Nucleic Acid Therapeutics CDMO Market

Market Overview

The global nucleic acid therapeutics CDMO market size was valued at USD 1,908.41 million in 2022. It is estimated to reach USD 4,917.52 million by 2031, growing at a CAGR of 11.09% during the forecast period (2023–2031).

A contract development and manufacturing organization or a CDMO is an organization that provides services ranging from drug development and manufacturing to pharmaceutical packaging that includes serialization and aggregation. Such organizations provide support services to several firms based on their or consumers' designs, formulas, and specifications. Therapeutic nucleic acid (TNA), a subset of nucleic acids that are closely related compounds used to treat disease, is one such class of nucleic acids, according to the National Centre for Biotechnology Information (NCBI). The basic idea behind employing nucleic acids in therapeutics—apart from gene therapy—is to limit DNA or RNA expression. This will stop the creation of abnormal proteins associated with a disease while leaving all other proteins unaltered. TNAs come in various forms, but they all have a similar mechanism of action mediated by Watson-Crick base pairing, which enables sequence-specific recognition of endogenous nucleic acids. TNA are high molecular weight, charged compounds with different physicochemical characteristics from small molecule medicines and unstable in a biological setting.

Highlights

• Custom nucleic acid dominates the product segment
• Column-based method dominates the technology segment
• Academic research institutes dominate the end-user segment
• North America is the highest shareholder in the global market

Market Dynamics

Market Drivers

Accelerating Shift of the Pharmaceutical Market Toward Innovative Biologic and Cell and Gene Therapy Products

Nucleic acid therapies are the basis for the finalized cell and gene therapies offered by pharmaceutical companies. The accelerated development of novel cell and gene therapies has seized the attention of major pharmaceutical companies and is further causing a shift in the traditional biopharmaceutical business model. Although the preliminary drug approvals have been for relatively small patient pools and rare diseases, a significant pipeline of cell and gene therapy analyses is underway that will significantly expand the impact of these treatments and unleash their true, unprecedented potential.

Furthermore, according to a report by Pharmaceutical Research and Manufacturers of America (PhRMA), in 2020, there was a total of 362 novel cell and gene therapies ranging from early to late stages of clinical trials that were focused on a variety of diseases and conditions from cancer to genetic disorders to neurologic conditions. Also, the companies are investing massively in forming alliances and acquiring firms offering cell and gene therapy products or finalized therapeutics, thereby driving market growth.

Reduction in Overall Manufacturing Cost at CDMOs

The Tufts Center for the Study of Drug Development estimates that the total cost of developing a new prescription drug that receives market approval will be USD 2.6 billion for the pharmaceutical industry. This huge amount is not affordable for several companies to invest in the respective technologies, workforce, and physical assets to assist the drug development journey. As pharmaceutical firms are reducing their operational expenditure and in-house manufacturing footprints, therapeutics many companies are divesting their non-core manufacturing facilities, often with CDMOs. Moreover, small biotechnology companies often rely on a CDMO to make their development products as they move across the pipeline. The expense of constructing these is excessive from a time and financial viewpoint for a company that relies on venture money and rarely has the technical know-how and manufacturing capability to do this independently. Such factors contribute to the market's growth.

Market Restraint

Lack of Expertise in Nucleic Acid Manufacturing

Manufacturing nucleic acid therapies demand expertise across various technologies, such as solid-phase synthesis and protecting group chemistry. Further, downstream technologies include purification by chromatography and isolation by ultra/diafiltration techniques, precipitation, and lyophilization, which is a cumbersome process. Moreover, companies involved in peptide synthesis have moved toward nucleic acid therapies to expand their capabilities. However, there are important differences between peptides and nucleic acid manufacturing.

The synthesis in flow-through columns consumes large volumes of solvents and reagents for which the facility infrastructure will be appropriately expanded. Furthermore, oligonucleotides are negatively charged and highly water-soluble, requiring the handling of aqueous solutions throughout the entire downstream process. Also, the oligonucleotide API, especially double-stranded entities, are considerably larger than peptides and pose challenges from an analytical point of view. Therefore, the factors above restrict the market growth during the forecast period.

