Small Molecule Drug Discovery Market

Market Overview

The global Small Molecule Drug Discovery Market Size had a revenue worth USD 47.31 billion in 2022. It is expected to reach USD 96.96 billion by 2031, expanding at a CAGR of 8.3% during the forecast period (2023-2031).

For almost a century, small-molecule medications have been the backbone of the pharmaceutical sector. Small molecule drugs, defined as any organic compound with a low molecular weight, have several distinct advantages as therapeutics: the majority can be taken orally and pass through cell membranes to target intracellular sites. Small-molecule medications are organic substances that influence molecular pathways by concentrating on crucial proteins. These substances easily enter cells thanks to their low molecular weight. Small-molecule drugs can be created using leads obtained from natural resources or from rational drug design. Low molecular weight chemically synthesized compounds are primarily referred to as small-molecule drugs.

While many developed compounds have a higher molecular weight than a typical small-molecule drug, which may have a molecular weight below 500 Da. The demand for small molecule drugs has increased due to their lower cost when compared to biological drugs. An increase in small molecule approvals by the FDA and other regulatory agencies and an increase in small molecule sales are additional significant factors contributing to the market's growth. In addition, rising pharmaceutical company collaborations with contract research organizations to conduct clinical trials, rising investments in R&D for drug development, and government programs to support the expansion of pharmaceutical firms in industrialized nations like the United States are the main drivers of the small molecule drug discovery market.

Market Dynamics

Market Drivers

The Growing Demand for the Product and Contract Organizations for Research & Development

Small-molecule drugs have been the foundation of the pharmaceutical industry for more than a century. Small molecule drugs, defined as any organic compound with a low molecular weight, have several therapeutic advantages. They can penetrate cell membranes and are typically taken orally to reach intracellular targets. Additionally, their distribution can be adjusted to allow for systemic exposure with or without brain penetration, and they can be designed to interact in different ways with biological targets.

The study "Biologics versus small molecules: Drug costs and patient access," published in "Medicine in Drug Discovery" in November 2021, found that small molecules are more economically viable than biologics. Compared to biologics, they are more patient-friendly and less expensive. More research must focus on less expensive alternatives like small molecule generics to improve patients' access to medications and new or improved medical technology. Consequently, it is anticipated that the growing demand for small molecules will propel market expansion. There is a high demand for new medications for the treatment of inflammatory bowel disease (IBD) with better efficacy and fewer side effects, according to research published in the "European Journal of Medicinal Chemistry" in October 2019 and titled "Discovery of Small-Molecular Candidates Against Inflammatory Bowel Disease." The small molecules drug discovery market is anticipated to grow due to the development of therapeutics for IBD using minor molecule candidates.

Additionally, to stay competitive, adaptable, and profitable in the face of adversity, pharmaceutical companies are increasingly outsourcing their research and development activities, including early-stage research programs, to third-party organizations like academic institutions, biotech startups, and private contract research organizations (CROs). Pharmaceutical companies have traditionally concentrated their efforts on China, the largest market in Asia and the location of the largest contract research organization in the world, according to the American Chemical Society in 2021. Since Indian CROs are affordable compound synthesizers and offer top-notch chemistry services, they are now expanding into India. The market for small molecules drug discovery is anticipated to grow due to expanding CRO networks for research & development activities.

Market Restraints

High Cost of Development

The total financed pre-launch research & development costs were calculated to range from USD 161 million to USD 4.54 billion in 2019, according to a study titled "How Much Does It Cost to Research and Develop a New Drug," published in Pharmacoeconomics Journal in August 2021. The highest therapeutic area-specific estimates were given to anticancer drugs, ranging from USD 944 million to USD 4.54 billion. Therefore, it is anticipated that the market's growth will be constrained by the higher drug development costs.

In addition, the European countries' median monthly costs for cancer medications with low scores on the ESMO Magnitude of Clinical Benefit Scale (ESMO-MCBS) ranged from USD 4,361 to USD 5,273, according to the European Society for Medical Oncology (ESMO) 2019 report. As a result, the rising burden of cancer drug costs is primarily a result of the expenses incurred by the companies while developing and researching cancer medications. This will likely further slow the market's growth.

Market Opportunities

Recent Developments in the Market

The cornerstone of medicine, small molecule drugs will make up over 90% of all approved drugs and 75% of all new drugs licensed in the US by 2020. They continue to make up the majority of prescriptions and are helpful for a variety of patients with non-genetic, widespread, and complex disorders. Because of their predictable properties, small molecules are more easily and affordably synthesized than biologics. Numerous protein targets can be treated with small molecules.

New technologies that combine enhanced protein dynamics and computational chemistry studies are driving massive data iterations to uncover binding pockets by shedding light on regions of the protein that were previously hidden from view by traditional approaches. With many small molecule drug products having shorter drug development times than biologics, quickly getting to the clinic and market is becoming more critical for small and emerging biotech and pharmaceutical companies. For the businesses that develop small-molecule drugs, this will open up more opportunities.

