Small molecules are here to stay
David Molyneux, vice president of business development at Sterling Pharma Solutions, shows why biologics are not going to take over any time soon
Despite the continued rise in the development of advanced biologic modalities such as antibody-drug conjugates( ADCs), peptides and oligonucleotide therapeutics, small molecules continue to show incredible resilience to attrition, with small molecules accounting for 67 % of all FDA novel drug therapy approvals within 2025, compared with 62 % in both 2024 and 2023 and 51 % in 2022.1
This is good news for CDMOs working within small-molecule API manufacturing, clearly demonstrating that the market is not only strong but growing. This, in turn, would suggest a growing demand for outsourced services, particularly those requiring specialised capabilities, such as highly potent containment solutions, as the complexity of small molecule therapeutics continues to increase. Of course, the reality is not so simple, as the complexities of the current economic and political environment continue to impact the industry.
Lack of funding
The funding environment for biotech companies has been challenging over the last two years, with a reported 20 % drop in funding from 2024 to 2025.2 This has resulted in fewer early-phase development projects for CDMOs to support, although a continued increase in early-phase outsourcing from big pharma has helped to offset the decline to some extent.
Deal flow shows a continued shift towards the support of laterphase programmes versus preclinical ones, where the potential of success and shorter-term return is higher. However, there are positive indications that the environment for early-phase investment is improving,
Sterling’ s large-scale manufacturing site at Germantown, Wisconsin
giving rise to growing numbers of molecules entering and progressing through clinical development in the coming years. 3
The move to Western suppliers
The increased demand for CDMO services has seen a particular focus on Western-based manufacturers, as historic concerns over intellectual property and quality continue. More recently, geopolitical pressures and industrial policies, especially those in the US, have been the catalyst for customers increasingly looking to partner with Western suppliers, placing an increased demand on domestic manufacturing capacity.
The impact of this reshoring on the availability of high-quality CDMO capacity and resources seems to be greater within clinical- and commercial-scale manufacturing, as opposed to early-phase development programmes, where outsourcing to lower-cost economies still appears to be considered.
Capacity constraints
Alongside this widespread rise in demand, there are specific areas showing capacity constraints, such as high-potency APIs and ADCs, as early-phase development projects advance into clinical phases and ultimately towards commercialisation. This increased demand has driven numerous investments by CDMOs in this area, as well as in capacity across all scales, to ensure that bottlenecks in availability do not hinder the progress of development.
Increasingly, projects are won or lost based on the availability of CDMO capacity and overall project delivery timeline. The pressure on time is not limited to manufacturing capacities, or process development resource, but increasingly within the area of analytical and quality resource. Ever-increasing regulatory expectations necessarily drive further resource requirements across method development, analytical testing and quality release for APIs, intermediates and raw materials.
20 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981