Small Molecule CDMOs: Recent Consolidation And Expansion Developments
By Sabyasachi Ghosh, Future Market Insights
The small molecule contract development and manufacturing (CDMO) sector continues to expand in 2025. As per estimates by Future Market Insights, global revenue will reach $124 billion by 2034, up from $74 billion in 2024.
Pharmaceutical innovators are increasingly concentrating internal capabilities on discovery and marketing and outsourcing manufacturing to CDMOs for flexibility and capacity.
In addition to cost containment, the main drivers of this rise in partnering with small molecule CDMOs are the spread of advanced small molecule medicines (particularly in oncology and metabolic disorders), capacity needs for high-profile treatments (such as new-generation diabetes and obesity medicines) that need specialized manufacturing, and advances in manufacturing technology.
CDMOs are making investments in technologies like continuous processing, automation, and digital platforms to provide quicker, more economical production with high quality.
Just as significant is the consolidation wave and investment transforming the competitive landscape. Even as the market expands, it is still fragmented — the top five CDMOs hold only ~15% market share — driving both M&A and big capital projects to get ahead.
Consolidation And Big Investments
Catalent
One of the most significant storylines of 2024 was market consolidation in the CDMO landscape. The standout deal was Novo Holdings’ proposed $16.5 billion acquisition of Catalent Inc., announced in February 2024.
Catalent – a top-tier CDMO known for its global manufacturing footprint — became the target of Novo (the parent of Novo Nordisk) as a means to secure manufacturing capacity for Novo Nordisk’s booming diabetes and obesity drug franchise (notably the GLP-1 agonist semaglutide, sold as Ozempic/Wegovy).
The deal, which gained European Commission approval by late 2024, involves Catalent’s valuable sterile fill/finish facilities in Indiana, Belgium, and Italy being transferred to Novo Nordisk post-acquisition.
This acquisition, the largest pharma industry transaction of 2024, underscores how high demand for complex therapeutics (like injectable peptides) is driving Big Pharma to vertically integrate or align closely with CDMOs for reliable capacity.
Lonza Group
Lonza Group, the world’s largest CDMO, responded to the changing landscape with strategic refocusing rather than a sell-off. In late 2024, Lonza announced a major organizational restructuring, dubbed the “One Lonza” strategy, to streamline around its core CDMO businesses. The organization was reshaped into three integrated business units: Integrated Biologics, Advanced Synthesis, and Specialized Modalities, aligned with biologics drug substance/product, small molecules and bioconjugates, and cell/gene/mRNA technologies, respectively.
At the same time, Lonza decided to divest its non-CDMO Capsule & Health Ingredients business to become a pure-play CDMO with a higher-growth pharma services orientation.
It also invested in Visp, Switzerland, antibody-drug conjugate (ADC) manufacturing suites – steps that, though focused on biologics, supplement Lonza's small molecule business by putting the company at the forefront of hybrid modality production.
Global Capacity Expansion By CDMOs
Aside from mergers and corporate restructuring, 2024 and the early part of 2025 has been a time of frenetic capacity building for CDMOs globally. Several top contract manufacturers have invested in new buildings, new equipment, and new acquisitions to make sure they are able to meet current and upcoming projects.
Cambrex Corporation
A good example is U.S.-based small molecule CDMO Cambrex Corporation, which in 2024 finalized a string of multiyear projects over both North America and Europe.
Cambrex doubled the production capacity at its High Point, NC, API plant during the first half of 2024, after investing $38 million. This growth introduced state-of-the-art analytical and chemical development laboratories, two additional clinical-scale production suites, and a small-scale commercial production zone with 2,000 L reactors. Significantly, the capabilities of the High Point facility were complemented by Cambrex's earlier acquisition of Snapdragon Chemistry, a company with expertise in continuous flow process development, to allow customers to access flow chemistry from R&D to commercialization with a single partner.
Cambrex's expansion was not confined to the U.S. Cambrex outlined at DCAT Week 2024 a five-year, $100 million expansion initiative. This project added capacity in 70% of its worldwide network and implemented new technologies. Projects that have been finished include a high-potency API (HPAPI) development laboratory in Milan, Italy (with containment isolators for working with toxic substances), a new 40,000-square-foot stability storage building in Belgium, and a 51,000-square-foot R&D center expansion near Boston with several kilo-labs and flow chemistry labs.
In addition, Cambrex increased its main Charles City, IA, plant by adding large 16,000 L reactors and increasing capacity by 30%, to a total of 100 m3 of reactor volume for commercial API production.
These investments substantially strengthen Cambrex's capacity to develop projects from early stages to large-scale production, especially for complex, highly active small molecules. They also reflect a trend across the industry to make capacity not a bottleneck as biotech pipelines produce more candidates that need to be scaled up quickly.