Regional Analysis

The region segmentation of the global small molecule drug discovery market includes North America, Europe, South America, Asia Pacific, and MEA.

North America and Europe will dominate the regional market

North America is expected to command the market while expanding at a CAGR of 8.41%. Rising rates of various chronic diseases, like cardiovascular disease, cancer, and others, and an increase in the acceptance of new small molecules in the area, are the main factors propelling the market's expansion. According to the FDA, the Center for Drug Evaluation and Research approved 48 new medications in 2019. Additionally, industry participants are utilizing cutting-edge technology tools to identify small-molecule drugs.

For instance, in November 2019, Genesis Therapeutics announced receiving USD 4.1 million in seed funding from Andreessen Horowitz. One of the top nations for developing new drugs is the United States. Pharmaceutical Research and Manufacturers of America members' businesses continue to lead the way. The Food and Drug Administration distributed six grants in 2020 to support new clinical studies and advance the creation of pharmaceuticals for treating rare diseases. Due to their widespread use in the drug discovery process, this increased interest in small molecule drug discovery. For instance, according to the "clinicaltrials.gov" website, 146,291 clinical trials were officially registered in the United States as of October 7, 2021. The increase in studies shows increased interest in finding new small-molecule drugs. This is anticipated to positively increase market demand.

Europe will likely hold USD 25,486 million by 2031, growing at a CAGR of 8.17%. The market in the region is being driven by growth factors like rising chronic disease incidences and rising product launches. Additionally, rising research & development spending and expanding drug development pipelines fuel market expansion. Additionally, the area observes high demand for developing small-molecule drugs. As a result, businesses are implementing growth strategies like alliances, purchases, mergers, etc., to increase their presence in this market.

For instance, a phase 1 clinical trial for a novel anticancer molecule was announced by the German biotechnology company Evotec in 2021. The candidate was developed in collaboration with Exscientia, an Oxford, UK-based business that uses artificial intelligence (AI) methods to find small-molecule drugs. As a result, small molecules are being used in an increasing number of cancer drug discoveries. As a result, the region's market for small-molecule drug discovery is anticipated to proliferate.

Segmental Analysis

The small molecule drug discovery market is classified based on the therapeutic area, process/phase, and region.

On the Basis of Therapeutic Area

Per the therapeutic area, the segments are Oncology, Central Nervous System, Cardiovascular, Respiratory, Metabolic Disorders, Gastrointestinal, and Other Therapeutic Areas.

The oncology section will advance at a CAGR of 8.92% and hold the largest revenue share. Cancer is when a few cells grow out of control and spread to other body regions. The oncology segment of the small molecule drug discovery market is expanding due to factors like the rising incidence of cancer, increased research and development, and the rising demand for effective and safe medications. The number of ongoing research and development projects worldwide also accelerates the market's expansion. Globally, there were approximately 19,292,789 cases of cancer among both sexes and people of all ages in 2020, according to data from the Global Cancer Observatory (Globocan), and the number was predicted to rise to 28,887,940 by the year 2040. The need for cancer treatment is being created by the burden of disease, fuelling the expansion of the oncology market for small molecule drug discovery.

The central nervous system section will hold the second-largest share. Parkinson's disease, Alzheimer's disease, multiple sclerosis, spinal muscular atrophy, Duchenne muscular dystrophy, tuberous sclerosis complex, Dravet syndrome, migraine headaches, neuromyelitis optica spectrum disorder, etc. are among the conditions linked to the central nervous system. The market segment is expanding due to factors such as the growing importance of research and development among industry participants and governmental authorities, the rising burden of neurological diseases, etc. The prevalence of various neurological diseases is rising significantly globally, which increases the demand for effective treatment drugs and, in turn, accelerates the market's expansion.

On the Basis of Process/Phase

Per the process/phase, the segments are Target ID/Validation, Hit Generation & Selection, Lead Identification, and Lead Optimization.

The lead optimization section will advance at a CAGR of 8.11% and hold the largest revenue share. A drug candidate is created using the lead optimization process after identifying a primary lead compound. An iterative process of synthesis and characterization is used to build a picture of the relationship between a potential drug's chemical structure and activity in terms of interactions with targets and metabolism. Through a focused screening funnel that includes both in vitro and in vivo experiments, this stage seeks to optimize the lead series' biological activity and characteristics simultaneously. The physicochemical properties of screening assays are also evaluated to determine the best compound to be dosed and formulated.

The lead identification section will hold the second-largest share. Before identifying potential targets, drug discoveries first identify the genetic and cellular components of the disease. Tests are carried out in vivo (animal models) and in vitro (isolated cells) to confirm that the biological target is connected to the disease. To identify lead compounds, the results of the target validation and hit generation stage can be helpful. Lead chemicals exhibit desired biological or pharmacological activity and may serve as the starting point for creating a brand-new clinically relevant compound.

Recent Developments

• In 2022, Imfinzi from AstraZeneca has been recommended for marketing authorization in the European Union (EU) for the first-line chemotherapy-plus-imfinzi treatment of adult patients with metastatic or unresectable biliary tract cancer (BTC).