Small Molecule, Big Impact
CDMOs going with the flow (chemistry)
While biologics and advanced therapies receive much of the hype, small molecules remain the backbone of pharmaceutical treatments. Small molecule drugs can reach targets that biologics cannot access and can be formulated as an oral dose, a choice many patients prefer. “Solid oral dose products remain essential due to their simplicity and ease of use,” emphasized Jim Donovan, VP, contract manufacturing business leader at Pfizer CentreOne. “This demand will not fade because convenience for patients is critical.”
ACG, the world’s largest supplier to solid dosage manufacturers with a presence in 138 countries and six continents, sees it much the same way. “The industry is heavily investing in biologics and injectables, with many companies expanding their portfolios in this space. We believe this trend will be short-lived. Injectable products are expensive and difficult to store, distribute and administer. That limits accessibility and affordability. The industry will return to oral solid dosage forms for their cost-efficiency and scalability,” reflected Karan Singh, managing director at ACG.
During 2023-2024, small molecules led biopharma technology venture funding, raising US$13.1 billion across 236 rounds, according to DealForma. Of 2024’s 50 FDA drug approvals, 64% were of small molecules. The small molecule API market is expected to grow at a CAGR of 5.45% until 2034, reaching US$331.6 billion. “Even as they evolve, with more complex structures like PROTACs and HPAPIs, small molecules play a crucial role in drug development,” emphasized Keith Dodson, executive director of business development and head of US marketing at Porton Pharma.
Many pharma companies lack in-house API manufacturing capabilities and prefer outsourcing to CDMOs, which feeds small molecule CDMO market growth, expected to rise from US$56.49 billion in 2024 to US$60.88 billion in 2025, reflecting a 7.8% CAGR. “Small and mid-sized companies increasingly outsource to CDMOs to streamline drug development, reduce costs and increase flexibility,” listed Andrea Confetti, exclusive synthesis BU leader at Dipharma Francis. Even large pharma companies outsource API production to focus on R&D and commercialization.
Many of the small molecule CDMOs that spoke with GBR are increasing capacity as demand increases. Many are evaluating ways to expand capacity to support US API market growth. In the short term, there will be a scale up in existing manufacturing assets. Longer term, new construction will likely add more capacity.
“Small molecules remain the backbone of the pharmaceutical pipeline. Even as they evolve, with more complex structures like PROTACs and high- potency APIs, they continue to play a crucial role in drug development.”
Keith Dodson, Executive Director, Business Development and Head US Marketing, Porton Pharma
High-potency (HPAPI) and specialty APIs in the US are driving small molecule API growth. This trend has already trickled down to CDMOs. “We see rising demand for high-potency API capabilities, and we are expanding those at our New Jersey and Shanghai sites,” mentioned Dodson.
Italy-based PROCOS is opening a new manufacturing facility by 2026 to support growth of the small molecule sector, increasing overall manufacturing capacity by 25%. “This new facility will significantly enhance our small-scale production capacity, enabling us to meet the growing demand for high-quality, specialized APIs in the US market,” said David Short, senior manager of business development in the US and Canada.
Producing high-quality APIs requires compliance with Good Manufacturing Practices (GMP), FDA and EMA regulations. “Regulatory scrutiny by the FDA has intensified, particularly for foreign manufacturers, whose facilities are inspected every 2-3 years under rigorous standards. Domestic manufacturers face unannounced inspections at any time,” warned Jay Shukla, president and CEO of Nivagen Pharmaceuticals.
A large driver of small molecule CDMO market growth is the increasing complexity of drug development. As compounds become more intricate, the number of synthetic steps required for production has risen by approximately two-thirds over the past two decades and is accelerating. “In the past three years, complexity in the industry increased, even in synthetic chemistry APIs. This impacts regulations and critical process parameters, even at the intermediate stage,” detailed Martin Meeson, the CEO of Axplora.
Increased complexity means longer syntheses that challenge innovators’ timely readiness for the clinic. With many new molecular entities being approved via some form of expedited approval pathway, there is continued high demand for CDMO services to meet ever-shorter timelines. “In the innovator space, time is more valuable than money,” emphasized Dodson.
