PHARMACEUTICALS
or for less cost. Both parties should carry out due diligence, particularly for GLP-1s. This model, added Roth, will never be about revenue sharing but trust is crucial. This includes joint planning so that the right time slot can be identified.
Where is M & A going?
Moving onto M & A, Seghal observed that 2025 had been characterised as the year when more companies were potentially going to come market but in the end did not. So what is going on right now, will the number of deals increase and will the CDMO sector consolidate, as has long been predicted?
2025 had mainly been characterised by carve-outs, Chehab said. For instance, WuXi STA exited cell and gene therapy and Lonza was in the process of selling its capsule business. Others had been repurposing certain businesses. M & A in pharma had been more muted, largely because of uncertainty over tariffs though also because of restocking in certain portfolios.
The biologics space, she added, had been considerably more dynamic than the chemistry space.“ There we are seeing a lot of capex investments in new science coming online and new minority partners coming in.” For 2026, J. P. Morgan expects some of the current dynamics to flush out of the system and greater clarity for clients.
“ Consolidation happens, it’ s not something we can avoid,” Amador said.“ We have to keep an eye on it and read the protocols and the clauses in the agreements we have for when it happens to give us security of our drugs being supplied. A concentration in the supplier base also“ gives us more power to foster innovation and improvements in the sector.”
What is the road ahead?
Concluding, Seghal asked whether, if the CDMO sector is truly‘ at the crossroads’, what those crossroads actually look like. What will take them down the correct road?
Thermo Fisher lab at Princeton
In Roth’ s view the crossroads centres on the impact of US government policies. This starts tariffs and pressure for onshoring but the future of the FDA is also a worry. He spends much of his time negotiating with the FDA, trying to understand the impact of cuts to job cuts there and of government funding of R & D platforms.
“ If the FDA is put under significant stress due to job cuts and funding issues, that could potentially impact drug review timelines. If that happens, all of this gets blown up,” said Roth.“ That’ s what I really get concerned with, because if investors can no longer trust in user fee dates for review timelines, they’ re going to find somewhere else to invest.”
Firing 8,000 people from the FDA is already creating atmospheres of uncertainty over drug reviews where people thought they had a timeline, Roth continued.“ Things like that can start to create a degree of uncertainty when it comes to pharma R & D and all of that affects everyone in this entire ecosystem.”
Ultimately, Chehab said,“ it’ s all about resilience. We have biotech funding trickling down across the industry and we are starting to see some positive indications in the number of clinical trial starts and
IPOs coming back”. US policy now is clearly a cause for concern, but once there is more clarity, whatever the direction of travel is, the investors who are currently sitting on the sidelines will come back.
Kane said he expects outsourcing to expert CDMOs will continue in the next two to three years, with a particular focus on oncology, neurology and metabolic disorders. Large-volume products like GLP-1s will remain important. From a CDMO perspective, there will be more inlicensing and out-licensing.
“ The rights to molecules may change hands but as CDMOs we will continue to support smaller biotechs and late-stage acquired molecules,” he said.“ Last but not least, I certainly expect to see CDMOs applying AI to drug development. This will be key in the coming years.”
Amador concluded by saying that the industry is at“ a crucial moment where CDMOs need to choose between being transactional or strategic. … CDMOs who are willing to partner with us from a commercial perspective and who understand the pressures of launch, market access, the regulatory challenges will be the ones who are better positioned to sign collaborations with us.” ●
18 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981