The global drug discovery outsourcing market size was valued at USD 3,295 million in 2021 and is estimated to reach an expected value of USD 6370 million by 2030 at a CAGR of 7.6% over the forecast period (2022-2030). In several pharmaceuticals, pharmacology, and biotechnology areas, new drugs or medicines are discovered through the outsourcing of drug discovery. Additionally, the process of developing drugs begins with outsourcing drug discovery. One of the most significant factors propelling the global demand for the expansion of the drug discovery outsourcing market is the rise in collaboration trends in research on new drugs. In addition, the forecasted market growth would be influenced by factors such as the increased prevalence of genetic, metabolic, and other chronic disorders, technological developments, and medication discovery and research. Additionally, a rise in the use of artificial intelligence (A.I.) in drug discovery, a change in patent biologics, the expiration of patents, and an unprecedented reduction in internal pharmaceutical company research and development budgets are all predicted to boost market growth.
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Increasing Number of Partnerships in Drug Discovery Research
The market for outsourcing drug discovery is anticipated to grow due to businesses collaborating more and utilizing expertise. Organizations are establishing new strategic collaborations with numerous academic institutions, venture capitalists for funding, and other private or public enterprises to use any proprietary technology, chemicals, and more. Growing partnerships between public and commercial organizations speed up drug discovery, boosting global demand for drug discovery outsourcing.
In 2015, AstraZeneca announced four collaborations with Wellcome Trust Sanger Institute, Broad Institute/Whitehead Institute, Thermo Fisher Scientific, and Innovative Genomics Initiatives (IGI), intending to utilize CRISPER, a genome-editing tool in recombinant cell lines to recognize and authenticate new drug targets relevant to cancer, inflammatory, cardiovascular, metabolic, autoimmune, and respiratory diseases.
In June 2017, Eisai extended its partnership with Charles River Laboratories International, Inc., an early-stage CRO, to discover novel treatments for neurological and tropical diseases. Thus, these collaborations increase the need for identifying better drug candidates, which are expected to propel market growth.
Technological Advancements in Drug Discovery
Companies currently depend on technologies such as proteomics, High-Throughput Screening (HTS), assays, and genomics to discover targets of interest. These technologies and related products help accelerate the drug discovery process and provide easier means to determine the right and potential targets or hits collections, simplify validation, and aid in developing high-end development processes.
Advancements in mass spectrometers, chromatographs, electrophoresis systems, microscopes, image recognition, particle characterization, and other tools & instruments have led to progress in drug discovery technologies. Recently, DiscoveRx, a provider of assays kits, profiling, and screening services in the field of drug discovery, launched its advanced SAFTEY scan assays under in vitro pharmacological profiling services, which is a human orthologue and provides data for surface receptors to assess the specificity of lead compounds in the early stage of drug discovery and development. This technology enables researchers to identify potential undesirable off-target activities before expensive studies or clinical trials. Hence, Technological advancements in the field of drug discovery are the driving force for the growth of the drug discovery outsourcing market.
Presence of Open-Source Software Packages for Drug Discovery
Drug discovery is a time-consuming and costly process. The use of in silico computational chemistry and molecular modeling for computer-aided drug design has gained significant momentum; hence, these are being used on a large scale to discover novel compounds. Although open-source software facilitates increased flexibility and low costs, this software poses a significant threat to revenue generation. These platforms limit the adoption of licensed versions and software, thus impeding the market growth. Open-source vendors consider licensing the beginning of long-term relationships in which parties work together to increase product effectiveness and enable customer success.
In contrast, proprietary vendors consider licensing as a long-term liability. Moreover, a lack of communication or collaboration between customers and proprietary vendors can be attributed to the slow market growth through a reduction in support costs. The impact of this restraint is anticipated to reduce with time as software vendors are expected to become more user-friendly by adopting open-source licensing to gain market share.
Rising Incidence Rate of Metabolic, Genetic, and Other Chronic Diseases
Currently, many people are suffering from diseases such as diabetes, cancer, malaria, cardiovascular, cystic fibrosis, multiple sclerosis, and many other disorders, which increases the need for advanced medicines for treatment. According to data by Cancer Research U.K., around 163,444 cancer deaths were reported in 2014, and 356,860 new cancer cases were registered in the same year, which means about 980 patients are diagnosed every day. In addition, it is estimated that 23.6 million new cancer cases will be reported worldwide each year by 2030. According to data by WHO, worldwide cancer is a leading cause of death and accounted for around 8.8 million lives in 2015. Besides cancer, one of the significant disorders is cardiovascular, accounting for 17.7 million deaths in 2015.
According to WHO, 10.4 million people suffered from tuberculosis, accounting for 1.4 million deaths. The number of patients with diabetes is estimated to increase to 300 million by 2025 owing to improper diet, obesity, an aging population, and an inactive lifestyle. About 212 million malaria cases were reported worldwide in 2015, representing an incidence rate of 94 per 1,000 persons. The rise in the number of people with chronic diseases and the rising mortality rate are anticipated to drive organizations to concentrate on the development of novel molecules in search of alternative treatments for a cure, thereby driving the growth of the drug discovery outsourcing market.