Market Opportunities

Increasing Outsourcing Trend Among Pharmaceutical Companies

The increasing outsourcing trend among pharmaceutical companies poses a promising opportunity for CDMOs. As the pharma companies shift their focus toward scientific research and pharmaceutical marketing, the CDMOs establish themselves as vital partners, promoting strategic and integrated partnerships with their customers. Further, some corporations often lead to co-development as some pharma companies assist in financing specialized development and manufacturing facilities at the strategic CDMOs. Moreover, the CDMOs can also be standouts in keeping up with the advanced technology and specialized expertise.

Additionally, the growing number of small and medium-sized pharma companies responsible for the increase in drug approvals but often have no manufacturing capacities of their own may also increase the opportunity for CDMOs in the future. CDMOs can further focus on the smaller customers, understand their specific needs, and have a lucrative differentiation strategy. The current contested and fragmented market environment within the global market keeps the price down, and a more consolidated market is likely to offer a higher profitability market for the rest CDMOs.

Regional Analysis

North America Dominates the Global Market

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, and Rest-of-the-World.

North America is the most significant global nucleic acid therapeutics CDMO market shareholder and is estimated to exhibit a CAGR of 10.68% during the forecast period. The presence of prominent and established pharmaceutical players and rising demand for novel treatment options research, diagnostics, synthetic biology, growing prevalence of infectious diseases, genetic disorders, and chronic diseases are some of the factors responsible for the development of the North American nucleic acid therapeutics CDMO market. The region remains the primary hub of pharmaceutical development and outsourcing owing to the huge amount of funding and the country being a center of university-affiliated pharmaceutical research centers. Moreover, the favorable regulatory scenario and the better availability of logistics and quality have led to smooth market growth, allowing companies to expand progressively. In addition, the North American nucleic acid therapeutics CDMO market comprises the U.S. and Canadian markets. The U.S. region dominated the regional segment owing to the large number of market players already present in the country performing substantial investments.

Europe is predicted to exhibit a CAGR of 10.87% over the forecast period. The regional growth can be primarily attributed to the rising pharmaceutical R&D expenditure, increasing geriatric population coupled with growing disease prevalence, escalating healthcare expenditure, and the growing focus on eradicating rare diseases across the region. The availability of skilled personnel for advanced technologies in the implementation of oligonucleotide research will enhance the adoption rate of oligos in the region, thereby driving market growth. The European Society of Gene and Cell Therapy (ESGCT) promotes essential and clinical research in cell and gene therapy by encouraging training, trading data and innovation, and filling in as an expert guide to European partner networks and administrative bodies. However, the region also faces high competition from the Asian economies that offer cheap manufacturing materials as well as the cost of labor, which can restrict market growth in the future.

Asia-Pacific currently contributes a significant share of the global market. The Asia-Pacific market is expected to grow in the forthcoming period due to an increase in healthcare awareness, a steady economy leading to a higher focus on research, and the implementation of improved methods of diagnosis. Further, it has been observed that several new and advanced high-quality oligo libraries are being formulated to help enable researchers to utilize disease-specific DNA and RNA information to improvise therapeutic and diagnostic research in the Asia-Pacific region. The region is home to several countries employed in nucleotide therapeutics, such as China, Japan, India, and Australia, known as the hub for contract manufacturing and vehemently researching nucleic acid therapeutics.

The Rest-of-the-World accounts for a negligible share of the global market. However, the region is soon expected to be growing at a significant rate. The growth within the region is attributed to the increasing public-private partnerships to increase the accessibility of advanced healthcare facilities. Moreover, the increasing adoption of nucleic acid-based therapies in the region further promotes the research studies for such therapies and the investments to establish the CDMOs.

Segmental Analysis

The global nucleic acid therapeutics CDMO market is bifurcated into the product, chemical synthesis, technology, and end-user.

