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CMO Plays an Important Role in Drug Research and Manufacturing

Nov. 2018/11/28 15:56:46 By LEAP Chem

Contract Manufacturing Outsourcing, referred to as CMO, is mainly commissioned by pharmaceutical companies to conduct customized production services, including pharmaceutical outsourcing processes, formulation development, clinical trial drugs, chemical or biosynthetic raw material production, intermediate manufacturing, formulation, production (such as powder, injection) and packaging services.

Compared with CMO, the pharmaceutical contract custom development and production (CDMO) model has both customized research and development capabilities and production capacity, and can provide integrated services from pre-clinical research to commercial production. From the perspective of pharmaceutical companies, CDMO has become a pharmaceutical company. From a long-term strategic choice, from the perspective of CMO enterprises, the CDMO model is conducive to enhancing the opportunities for commercialized production orders for innovative drugs, with high technology added value and large profit margins, and enhances the comprehensive capabilities of enterprises in cooperation with customers.

At present, a series of new situations have emerged in the pharmaceutical industry. Pharmaceutical companies and biotechnology companies have focused on complex diseases, new situations in disease control, rising new markets, and formulation of existing products, broadening the market for CMOs. Production categories have expanded to solid formulations, liquid and semi-solid formulations, and injections and the like. Pharmaceutical companies have increased their R&D cooperation with CROs in the face of increased investment in research and development, lower output of new drugs, and fierce global competition. As a CRO company in China, Medicilo is constantly exploring and innovating on the road of new drug research and development, and is committed to providing customers with fast and efficient services. Its customized process research and development model also fully reflects this concept, enabling customers to get APIs as soon as possible, in order to carry out clinical research.

From the perspective of the process of drug development and production, there is a trend of outsourcing at all stages. In the drug research and development, a contract development organization CRO has emerged, covering: early drug target research, compound screening and synthesis; preclinical research involving pharmacodynamics, pharmacokinetics and safety evaluation; follow-up clinical trial phase Technical services, data processing and registration declarations.

In the production of pharmaceuticals, CMOs have emerged. From the perspective of business and product types, CMO companies are involved in almost all aspects of drug production, including drug production processes and prescription development, clinical trial drugs, chemical drug raw materials and intermediates, high-activity drug substances, formulation production and pharmaceutical packaging. In recent years, with the rise of biopharmaceutical research and development, many biopharmaceuticals with important clinical value have come out one after another, and the demand for biopharmaceuticals has gradually increased. Biomedical CMO has become another hot spot. CMO enterprises provide corresponding products to customers. Products and services generate revenue. From the perspective of drug development and industrial links, the service targets of the two have overlapping parts, but the business content has a big difference. Therefore, in recent years, the integration of CRO-CMO business and the creation of one-stop R&D service organizations have also become the development direction of many companies in the pharmaceutical outsourcing service industry. In addition, CMO companies are also actively expanding their product lines, and they are able to better serve their outsourcing needs by building their own large-scale enterprises that integrate the production of intermediates and APIs.

Due to the large number of types of businesses engaged in CMO industry, involving chemical raw materials, chemical preparations, biopharmaceuticals, etc., their industrial chain, market structure, and barriers to entry also vary widely. For CMO enterprises in emerging market countries such as China and India, the main focus is on the production of pharmaceutical intermediates and APIs.

Generally speaking, the upstream of enterprises producing pharmaceutical intermediates and chemical raw materials is the fine chemical industry, and the quality and price of upstream enterprise products can affect the enterprises in the industry. Since enterprises in the industry need a large amount of chemical products as the starting materials, the increase in the price of chemical products will inevitably raise the cost of enterprises. Enterprises often cooperate with multiple suppliers to optimize the industrial chain and control costs. In addition, CMO enterprises are at the source. It is very necessary to start quality control. Generally, suppliers will be selected and quality audited. CMO companies will also extend the industrial chain upstream through acquisitions to ensure the safety of their product supply.

Downstream of the CMO industry is a pharmaceutical manufacturing company. In order to ensure the timely supply of products and ensure the quality of products, pharmaceutical companies often determine suppliers through technical capabilities, management systems, EHS audits, etc., and then establish long-term strategic partnerships with a few core suppliers. Once the pharmaceutical companies can supply the goods for a long time, the customers generally do not change the suppliers, and the two sides often form a mutually beneficial and win-win relationship.

In addition, companies in the CMO industry also need to meet numerous regulatory requirements in the production process. In terms of management, quality and environmental protection are top priorities. Taking the export to the US market as an example, the quality of enterprise products is not up to standard or the production process violates cGMP standards, and often faces the penalty of market ban for a period of time; the strengthening of environmental protection supervision by the state also makes it more difficult for other companies to enter the CMO industry; In addition, CMO companies need to provide customers with services such as drug synthesis route research and process optimization. It is a technology and talent-intensive industry. These factors make the CMO industry have high barriers to entry.


LEAPChem is a professional supplier of high quality pharmaceuticals, intermediates, APIs, custom synthesis chemicals, screening compounds, building blocks, and other chemicals. We have rich experiences in custom synthesis of complex intermediates for drug research and manufacturing. Our strong product lines include OLED materials, inhibitors, Silicone materials, peptides, and custom synthesis chemicals.