Laurus Labs
In India, Laurus Labs became an emerging CDMO player by augmenting its R&D facilities. In September 2024, Laurus commissioned a new 200,000-square-foot R&D facility at IKP Knowledge Park near Hyderabad to serve its contract development and manufacturing business.
WuXi AppTec
WuXi AppTec has strategically expanded its global footprint to enhance its contract research, development, and manufacturing capabilities. Operating across Asia, Europe, and North America, the company offers integrated, end-to-end services that encompass chemistry drug contract research, development, and manufacturing organization (CRDMO) services , biology discovery, preclinical testing, and clinical research services. This comprehensive approach enables WuXi AppTec to support clients from the initial stages of drug discovery through to commercialization. Notably, the company has received an AA ESG rating from MSCI for four consecutive years up to 2024, reflecting its commitment to environmental, social, and governance standards.
Hovione
Hovione, a specialist integrated CDMO and leader in spray drying and particle engineering, has recently completed significant expansions at its facilities in East Windsor, NJ, USA, and Ringaskiddy, Cork, Ireland. These investments have nearly doubled the company's global spray drying capacity, a critical technology for enhancing drug solubility and bioavailability, particularly in inhalable therapies and oral formulations with low bioavailability. The expansion in New Jersey marks the beginning of a multi-year site development program aimed at advancing both spray drying and tableting capabilities. Collectively, these efforts are creating over 40 new skilled jobs, underscoring Hovione's commitment to growth and innovation in pharmaceutical manufacturing.
Thermo Fisher Scientific
In October 2024, Thermo Fisher Scientific launched the Accelerator Drug Development platform, offering a customizable suite of CDMO and clinical research organization (CRO) services. This initiative provides solutions designed to support clients at every stage of the drug development process, from preclinical studies to commercialization. The platform encompasses manufacturing, clinical research, and clinical supply chain services, catering to a diverse range of treatments, including small molecules, oligonucleotides, and peptides, amongst others.
Additionally, Thermo Fisher expanded its facilities in Cincinnati, OH, and Bend, OR, enhancing research and development, manufacturing, and testing capabilities for oral solid dose drug formulations.
The expansions at Cambrex, WuXi, Hovione, Thermo, and others also indicate another truth: capacity needs to be accompanied by capability. Most of these investments incorporate advanced technologies or specialized know-how, so that CDMOs are able to produce not only more volume but more sophisticated products. It's a simple answer to the customer's need: the pipeline is full at the pharma with candidates for products, both in small molecules as well as in hybrid modalities, and the sponsors want collaborators who can roll out the capacity on demand.
The Demand For Complex And High-Value Therapeutics
Underpinning many of these strategic moves is the booming demand for complex and high-value therapeutics, which has been a defining force. Pharma companies are advancing therapies that are more targeted, more potent, and often more difficult to manufacture than traditional small molecule pills.
This has two major implications: first, pharma is investing heavily in ensuring manufacturing capacity (either in-house or through partners) for their marquee therapies; second, they increasingly rely on specialized CDMO services for niche expertise or to handle surge capacity.
A clear example is the race to supply GLP-1 receptor agonists for type 2 diabetes and obesity, as GLP-1 receptor agonists are a class of peptides and small proteins that saw explosive demand.
The Catalent–Novo deal mentioned earlier was driven by Novo Nordisk’s need for more injectable drug production for semaglutide. Its chief competitor, Eli Lilly & Co., similarly embarked on an extraordinary manufacturing expansion for its own GLP-1 products (such as tirzepatide, brand name Mounjaro).
In mid-2024, Lilly announced plans to build a new $5.3 billion API manufacturing plant in Lebanon, IN, dedicated to producing active ingredients for Mounjaro and the obesity drug Zepbound. This is part of Lilly’s broader commitment of over $16 billion in new manufacturing sites across the U.S. and Europe, including major projects in North Carolina’s Research Triangle Park and in Ireland and Germany. It also underscores how quality and technology in fill/finish (such as advanced aseptic processing and device assembly) are now key differentiators in the CDMO space.
An Industry Transformed And Poised For The Future
The developments depict an industry in transformation. The small molecule CDMO market is no longer just about making drugs cheaply — it has become a strategic partner in the pharmaceutical value chain, driving innovation in how medicines are developed and delivered. Through major consolidation moves, leading players are gaining scale and breadth, aiming to offer end-to-end solutions reminiscent of the CRO industry’s evolution.
About The Author:
Sabyasachi Ghosh, associate vice president at Future Market Insights, holds over 15 years of experience in the healthcare, medical devices, and pharmaceutical industries. His primary expertise lies in areas such as market entry and expansion strategy, feasibility studies, competitive intelligence, and strategic transformation. Ghosh holds a degree in microbiology.