The global drug discovery outsourcing market is segmented by workflow, Therapeutics Area, drug type, and region.
By workflow, the global market is bifurcated into target identification & screening, target validation & functional informatics, lead identification & candidate optimization, preclinical development, and another associated workflow. Lead identification & candidate optimization dominated the market and is anticipated to register a CAGR of 7.7% during the forecast period. This step of drug development involves the Quantitative Structure-Activity Relationship (QSAR) and structure-based optimization of the generated lead compound. It also requires the optimization of drug candidates before human dose preparation. The presence of multiple tools for predicting drug safety using in silico techniques results in a larger share of the segment in drug development informatics. Massive investment by key pharma companies for drug discovery is anticipated to boost the revenue generation of this segment.
By therapeutics area, the global market is segmented into the respiratory system, pain, and anesthesia, oncology, ophthalmology, hematology, endocrine, gastrointestinal, immunomodulation, anti-infective, cardiovascular, central nervous system, dermatology, genitourinary system. The respiratory system dominated the market and is estimated to register a CAGR of 6.9% during the forecast period. An increase in the incidence of major respiratory disorders such as lung cancer, bronchitis, tuberculosis, Chronic Obstructive Pulmonary Diseases (COPD), and asthma boosts the drug discovery outsourcing market to develop new therapies to combat such diseases. According to WHO, more than 3 million people suffered from COPD in 2015, and 1.8 million died due to the disease. Globally, in 2015, an estimated 480,000 people developed Multidrug-Resistant TB (MDR-TB), which prompted companies to discover and develop potential drugs. Private players are continuously working on evolving new medicines for respiratory system disorders. For instance, in 2012, Evotech and I.R. pharma collaborated on respiratory drug discovery. Similarly, in 2014, AstraZeneca and Charles River Laboratories developed a new respiratory drug candidate to move into preclinical development. Such initiatives for discovering novel drugs for respiratory system disorders aids revenue generation.
By drug type, the global market is segmented into small and large molecules (biopharmaceuticals). The small molecule segment dominated the market and is estimated to register a CAGR of 6.9% during the forecast period. Small molecule synthesis is a viable drug discovery and development pathway for novel and generic products. Small molecules differ from other drug compounds, such as proteins and biologics. Small molecules developed for oncology therapies penetrate the cell wall and target the cell. Small molecules are thus used in cytotoxic chemotherapy to exploit the generic vulnerabilities of a tumor. Most of the new drugs in the market are based on this capability of small molecules. Such applications drive segment growth.
By region, the global drug discovery outsourcing market is bifurcated into North America, Asia Pacific, Europe, Latin America, Middle East & Africa.
Regional Growth Insights Request Sample Pages
North America dominated the market and is estimated to register a CAGR of 6.8% during the forecast period. The U.S. is among the critical needs in the international pharmaceutical industry and is responsible for around 80% of global pharmaceutical sales. Significant factors such as developed infrastructure, increase in R&D investment, and rise in the incidence of various diseases are driving the growth of the drug discovery outsourcing market in the U.S. In addition, public-private partnerships formed to develop novel drug molecules are expected to impact the market growth in this region dramatically. Furthermore, the U.S. pharmaceutical industry has generated more novel drug substances than its European and Japanese counterparts every five years since 1965. A significant factor that makes the U.S. attractive for pharmaceutical R&D investment is that companies are relatively free in pricing their drugs. This helps them recoup their R&D investment and thus encourages further productivity.
Europe is the second largest region. It is estimated to reach an expected USD 17 million by 2030 at a CAGR of 7.1%. Various research initiatives of the U.K. government in alliance with many private firms are expected to increase the potential of the U.K. drug discovery outsourcing market. The European Lead Factory, a collaborative public-private partnership launched a platform for discovering high-quality drug molecules that were previously inaccessible. Seven top-notch firms, such as AstraZeneca; Bayer Pharma; Merck KGaA; Lundbeck; UCB Pharma; Janssen Pharmaceuticals; and Sanofi, came together to give the European research community access to their guarded compound libraries. Screening centers in U.K. and Netherlands use high throughput screening techniques to screen around 50,000 vital compounds. Research councils in the U.K. invest in advancing healthcare research, which is anticipated to have a positive effect on the market expansion of this nation.
Third in size, is the Asia-Pacific region. Over the projected period, the drug discovery outsourcing market in Asia Pacific is estimated to develop at the quickest rate. Since most patients in this region pay for their medications out of pocket, the developing economies of Asian nations play a significant role in expanding this market. The Asian drug discovery outsourcing market is also expected to increase because of ongoing drug discovery research, public-private partnerships, and government initiatives.
Major global drug discovery outsourcing companies are Curia, EVOTEC, Laboratory Corporation of America Holdings, GenScript, Pharmaceutical Product Development, LLC, Charles River Laboratories, Thermo Fischer Scientific, Inc., Merck & Co., Inc., Oncodesign, Jubilant Biosys., Qiagen and Discover Corporation.