CMO/CDMO, where CRO can be divided into two categories: preclinical CRO and clinical CRO.
In 2020, the global outbreak of the new crown epidemic disrupted the business activities of almost all enterprises, and the drug research and development and production of pharmaceutical companies were no exception. As a CRO/CDMO company serving pharmaceutical companies, its market share and global ranking have also changed in the context of the chaotic global market order.
Ranking Company Revenue 2020 Vs 2019 Global Employees 2020
1. LabCorp $13.98 billion 21.00% 75000
2. IQVIA 11.36 billion US dollars 2.40% 70000
3. ICON+PRA 5.98 billion US dollars 1.90% 35000
4. Lonza 4.95 billion US dollars 12.50% 14000
5, PPD 4.68 billion US dollars 16.10% 26000
6. Syneos $4.42 billion -5.60% 25000
7. Wuxi 3.26 billion US dollars 31.40% 32000
8, Catalent (Catalent) 3.09 billion US dollars 22.90% 15000
9, Charles River billion DOLLARs 29.2 11.50% 17000
10. Paraxel $2.50 billion / 19,000
The list covers CRO in a broad sense, with business areas including preclinical research, clinical trials, drug development, and original drug commissioning (CDMO and CMO) related to new drug development. Judging from the above rankings, the world's top two CRO companies have more than $10 billion in revenue, and there is a huge gap with the companies behind, and the dominance is unbreakable. Icon's acquisition of PRA became an industry event, greatly improving the new company's business scale ranking and leaping to the third place in the world. "WuXi App" (WuXi AppTec + WuXi Biologics) is a Chinese company on the list, with a revenue growth rate of more than 30%, and the ranking is also steadily rising, mainly because under the new crown pneumonia epidemic, China took the lead in restoring economic production order, and a large number of orders were transferred to China.
The following "Pharmaceutical Health News" introduces the world's top ten CRO companies.
1、 LabCorp
LabCorp's main business is clinical diagnostics. After acquiring Covance and Chiltern, it entered the field of drug research and development, including preclinical research and clinical research. After these two major mergers and acquisitions, the company has become the world's largest CRO. In 2020, the company's revenue was close to $14 billion, up 21% from the previous year. Affected by the new crown virus epidemic, most industries and enterprises around the world are facing different degrees of impact, but this is very beneficial to the company's diagnostic business. The new coronavirus testing business contributed 24.1% to the 2020 annual results. The company has a large and complete laboratory system not only in North America, but also around the world.
2. IQVIA
Since entering Greater China in 1997, Ai Kunwei has set up a head office in Shanghai, branches in Beijing and Guangzhou, and companies in Dalian, Hong Kong and Taiwan, thus providing services for major populations and research centers. Iqvia's predecessor was actually 2 companies, one was IMS (AMYS) and the other was Quintiles (Quintiles), the former mainly engaged in consulting business, the latter mainly engaged in CRO business. The two companies merged in 2016 and officially changed their names in 2017 to the now-famous ACKUNWEI. In 2020, the company's revenue was $11.36 billion, which was not ideal growth, mainly due to the impact of clinical research on the novel coronavirus, especially in North America.
3、ICON+PRA
In February 2021, international CRO giant ICON announced that it would acquire another head CRO company, PRA Health Sciences, through a total of about $12 billion in cash and stock transactions, and the combined company will become the world's third largest pharmaceutical CRO and the second largest clinical CRO. Upon completion of the transaction, PRA shareholders will hold approximately 34% of the combined company and ICON shareholders will hold approximately 66% of the shares. PRA revenue in 2020 was $3.183 billion, up 3.8% from the previous year, while ICON's revenue in 2020 was $2.797 billion, down 0.3% from the previous year. The deal will be highly value-added, achieving double-digit appreciation in the first full year and growing to more than 20% driven by growth momentum, with an estimated annual operating rate cost synergy of $150 million.
