Drug Discovery Outsourcing Services Market - By Service Type (Chemistry, Biological), Dug Type (Small & Large-molecule), Disease Model (In-vitro, Cellular & Animal Models), Therapeutic Area (Diabetes, Neurology, Oncology), Global Forecast (2023 – 2032)

Drug Discovery Outsourcing Services Market - By Service Type (Chemistry, Biological), Dug Type (Small & Large-molecule), Disease Model (In-vitro, Cellular & Animal Models), Therapeutic Area (Diabetes, Neurology, Oncology), Global Forecast (2023 – 2032)

Drug Discovery Outsourcing Services Market Size

Drug Discovery Outsourcing Services Market size accounted for USD 4.4 billion in 2022 and is estimated to grow at 8.2% to reach USD 9.6 billion by 2032. The market is witnessing a rising demand for drug discovery outsourcing services owing to increasing focus on specialized areas such as rare diseases, precision medicine, and niche therapeutic areas to develop effective drugs.
 

Also, complexity associated with drug research and development, with intricate biological targets and technologies necessitates the access to specialized expertise. Furthermore, outsourcing enables companies to access specialized expertise, advanced technologies, and state-of-the-art facilities, reducing the time and costs associated with in-house drug development and novel drug therapies. Additionally, the growing pipeline of biologic drugs, particularly in the fields of oncology, autoimmune disorders, and infectious diseases, has created a robust demand for drug discovery outsourcing services.
 

Drug discovery outsourcing services refer to the strategic practice of pharmaceutical companies enlisting external specialized partners to handle various stages of the drug development process. The services encompass a wide range of specialized expertise and resources, including medicinal chemistry, biology, pharmacology, toxicology, drug metabolism and pharmacokinetics (DMPK), and clinical trial management. By outsourcing these services, organizations can leverage the knowledge, experience, and infrastructure of external experts to accelerate drug discovery, optimize resources, access advanced technologies, and enhance research capabilities.
 

COVID-19 Impact

The COVID-19 pandemic had a drastic impact on the overall economy with several sectors witnessing a significant slump during 2020. The healthcare sector was one of the most severely impacted sectors during the pandemic owing to tremendous pressure on the healthcare systems to contain the spread of infection. During the initial phase of the pandemic, slight slowdown was observed in some non-COVID-19-related drug discovery and research activities. Several companies were noted to revise their R&D spending for clinical trials in comparison to earlier spending.
 

However, rapid recovery was observed due to the growing urge for the development of vaccine and effective drugs for the treatment of COVID-19. Furthermore, significant surge was noted in R&D invest by pharmaceutical and biotechnology company for developing infectious diseases drugs and vaccines. Also, several pharmaceutical and biotechnology companies collaborated with CROs and CDMOs to accelerate drug discovery and development process and navigate complex regulatory pathway more effectively.
 

Drug Discovery Outsourcing Services Market Trends

The worldwide burden of chronic diseases is increasing rapidly. Chronic diseases including oncology, diabetes, neurological disorders, chronic kidney diseases (CKD), chronic respiratory diseases (CRD), and cardiac stroke are the primary causes of disability and mortality around the world.
 

Cardiovascular diseases hold for over half of total chronic disease deaths, whereas diabetes and obesity are witnessing a significant increase owing to their earlier onset and widespread prevalence. As a result, there is a significant demand for the novel drugs and therapies to control and treat chronic diseases that in turn has propelled the growth for the drug discovery outsourcing services across the globe.
 

Drug Discovery Outsourcing Services Market Restraint

One of the prominent challenges faced while outsourcing drug discovery services is the concern surrounding intellectual property rights. As most of the drug candidates or medical devices involved in drug discovery are patented products, technology transfer at several points between the sponsor and CRO increases the chances of data leak and can potentially restrain the market growth. While outsourcing offers various advantages, the sharing of proprietary information and data with external partners can potentially compromise a pharmaceutical company's valuable research insights and innovations. This poses a dilemma, as safeguarding intellectual property is paramount to preserving competitive advantages and future commercial prospects.
 

Concerns may arise over issues such as data ownership, patent rights, and the potential for unintended leakage of sensitive information. These uncertainties can deter companies from fully embracing outsourcing partnerships, as the protection of intellectual property remains a critical priority. Thus, significant risks associated with outsourcing drug discovery services may to hamper the market trends.
 

Drug Discovery Outsourcing Service Market Analysis

By service type, the drug discovery outsourcing services market is classified into chemistry services and biological services. The biological services segment is anticipated to show significant growth of 9.7% during the analysis timeframe. Biological services encompass a range of specialized offerings that involve the study and manipulation of biological systems, such as cells, tissues, and biomolecules, to facilitate the identification and development of potential therapeutic compounds. Biological services play a pivotal role in assessing the interactions between complex potential drug candidates and living organisms at the cellular and molecular level.
 

Biological services encompass cell-based assays, tissue culture, molecular biology techniques, biomarker analysis, pharmacogenomics, and toxicology studies. These services are vital for assessing the effects of drug candidates on biological systems, evaluating their safety, efficacy, and understanding their mechanisms of action, thereby fostering market expansion.
 

