CPHI Research Forecasts Growth for Biotech, Pharma Markets in 2025

The 2024 CPHI Annual Report, a survey of more than 280 pharmaceutical industry executives from more than 40 countries, is forecasting an increase in biotech capital and fast-paced growth of outsourcing in 2025, according to a press release on Oct. 7, 2024 (1).

The outlook is especially rosy, CPHI said, for larger contract development and manufacturing organizations (CDMOs)—or those with certain assets or specialized technologies such as peptides and radiopharmaceuticals—that are based in the United States (1). The report found that biotech companies in Europe have so far had a strong year in 2024, to the extent that US investors are increasingly looking across the Atlantic, particularly at the United Kingdom, for sources of innovation.

“Overall cash runways are improving, alongside favorable economic conditions and interest rate cuts,” said report expert Brian Scanlan of Edgewater Capital, as quoted in the press release (1). “This, in turn, should prompt biotechs to return to more traditional spending patterns, with CRO [contract research organization]/CDMOs benefiting from increased confidence in the financial outlook over the next 12 months.”

Naturally, the release of the report coincides with the start of CPHI Milan 2024, ongoing from October 8 through 10.

“We are witnessing a record-breaking event this week, with unprecedented levels of partnering across the industry,” CPHI Milan Brand and Content Director Tara Dougal said in the release. “European biotech hubs are expanding rapidly and securing crucial funding, and CPHI Milan will play a key role in helping these groups connect with the right partners to advance their projects.”

Scanlan and Irena Maragkou of Global Data, Bikash Chatterjee of Pharmatech Associates, and Gil Roth of the Pharma & Biopharma Outsourcing Association participated in an expert panel on the first day of the conference, moderated by Dan Stanton of Informa Connect Life Sciences, discussing key findings from the report (1).

Despite the areas of strength the report identified, there are some challenges to growth being felt by other types of companies, namely smaller CDMOs and early-stage biotech companies (1). Also, after peaking in 2022 and 2023, the venture market in China is now in a decline phase according to the report, trending downward toward pre-pandemic levels from 2019.

CPHI Milan expects some 600 CDMOs to have representation on hand over the three-day event. But on a larger scale, many companies are competing for funding; the press release indicated that more than 6000 companies worldwide have R&D pipelines at the moment, but more than 50% of these only have one or two products in development, making them less attractive in the current competitive climate.

“The partnerships formed over the next three days will be crucial for the sector's growth in 2025,” Dougal said. “Across the show floor, we’re witnessing rising confidence levels, and the long-term outlook for the industry is incredibly strong.”

The full CPHI Annual Report for 2024 is available for download on the CPHI website here (2).

References

1. CPHI. CPHI Annual Report 2024–Part 4: Biotech Capital on the Rise and Outsourcing to Accelerate in 2025–But Uneven Growth for CDMOs. Press Release. Oct. 7, 2024.
2. CPHI. CPHI Annual Report 2024 (whitepaper). cphi-online.com, Oct. 4, 2024 (accessed Oct. 8, 2024).