4. Lonza
Lonza is undoubtedly the world's largest CDMO company, a century-old multinational company founded in Basel, Switzerland, in 1897. In the first half of 2021, the company generated sales of CHF 2.5 billion and profit before interest, tax, depreciation and amortization (EBITDA) of CHF 847 million in its core business. Lonza shares are listed on the SIX Swiss Exchange and the Swiss Market Index, respectively, and are also secondarily listed on the Singapore Exchange. Lonza entered the Chinese market in 1995 and has set up production bases and offices in Guangzhou, Suzhou, Shanghai and other places.
Lonza Group operates two major businesses, of which Lonza Special Ingredients (LSI), which focuses on microbial control of personal care products, is relatively small within the group. The Pharmaceutical & Biotechnology & Nutrition business (LPBN) is Lonza's main source of revenue, ranging from early discovery and custom development to the production of active pharmaceutical ingredients and innovative dosage forms, the industry-known CDMO business. In 2020, Lonza supported more than 820 preclinical and clinical small molecules/macromolecular drugs, as well as 245 commercialization phases of small molecules/macromolecular drugs, producing up to 230 billion capsules. In addition, Lonza uses global capacity to provide a full range of development and production services for Moderna's COVID-19 mRNA vaccine, which is expected to reach an annual capacity of 1 billion doses.
5、PPD
PPD was founded in 1985 by Dr. Fred Eshelman and first went public in 1996. In 2011, the company went private through a $3.9 billion acquisition. In 2008, PPD signed an exclusive agreement with Peking Union Bank Biomedical Technology Development Co., Ltd. to expand its global central laboratory services to the Chinese market. PPD is able to begin providing a comprehensive range of tailor-made central laboratory services to Chinese biopharmaceutical customers. In November 2009, PPD acquired Bioduro Technology Co., Ltd., whose business scope includes medicinal chemistry, pharmaceutical biology, pharmacology, pharmacokinetics (DMPK) and drug safety evaluation. PPD thus completed the integration of clinical research business in China, which can also be understood as announcing the completion of the construction of the whole industry chain CRO business in China. PPD said that the focus of future business development will be on phase II and III clinical trials. For clinical research, China is a very important, rapidly developing and promising region, ppD's goal is to become the preferred CRO company for customers in the Chinese market.
6、Syneos Health
In 2017, INC Research and Inventiv Health merged to form Syneos Health. In 2020, the company's revenue was $4.42 billion. It is the only company on the list to experience negative growth due to the covid-19 pandemic.
7. WuXi Biologics (WuXi AppTec + WuXi Biology)
The article "Counting 10 Local CDMO Leaders in China" has shown that the CDMO business is only part of WuXi AppTec's global business, while wuXi Biologics' main business is CDMO and is in the rising period. WuXi's consolidated revenue in 2020 was approximately US$3.26 billion, an increase of 31.4% over 2019. The number of employees reached 32,000. This series of excellent data also makes WuXi the only Chinese local enterprise on the list. And how is China's local CDMO industry developing? What are the leaders? Please click here for details.
8. Catalent
Contel is a NEW YORK-listed CDMO company. In 2020, in terms of revenue, Catalent ranked among the top three in the global CDMO industry. In March 2013, Catalent established the world's eighth and first clinical supply center in China, and named its Chinese company "Catalent". Catalent's global clinical supply network covers North America, Europe and Asia (Japan, Singapore and other places), and the establishment of the eighth clinical supply center in China not only means the upgrading and expansion of Catalent's global clinical supply network, but also means that China has become an important node of the global clinical supply network. The official launch of this world-leading "end-to-end" clinical supply service in China has also accelerated the service process in the Asia-Pacific region and strengthened cold chain systems and specialty supply management capabilities. In 2019, Contel set up the Contelent Tangzhen Clinical Supply Center in Shanghai. This is the second clinical supply center in China.
In addition, the COVID-19 vaccine developed by Johnson & Johnson is produced by Contel.