Based on product, the global market is divided into standard nucleic acid, micro-scale nucleic acid, large-scale nucleic acid, custom nucleic acid, modified nucleic acid, primers, probes, other NA, and other services.

The custom nucleic acid segment accounts for the largest market share and is expected to exhibit a CAGR of 11.04% over the forecast period. Custom nucleic acid is DNA and RNA sequences manufactured according to specific requirements. This segment's dominance is attributable to the growing demand for customized nucleic acid for variable therapies. Further, Merck KGaA, Danaher Corporation (Integrated DNA Technologies, Inc.), LGC Limited, TriLink Biotechnologies, and Kaneka Eurogentec S.A. offer custom nucleic acid services.

Based on chemical synthesis, the global market is bifurcated into solid-phase oligonucleotide synthesis (SPOS) and liquid-phase oligonucleotide synthesis (LPOS).

The solid-phase oligonucleotide synthesis (SPOS) segment dominates the global market and is projected to grow at a CAGR of 11.30% over the forecast period. Solid-phase synthesis is widely used for peptide, oligonucleotide, oligosaccharide, and combinatorial chemistry. The type of synthesis is carried out on a solid support that is held between the filters within the columns that allow the reagents and solvents to pass through freely. The classical form of solid chemical synthesis involves the usage of polymer or specialized glass beads that are not impacted by reaction conditions. Solid-phase synthesis is effective at quickly yielding purified products, as the impurities and unreacted materials are washed away in the various steps of the synthesis. Furthermore, the entire synthesis is amenable to computer control and automation. It is the most common method employed for custom peptide and oligonucleotide production.

Based on technology, the global market is bifurcated into column-based and microarray-based methods.

The column-based method segment owns the highest market share and is predicted to exhibit a CAGR of 11.23% over the forecast period. The column-based technology for oligonucleotide synthesis is a traditional synthesis mode carried out in separate columns using solid-phase phosphoramidite chemistry. In the respective technique, the reagents are pumped through the columns, allowing the iterative addition of nucleotides to be programmable on the controlled-porosity glass beads (CPG) matrix. The technique is used to synthesize one sequence per column. The capacity of the commercially available column-based oligo synthesizer is 96–768 oligonucleotides, each containing ten nmol to 2 μmol at the same time. In addition, several studies have utilized column-synthesized oligonucleotides as modules for DNA constructions by assembly methods. However, column-based oligonucleotide synthesis is often unable to meet the requirements of large-scale DNA synthesis in the generation of synthetic biology due to the restrictions of low throughput and high cost.

Based on end-user, the global market is divided into academic research institutes, diagnostic laboratories, and pharmaceutical companies.

The academic research institutes segment is the most significant contributor to the market and is predicted to exhibit a CAGR of 11.16% over the forecast period. Academic organizations contribute significantly to the market. Rising research activities worldwide have led to the development of novel methods for new chemistries accompanied by an expanding collection of nucleic acid agents. Moreover, market players increasingly focus on customer convenience and high-quality industrial-scale services for academic research institutions worldwide.

In emerging economies, the lack of infrastructure for conferring advanced genomics research is also a major concern. However, few academic institutions have made some impact on the advancement of research through their very own endeavors. With the growing impetus to overcome the shortage of genomic research, government, and private establishments are putting resources into advancing academic and research infrastructure in rising economies. As a result, academic institutes can advance in therapeutic research, including oligonucleotide therapeutics. This has led to a rise in nucleic acid research in academic organizations.

Recent Developments

• January 2023- Agilent Technologies Inc. announced it would invest approximately USD 725 million to double its production capacity of therapeutic nucleic acids in response to the USD 1 billion market's rapid growth and robust demand for the company's high-quality active pharmaceutical ingredients (API).

• February 2023- AcuraBio, a prominent Australian biopharmaceutical contract development and manufacturing organization (CDMO), will offer a cGMP plasmid DNA CDMO service utilizing Cytiva's newly developed process platform technology. Using Cytiva's latest bacterial plasmid two-step purification protocol, AcuraBio anticipates producing more plasmid DNA for its global clientele.