How can CDMOs keep pace with the innovative drug trend?

The global CDMO industry is currently entering a golden era driven by a new wave of pharmaceutical R&D. As technologies and industrialization continue to advance, innovative drugs are emerging at an accelerating pace—on average, one entirely disruptive biotechnology emerges every decade. In recent years—especially—demand for innovative therapies, including cell and gene therapies, has surged dramatically, expanding market size and attracting increasing numbers of entrants. In 2021, global funding for cell and gene therapies hit a record $2.31 billion. Concurrently, manufacturing demand for these innovative therapies has also grown sharply. To meet this rising demand, Lonza Group—the world’s top-revenue CDMO—has invested heavily in capacity expansion. In the first half of this year, Lonza invested CHF 500 million (approximately USD 517 million) in a new Swiss manufacturing facility, while also expanding its plants in China and the United States to boost production capacity for customers worldwide. Jean-Christophe Hyvert, President of Lonza’s Cell & Gene Therapy business, recently discussed several key trends shaping innovative drug development—and how CDMOs must adapt their processes to align with future directions—offering potentially transformative insights. Q: What is the most interesting trend in innovative drugs? A: A prominent trend is the growing number of bispecific antibodies (BsAbs) entering clinical trials. Since 2001, a total of 273 bispecific molecules have successfully entered clinical development. We anticipate that bispecific and other complex protein formats will dominate drug development pipelines over the next 5–10 years. Bispecific—and even multi-specific—therapeutics enhance treatment precision and flexibility—factors decisively influencing drug developers. Leveraging familiar dosing modalities, bispecific drugs offer therapeutic options for cancer patients poorly served by conventional therapies, thereby creating new treatment opportunities. We are also witnessing rapid progress in gene therapy, with several candidates approaching late-stage clinical development. Scalable manufacturing platforms will be critical to ensuring commercial supply of gene therapies. New vector types are emerging to improve organ tropism and reduce immunogenicity—and Lonza has actively participated in developing manufacturing platforms for these novel technologies. Another major trend is the exponential growth of mRNA-based development programs—a trajectory propelled by the clinical and commercial success of COVID-19 mRNA vaccines, which have validated mRNA’s tremendous future potential. Key advantages of mRNA-based compounds over alternative modalities include: lower drug doses required to elicit biological effects; the feasibility of establishing a single manufacturing platform for multiple distinct mRNA compounds; and mRNA’s ability—when delivered via suitable carriers such as lipid nanoparticles (LNPs)—to enter cells, a capability typically unattainable with protein-based therapeutics. This opens avenues to treat previously intractable diseases—for example, genetic disorders caused by intracellular protein deficiency. A recent trend involves using mRNA to encode Cas9 or other gene-editing enzymes. Co-administering such mRNA with guide RNA—both encapsulated in LNPs—creates a novel, better-tolerated pathway for both ex vivo and in vivo gene therapy, as demonstrated in the first clinical trial involving patients with transthyretin amyloidosis.

The Crossroads Facing CDMOs

CDMO stands for Contract Development and Manufacturing Organization—specialized service providers offering clinical-stage drug process development and manufacturing, as well as process optimization and large-scale production for marketed drugs, primarily to multinational pharmaceutical companies and biotech firms. Prior to the 1990s, independent CDMO companies were relatively scarce; instead, surplus capacity from pharmaceutical companies and fine chemical manufacturers largely fulfilled CMO functions. However, from the mid-to-late 1990s onward, as numerous blockbuster drugs held by large pharma companies lost patent protection, profitability plummeted, prompting widespread divestiture of manufacturing facilities to cut capital and personnel expenditures. CDMOs rapidly expanded through acquisitions of high-quality capacity. Simultaneously, innovative biotech firms matured and went public, embracing asset-light operational models that significantly increased demand for CDMO services—ushering in a golden decade for the overseas CDMO industry. In China, the CDMO industry did not begin its leap forward until after 2015. That year, the State Council issued a policy initiating pilot programs for the Marketing Authorization Holder (MAH) system, formally launched in 2016. Coupled with the China National Medical Products Administration’s (NMPA) clinical trial reform—which ignited investor enthusiasm for innovative drugs—China’s CDMO sector entered a period of rapid growth. The MAH system decoupled the previous mandatory linkage between R&D and manufacturing, thereby stimulating pharmaceutical R&D activity and strongly propelling the development of China’s CDMO industry. According to Frost & Sullivan’s report, ‘Current Status and Future Trends of the CDMO Market,’ China’s CDMO market size grew from RMB 13.2 billion in 2017 to RMB 47.3 billion in 2021, representing a compound annual growth rate (CAGR) of 37.7%. Stages of CDMO Industry Development Foreign enterprises have contributed substantially to China’s CDMO industry—not only advancing domestic regulatory policies but also introducing advanced corporate management practices, process development capabilities, and large-scale manufacturing expertise, while cultivating a large pool of industry talent. Lonza, referenced above, is an international enterprise with over 30 years of dedicated CDMO experience. It possesses extensive international expertise in development, manufacturing, regulatory registration, and supply chain management, backed by proven technical capabilities and a quality assurance system meeting stringent international standards. Lonza also holds abundant successful experience in regulatory submissions—including IND and BLA filings—for biologics in China, Europe, and the U.S. While generating profits in China, Lonza has simultaneously left behind advanced management philosophies, technical standards, and skilled professionals. Beyond Lonza, other foreign CDMOs—including Boehringer Ingelheim, Thermo Fisher Scientific, Merck KGaA (Germany), and Celltrion (South Korea)—have all implemented major strategic initiatives to enter the Chinese market. Yet circumstances have shifted: today, most of these foreign CDMOs have opted to scale back their China operations—largely due to strategic reassessments. This retreat is directly linked to the rise of domestic CDMOs, which have captured substantial market share. The Emergence of Domestic CDMOs: An Inevitable Historical Trend Policy-wise, a series of pharmaceutical industry policies and institutional reforms—including the MAH system, innovations in new drug review and approval procedures, volume-based procurement, and medical insurance negotiations—have collectively created a favorable environment for China’s CDMO industry.

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Lonza buys 5 sites from Germany's Merck to more than double US footprint

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