Based on drug type, the drug discovery outsourcing services market is segmented into small-molecule and large-molecule. The large-molecule drugs segment held a business share of 17.2% in 2022 and is anticipated to grow at a CAGR of 9.2% from 2023 – 2032. Large-molecule drug discovery services encompass a range of specialized expertise, including advanced biologics research, molecular engineering, and high-throughput screening. These drugs are complex therapeutic entities, including proteins, antibodies, and other biologics that offers highly targeted mechanisms of action for treating intricate diseases. Large molecule drugs are administered through injections or infusions and are often produced using advanced biotechnology processes. Furthermore, the rise of biopharmaceuticals and immunotherapies underscores the need for external capabilities in expression, purification, and characterization.
 

These drugs are used to treat numerous diseases, including cancer, autoimmune disorders, and infectious diseases. Outsourcing services for large-molecule development enables pharmaceutical and biotechnology companies to gain access to expertise and cutting-edge technologies and efficiently navigate the complexities of large-molecule drug development. Such factors are anticipated to boost market size.
 

Based on disease model, the drug discovery outsourcing services market is segmented into in vitro, animal, cellular, and other disease models. In vitro models accounted for significant revenue share of 42.5% of market, in 2022 and is expected to grow at 8% CAGR during the forecast timeframe. In vitro models provide a controlled and rapid platform for high-throughput screening of potential drug compounds, enabling the assessment of numerous candidates in a shorter time frame. These models simulate disease conditions in a controlled environment, enabling swift and cost-effective evaluation of potential drug candidates. In vitro models aid in the early stages of drug discovery, enabling efficient evaluation of toxicity of drug candidates, compound efficacy and safety profiles before progressing to more resource-intensive stages. This minimizes potential risks, reduces costs, and accelerates decision-making.
 

Based on cancer type, the drug discovery outsourcing services market is segmented into oncology, neurology, diabetes, infectious diseases, and other therapeutic areas. The oncology segment was valued to be USD 1,190.7 million in 2022 and is expected to grow at CAGR of 8.3% during the forecast timeframe. The rising burden of oncology has surged the demand for drug discovery outsourcing services to develop novel cancer therapeutics. Drug discovery outsourcing lead to the development of novel and innovative oncology treatments, addressing unmet medical needs and offering new avenues for cancer management. Drug discovery outsourcing services in oncology provide specialized expertise, resources, and technologies to identify and develop innovative drugs targeting cancer.
 

For instance, in 2023, Astex Pharmaceuticals collaborated with Merck & Co., Inc. to identify small molecule candidates with activity towards a tumour suppressor protein for the treatment of cancer. Similarly, in June 2020, AstraZeneca partnered with Accent Therapeutics to discover, develop, and commercialize novel cancer therapeutics targeting RNA-modifying proteins (RMPs). This collaborative effort will enable to rapidly advance and achieve the effective therapeutic potential for the treatment of cancer.
 

The North America drug discovery outsourcing services market dominated the overall industry with 50.3% market proportion in 2022 and is expected to show similar trend over the coming years. This high revenue share is mainly attributed to the region’s strong pharmaceutical industry and advanced research infrastructure, attracting global collaborations. Outsourcing offers cost-efficiency through access to skilled scientists, cutting-edge technologies, and specialized expertise, allowing companies to optimize resources. Moreover, the increasing complexity of drug discovery, from target identification to preclinical studies, necessitates diverse capabilities. By partnering with outsourcing providers, pharmaceutical companies tap into a wide range of services, accelerating timelines, fostering innovation, and staying competitive in the rapidly evolving landscape, thus fostering the growth of the North America market.
 

Drug Discovery Outsourcing Services Market Share

Major market players operating in the drug discovery outsourcing services market include

• Charles River Laboratories International
• IQVIA (Quintiles IMS Holdings, Inc.)
• Laboratory Corporation of America Holdings (Covance Inc.) 
• Pharmaceutical Product Development (Thermo Fisher Scientific, Inc.)  

These industry players majorly adopt various strategies including collaborations, acquisitions, mergers, and partnerships to create a global footprint and sustain market competition.
 

Drug Discovery Outsourcing Services Industry News

• In January 2023, Charles River Laboratories International, Inc. acquired SAMDI Tech, Inc, a leading provider of high-quality, label-free high-throughput screening (HTS) solutions for drug discovery research. This strategy helped the company gain a seamless access to the HTS platform to create a comprehensive, industry-leading library of drug discovery solutions.
   
• In December 2021, Labcorp announced acquired Toxikon Corporation, a contract research company offering nonclinical testing services. The addition of Toxikon to Labcorp drug development enhances the company’s strong nonclinical development portfolio and assists in generating a strategic footprint for the company to partner with pharmaceutical and biotechnology clients.
   

The drug discovery outsourcing services market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2032, for the following segments

Click here to Buy Section of this Report

By Service Type

• Chemistry services
• Biological services

By Drug type  

• Small-molecule drugs
• Large-molecule drugs

By Disease model  

• In vitro models
• Animal models
• Cellular models
• Other disease models

By Therapeutic area

• Oncology
• Neurology
• Diabetes
• Infectious diseases
• Other therapeutic areas

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • Rest of Middle East & Africa