Six Strategic Imperatives for CDMO-Sponsor Success: Simon Kucher Reveals Critical 2025 Industry Roadmap

Simon Kucher opened CDMO Live 2025 in Rotterdam by unveiling brand new research developed in partnership with PharmaSource.

The comprehensive study, presented by Kaan-Fabian Kekec and Clarita Simon, mapped the evolving landscape of CDMO-sponsor partnerships based on insights from over 100 industry experts.

Market Performance: Mixed Results in 2024, Cautious Optimism for 2025

The research revealed interesting performance patterns across the sector in 2024. Late-phase CDMOs and established pharmaceutical companies were more successful in meeting their growth targets compared to early-phase CDMOs and emerging biopharma companies. Notably, large molecule-focused CDMOs were twice as likely to have missed growth targets in 2024 versus small molecule-focused CDMOs.

Looking ahead to 2025, CDMOs expressed bullish sentiment, with optimism highest among early-phase focused providers. Small molecule CDMOs shared similar positive outlooks, with approximately 80% indicating a positive forecast. Large molecule CDMOs showed more caution, with only about 60% anticipating a positive outlook and the remaining 40% expecting a similar year to 2024.

Growth Drivers: Different Strategies for Different Modalities

The research highlighted contrasting growth strategies between small and large molecule CDMOs:

• Small molecule CDMOs are primarily pursuing growth through service expansion and entering new modalities
• Large molecule CDMOs are benefiting from market tailwinds and improved pricing models

Capacity Outlook: Preparing for Constraints

One of the most significant findings was the expectation of capacity constraints, particularly among late-phase and end-to-end providers. Only 20% of early-phase CDMOs expressed concern about capacity limitations, while higher constraints were anticipated for large molecule manufacturing. Established pharma companies were even more concerned about potential capacity challenges than the CDMOs themselves.

The Partnership Disconnect: Differing Priorities

The study revealed a critical misalignment in how CDMOs and pharma companies prioritise success factors:

Pharma priorities:

• Quality compliance/track record (#1 for established pharma)
• Cost effectiveness/value for money (#1 for emerging biopharma)
• Communication and collaboration (#1 for emerging biopharma)

CDMO perception:

• Speed as the #1 criterion (not even in the top 3 for pharma)

This disconnect highlights an opportunity for CDMOs to better align their value proposition with what sponsors actually prioritise: quality-first.

Pricing Models: Seeking Win-Win Arrangements

No single pricing model emerged as a clear winner, but several showed strong potential for mutual benefit:

• Milestone-based payments
• Discounts on longer-term commitments
• Performance-based pricing

Emerging biopharma companies strongly favored milestone or outcome-based pricing models due to tighter budgets, while take-or-pay models were seen as least attractive by pharmaceutical companies in the current market capacity situation.

Technology Investment: AI and Continuous Manufacturing Lead

AI and continuous manufacturing emerged as top technology priorities, though the research showed investments remain inconsistent:

• AI is a top investment area, especially in North America, with process optimization and R&D being the most cited use cases
• Continuous manufacturing is a key priority for late-phase CDMOs
• Process Analytical Technology (PAT) is a significant investment focus for pharma but less prioritized by CDMOs

Six Strategic Imperatives for Industry Success

The research concluded with six strategic imperatives for both CDMOs and pharmaceutical sponsors:

1. Secure capacity early – Pharma companies should secure large molecule capacity early, especially with late-phase and end-to-end CDMOs, where supply constraints are expected to tighten

2. Tailor engagement strategies – CDMOs need to customize their approach to distinct pharma segments, ensuring more targeted and effective partnerships

3. Implement flexible pricing – CDMOs should pursue more dynamic, flexible pricing tailored to specific pharma needs, moving away from one-size-fits-all approaches

4. Explore win-win price models – Both parties should explore models such as milestone-based and performance-based pricing to strengthen long-term partnerships

5. Develop value-added services – CDMOs should enhance customer experience, drive differentiation, and build stronger relationships, especially with emerging biopharma companies

6. Invest in key technologies – CDMOs should focus on AI and continuous manufacturing as differentiators to stand out in an increasingly competitive market

The research has set the tone for CDMO Live 2025, providing a data-driven foundation for discussions on partnership excellence, technology investment, and strategic market positioning in the year ahead.