Moderated by Raman Sehgal, Host of Molecule to Market, this opening panel at CDMO Live Europe 2026 brought together Melanie Wamsler, External Network Strategy Lead, Takeda, Rocco Paracchini, Vice President, Morpho, Kaan-Fabian Kekec, Partner, Simon-Kucher, and Kurt Nielsen, President, Longview Leader, to assess market conditions, capital discipline, geopolitical risk, and pricing in contract manufacturing.
Market Sentiment: Realism Replaces Exuberance
The panel opened with a temperature check on the sector. Kurt Nielsen described the current environment as one of “selective realism.” The irrational exuberance of the free-money era, he argued, is over and will not return. “When you do all those things — productivity, cost, delivery, taking care of your customers — you have a great business. When you don’t, you’re gonna get bought.”
Kaan-Fabian Kekec characterized the market as “cautiously miscalibrated.” Structural fundamentals remain solid, he said, but optimism at the sector level masks frustration at the execution level — a disconnect made concrete by the research he had presented moments earlier showing expectation fulfillment rates of 50% or below across key CDMO-pharma pairings.
Rocco Paracchini, Vice President at Morpho, the contract manufacturing arm of mid-size European pharmaceutical company Alfasigma, drew on the accumulated shocks since 2020 — COVID disruption, energy price spikes, extended lead times for critical materials — to argue that a permanent reset is underway. “We need to be able to read the reality that we’re living in.” His prescription: focus tightly on areas of genuine excellence rather than claiming broad capability. “Don’t claim you can do it all. Just focus on where your excellence is.”
Melanie Wamsler framed the market as increasingly difficult to navigate, driven by both internal portfolio complexity — oligonucleotides, conjugates, peptides sitting between traditional small and large molecule categories — and mounting external pressures.
Capital Discipline: From Impulse Buy to Investment Thesis
The panel agreed that private equity and institutional capital remain interested in pharma services but are deploying with far greater discipline than five years ago. Nielsen described the earlier era as an “impulse buy” — assets acquired without rigorous analysis of what they actually did well. Today, investors are asking sharper questions about core capabilities, geographic scalability, and white-space adjacencies.
Kekec put it in terms of the investment thesis shifting from growth potential to the ability to sustain pricing power and margins through volatility. “Capital is still available, but the bar has been raised for which assets actually receive the funding.”
Paracchini added a structural caution: private equity return horizons are often incompatible with CDMO capital expenditure cycles. Installing a single piece of critical equipment, commissioning it, qualifying it with a customer, and reaching saturation rarely takes fewer than five to seven years. Investors who do not understand this risk destroying value rather than creating it. His conclusion was that concentrated excellence beats undifferentiated expansion. “Just make sure you can strive for excellence and keep being the go-to.”
Geopolitics and Dual Sourcing
Wamsler described geography as an additional layer of complexity in what was already a highly complex decision-making process. Pharma companies are now assessing manufacturing network strength at the enterprise level rather than site by site or product by product. Dual sourcing, once a theoretical option, has become a far more prominent discussion topic. But she cautioned against treating it as a universal solution.
“Dual sourcing does not mean you implement complete supply redundancy for all products in all markets.” The more useful framework, she said, is lifecycle-based: launch products optimized for speed, growth and mature products assessed for supply security and potential dual-source arrangements, declining products consolidated for cost. Even then, volume scale and process complexity often make dual sourcing impractical, making inventory building a more realistic fallback for many programs.
Paracchini broadened the risk taxonomy beyond geopolitical factors to include cybersecurity and currency exposure. He described a supplier attack that nearly disrupted critical production, noting that some categories have so few qualified alternatives that double-sourcing offers no real protection. His recommendation: rigorous value stream mapping to identify which specific process steps are most exposed, then targeted mitigation — whether disaster recovery plans, inventory buffers, or, in his words, choosing partners carefully and committing fully. “Once you find someone you really want to live with, marry well.”
Pricing: What to Price, Not Just What Price
Kekec reframed the pricing conversation. The wrong starting question, he argued, is what price to set. The right question is what to price. Not every program requires the full-service offering, and CDMOs that present tiered service levels — with different commitment levels, governance models, and scope options — can respond to budget constraints without discounting their core offering and hitting their margin. “The conversation is not just about price, but really about value trade-offs.”
Alternative commercial models, including performance-based pricing and milestone payments, are both demanded by pharma and underused by CDMOs. Piloting these models selectively is, in his view, also a credibility move. A CDMO willing to share in performance risk makes its reliability claims more credible.
Nielsen closed the pricing discussion, “You’re only as smart as your dumbest competitor.” If an undisciplined competitor drops price, the market follows. The counterweight is investment in business development and sourcing teams who understand the actual needs of the business — and the willingness to structure deals that create value for both parties.
