The Emergence of COVID-19 to Augment Growth of the Outsourced Drug Discovery Market

 

With billions of dollars in research and development costs, pharmaceutical companies around the world are always looking for new ways to address their production processes in a cost-effective manner. One way to achieve this is through outsourcing drug discovery and development services. This type of service refers to the collaboration between small and large biotech and biotechnology companies to conduct research and development activities aimed at finding better solutions to the company's core chemical concerns.

Outsourcing of these drug discovery services has enabled established pharmaceutical and biotechnology companies to focus on the development of new products that can bring about significant therapeutic change and provide tangible advantages to the company's shareholders. Contract research organizations manage almost all aspects of drug discovery.

Market Dynamics

Increasing demand for outsourcing analytical testing and clinical trial services, growing R&D expenditure in the pharmaceutical and biopharmaceutical industry, and increasing number of new drug discovery companies are expected to propel the outsourced drug discovery market growth. For instance, in 2018, Schrodinger and Wuxi AppTec launched new drug discovery company, Faxian Therapeutics, in the United States, to improve health care needs.

The outsourced drug discovery market is witnessing significant M&A activities. For instance, in 2019, Lambda Therapeutic Research acquired Novum Pharmaceutical Research Services to expand its presence in the U.S. market.

The emergence of COVID-19 is expected to offer lucrative growth opportunities for players in the market. For instance, pharmaceutical companies and contract research organizations, such as Sekisuki XenoTech are continually looking for safe and efficient ways to accelerate drug delivery, especially in the face of the pandemic.

However, high financial costs, inadequacies in the clinical research workforce, troubles in the retention and recruitment of participants, drug sponsor-imposed barriers, stringent regulations, and problems related to globalization of clinical research are some of the factors expected to restrain the growth of the outsourced drug discovery market.

Competitive Analysis

Key players operating in the outsourced drug discovery market are Sundia Meditech Co. Ltd., Shanghai Medicilon, Pharmaron Inc., Jubilant Biosys Ltd, Syngene International Ltd., Evotec AG, TCG Lifesciences, Chempartner, Charles River Laboratories (CRL), Bioduro LLC, and Aurigene Accelerating Discovery.

Major players in the market are adopting various strategies such as collaborations, partnerships, etc. to implement artificial intelligence (AL) in drug discovery. For instance, in January 2021, Sosei Heptares and PharmEnable collaborated for AI-driven drug discovery against a challenging G protein-couple receptor target associated with a range of neurological diseases.