9、Charles River
Charles River was founded in 1947 and is listed on the New York Stock Exchange. The company's business has three main segments: Research Models and Services (RMS), Discovery and Security Assessment (DSA), and Manufacturing Support. In short, they are animal models, safety assessments and production. In Beijing, Charles River established a joint venture in China, Viton Lihua, and now Witong Lihua has changed from a single animal model supplier to a diversified service platform covering animal model preparation, seed preservation and breeding, animal testing, etc.
10、Parexel
In 2017, Parexel was delisted after being acquired by a private equity group for $5 billion. Since then, the company's results have not been announced. In July 2021, the private equity businesses of established private equity giant EQT IX Fund and Goldman Sachs Asset Management (GS) agreed to acquire Parexel from Pamplona Capital Management, with a corporate value of $8.5 billion, and Parexel was again changed hands. Parexel is characterized by the ability to produce registration filing documents and communicate with the pharmaceutical administration department, and the company has established a strong registration filing team, including more than 100 reviewers who have worked in the national pharmaceutical administration department of the mainstream pharmaceutical market.
Specifically segmented into the CDMO industry, according to Grand View Research, the CDMO market will grow from $98.7 billion in 2018 to $157.7 billion in 2025. The CDMO industry in Europe and the United States started early, and the layout of technology, services and globalization is more mature, but its high cost of human resources and raw materials contradicts the demand for cost savings when pharmaceutical companies choose production outsourcing services. The Asia-Pacific region, particularly China and India, has been a major growth market for the CDMO industry. This is "due to the fact that manufacturing costs are much lower than in North America and Europe, as well as favorable regulations." "While China and India have become major suppliers of API manufacturing services, Europe and the United States remain major hubs for pharmaceutical development outsourcing, occupying most of the global market.
The industry media drug finance circle rated the top ten global CDMO enterprise revenue in 2021.
Ranking Pharmaceutical companies Revenue growth year-on-year country
1. Lonza $4.810 billion 12.5% Switzerland
2. WuXi App 3.389 billion US dollars 31.78% China
3, Catalent (3.094 billion US dollars) 22.9% of the United States
4. FAREVA SA $2.137 billion – France
5, Reciphaim AB 1.303 billion US dollars 30% Sweden
6, Samsung Biologics 1.034 billion US dollars 14.50% South Korea
7. Delpharm $9.45 — France
8, Siegfried 913 million US dollars 1.40% Switzerland
9. Boehringer Ingelheim (BI) $905 million 5.6% Germany
10, Aenova Group 857 million US dollars 0.55% Germany
Among them, Catalent, FAREVASA, Delpharm, and Aenova are 19 years of data, and BI is only a CDMO business; Patheon has no latest data
The following are some of the multinational companies that account for a high share of the global market in the CDMO industry.
1. FAREVA SA, a global, independent and family-owned group founded by Bernard Fraisse in 1990. Turnover in 2019 was 1.81 billion euros, with 12,000 employees at 39 production sites. FAREVA's latest strategy, investing in major areas in the oncology sector, to develop and manufacture oncology products.
2. Reciphaim AB, Sweden-based Recipharm acquired Consort Medical for about $700 million in 2020. In 2021, it will rank among the top five CDMO in the world with revenue of $13. The company's customer base accounts for large pharmaceutical companies (42%), specialty and generic companies (25%) and small and medium-sized pharmaceutical companies (15%).
3. Samsung Biologics, Samsung Group announced investment plans in the biomedical field in 2021. Among them, the CDMO field aims to become a global biopharmaceutical production hub by building the fifth and sixth plants. In addition to biomedical products, we will also focus on CDMO, a new-age therapeutic drug such as vaccines and cell genetic therapeutics. At the end of 2021, South Korea approved the OEM production of Samsung Biologics for the production of the Modena COVID-19 vaccine.
Siegfried, another Swiss company, Siegfreid, ranked eighth. The company has production facilities in Switzerland, the Usa, Malta, China, Germany, France and Spain, employing approximately 3,500 people. The company's services range from API development to product development, registration and manufacturing to packaging and logistics. In recent years, the company has been focusing on the merger and acquisition of related industrial chain companies to strengthen the company's strength.