Moving at high distance over time
After the COVID-19 pandemic, speed-to-market requirements have heightened. “There was once one mega-blockbuster drug that dominated for years, with no competitors. Today, when a blockbuster hits, other companies quickly enter the space,” explained Colleen Dixon, president and CEO of Selkirk Pharma.
Drug makers are starting to seek out contract research development manufacturing organizations (CRDMOs) to accelerate the time it takes to bring new therapies to market. CRDMOs eliminate phase-to-phase handoffs and minimize time spent onboarding new partners. According to Krishna Kanumuri, CEO and managing director of Sai Life Sciences, an India-based CRMDO: “While drug development once took eight–10 years, the industry now aims to achieve it in just 1,000 days. As a result, manufacturing and testing cycles are accelerating rapidly.”
The Indian CRMDO market is poised for significant growth and is ranked second globally for established small molecule capabilities with 262 FDA approved sites.
Over the hill and picking up speed
The FDA released guidance for applying continuous manufacturing to pharmaceuticals in 2004 and approved the first drug manufactured using continuous manufacturing in 2015. A decade later, despite its merit, continuous manufacturing is not the norm. Takahiro Ueda, CEO of CMIC CMO USA, explained: “Continuous manufacturing hit the market before, but most big pharma companies gave up after failed attempts. J&J and Pfizer, however, invested heavily, perfected it, and made it work. Without serious capital and the right equipment, it fails.”
Today, CDMOs must adapt production processes to accommodate varying product types, volumes, and customer demands, ensure quality without sacrificing speed, and meet stricter regulations. These constricts make the higher capital investment of continuous manufacturing more reasonable. “There are three key factors driving the uptake of flow chemistry: process safety, manufacturing efficiency, and better yields with less waste,” said Saurabh Gurnurkar, the managing director of the Uquifa Group.
CDMOs are investing in continuous manufacturing and starting to see success. “CordenPharma starts with proof-of-concept studies, and scales where we see success” explained CEO and president Michael Quirmbach. “One example of this was our move into Flow Chemistry, for which we have now installed a manufacturing plant.”
Dipharma Francis, a CDMO founded on the continuous manufacture of nitroglycerin, consistently thrives using continuous processes. “A recent implementation is the continuous synthesis of a Nitro-alkyl reagent, where we optimized reaction conditions using a flow reactor and a real-time monitoring system, improving reliability and safety while reducing waste and ensuring yield and process control,” said Roberto Fanelli, catalogue APIs BU leader.
Continuous flow chemistry is becoming essential in pharmaceutical manufacturing, as North America localizes supply chains. Gamil Alhakimi, president of GL Chemtec International, said: “While not all synthesis can shift back, flow chemistry offers major advantages over batch processes, including improved safety, efficiency, cost reduction, and scalability. It also minimizes impurities, enhances process control, and speeds up production.”
Supply chain resilience is one of the greatest selling points of continuous manufacturing, especially from the perspective of business continuity practices (BCP). “Continuous manufacturing uses the same equipment across multiple regions. Only parameter settings need adjustment, making tech transfers faster and cheaper. With identical equipment at multiple sites, companies can quickly switch locations during natural disasters, ensuring uninterrupted production,” Ueda elaborated.
Even with its growing capacity, the US must be cautious in its approach to cutting off foreign small molecule API providers. The proposed Biosecure Act could devastate the segment. WuXi AppTec’s small molecule unit is involved in around 62 FDA approved drugs. The company is responsible for manufacturing the API, intermediate or finished dose of these drugs and, likely, all aspects of the drug manufacturing. WuXi AppTec supported 27% of all FDA small molecule drug approvals from 2023. Cutting off this capacity could be catastrophic for patients.
The potential disruption caused by limiting access to established API manufacturers like WuXi AppTec underscores the delicate balance in global pharmaceutical supply chains. While bolstering domestic manufacturing capacity is a long-term goal, abruptly severing ties with key international partners could lead to significant drug shortages and hinder patient access to vital therapies. This highlights the need for nuanced policy approaches that consider both national security interests and the immediate realities of drug development and patient care. Companies may need to proactively diversify their supplier base and invest further in domestic capabilities to navigate this evolving landscape effectively.
Article header image courtesy of Contract Pharmacal Corp