5. Boehringer Ingelheim (BI), Boehringer Ingelheim was founded in 1885 and belongs to the family business. CDMO is one of Boehringer Ingelheim's three pillars of business and one of the main directions for future companies to invest in China. Boehringer Ingelheim's unique CDMO model transforms the original manufacturing "bottleneck" of the biomedical industry chain into a "service platform", drug research and development enterprises only need to focus on the development of innovative drugs themselves, while CDMO providers focus on commercial production to help R&D enterprises realize the industrialization of new drugs under development. 60% of the world's top 20 pharmaceutical companies and innovative biotechnology companies are customers of Boehringer Ingelheim's CDMO business.
2021 has been a year of active M&A deals in the CMO/CDMO industry, with several large acquisitions already announced, as well as small acquisitions of CDMO or production facilities by several companies. Among them, Thermo Fisher completed the acquisition of PPD and Danaher completed the acquisition of Aldevron, which became the focus of the industry.
Thermo Fisher Scientific, a leader in scientific services, has completed the acquisition of CRO (Serving Global Contract Research Organization) company PPD for $17.4 billion in cash and assumed approximately $3.5 billion in net debt, a transaction worth a total of approximately $20.9 billion. PPD is committed to providing clinical development and laboratory services to the pharmaceutical industry, biotechnology, medical devices and government agencies. In addition, Thermo Fisher & Scientific acquired Novasep's viral vector manufacturing business in Belgium, Henogen s.a., for approximately EUR 725 million (US$875 million), thereby increasing its contract for viral vector manufacturing services.
Danaher announced that it has completed its $9.6 billion cash acquisition of biotech company Aldevron. Aldevron will operate as an independent operating company and its brand will join the Danaher Life Sciences platform. Founded in the United States in 1998 by Michael Chambers and John Ballantyne, Aldevron serves biotechnology and pharmaceutical companies, producing high-quality plasmid DNA, mRNA, and recombinant proteins for research and development, clinical trials, and commercial applications.
The industry also saw a series of smaller M&A deals in 2021. Private equity firm EQT acquired Recipharm for $2.8 billion. Private equity firm Clayton, Dubilier & Rice acquired UDG Healthcare for about $3.7 billion. Charles River Laboratories acquired CDMO companies Vigene Biosciences and Cognate BioServices, a Maryland-based CDMO company specializing in viral vector research, for $1.2 billion. In addition, in March 2021, WuXi AppTec completed its acquisition of Oxgene. Oxgene is a contract provider of cell and gene therapy discovery and biomanufacturing services based in Oxford, UK.
In addition to enriching its business pipeline through the acquisition of industry chain related companies, Lonza sold its chemical ingredients business to Bain Capital and Cinven, two private equity firms, with a value of CHF 4.2 billion (US$4.5 billion) in order to focus on CDMO business, demonstrating its strategic focus on its core CDMO business. Lonza's CDMO business provides end-to-end development and manufacturing services for pharmaceuticals (small molecules, biologics, cell and gene therapies) and pharmaceutical products, primarily through its $5.5 billion acquisition of Capsugel's oral solid dosage products in 2017, as well as services for inhaled and non-enteric medicines.
The CDMO market is a highly fragmented, fully competitive industry. From the above analysis, it is not difficult to see that the world's leading CDMO companies mainly include Contellonte, Patheon, Lonza, BI, etc., with relatively concentrated resources, and still occupy an absolute leading position in the global pharmaceutical foundry market. In contrast, in the domestic market, the CDMO industry is in full swing with the participation of policy dividends, capital strength and other advantageous factors, and pays more attention to the direction of APIs in content services, and in terms of production capacity and competitiveness, in addition to WuXi Biologics, the scale of biological drug CDMO business capacity is still small, and there is still a big gap with overseas leading enterprises. In terms of profitability, the average gross profit margin of domestic CDMO leading enterprises is 40%, and the average gross profit margin of overseas head enterprises is only 29%, and high profits will be more conducive to the growth of local CDMO enterprises and enhance the strength to participate in global competition.