High Potency APIs: Opportunities and Challenges for Contract Manufacturing Organizations

Introduction:

 

The Global High Potency APIs Industry is a fast-growing market segment in the pharmaceutical industry. High Potency Active Pharmaceutical Ingredients (HPAPIs) are compounds that are used in the manufacturing of drugs that require high potency, typically for the treatment of cancer, autoimmune diseases, and other conditions.

 

The HPAPI market is driven by the increasing prevalence of these diseases, along with the growing demand for effective treatments. As a result, pharmaceutical companies are investing heavily in research and development of new HPAPI drugs, creating a surge in demand for HPAPIs.

 

Overall, the global HPAPI industry presents significant opportunities and challenges for pharmaceutical companies, contract manufacturing organizations, and other stakeholders in the industry. As the demand for effective treatments for cancer and other chronic diseases continues to grow, the HPAPI market is expected to remain a critical segment in the pharmaceutical industry.

 

Opportunities and Challenges for Contract Manufacturing Organizations (CROs):

 

Contract Manufacturing Organizations (CMOs) have been playing an increasingly significant role in the production of pharmaceutical products, including High Potency Active Pharmaceutical Ingredients (HPAPIs). HPAPIs are used in the manufacturing of drugs that require high potency, and they have specific challenges and opportunities for CMOs. In this blog, we will discuss the opportunities and challenges faced by CMOs in the High Potency APIs market.

 

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Opportunities for CMOs:

 

1.   Increasing demand for HPAPIs: The demand for HPAPIs is increasing, and CMOs are well-positioned to capitalize on this trend. As the number of oncology drugs and other high potency drugs in the market continues to rise, the demand for HPAPIs will also grow. CMOs can take advantage of this opportunity by expanding their HPAPI production capacity.

 

2.   Revenue growth potential: HPAPIs are high-value products that command a premium price. This provides a significant revenue growth opportunity for CMOs, particularly those that specialize in HPAPI manufacturing.

 

3.   Customization and flexibility: HPAPIs require specialized manufacturing processes, and CMOs can provide the required flexibility and customization to meet the specific needs of their clients. CMOs can work closely with their clients to tailor their manufacturing processes and production capacity to meet their unique needs.

 

4.   Collaborations and partnerships: CMOs can establish collaborations and partnerships with pharmaceutical companies and other stakeholders in the HPAPI market. These partnerships can help CMOs to expand their capabilities, access new markets, and build long-term relationships with their clients.

 

Challenges for CMOs:

 

1.   Compliance and regulatory requirements: HPAPIs are subject to strict regulatory requirements and compliance standards, which can be challenging for CMOs to meet. CMOs must ensure that their manufacturing processes and facilities meet the required standards, and they must stay up-to-date with the latest regulatory changes.

 

2.   Manufacturing complexity: HPAPIs are complex products that require specialized manufacturing processes and equipment. CMOs must invest in the necessary infrastructure and equipment to manufacture HPAPIs, which can be costly and time-consuming.

 

3.   Health and safety risks: HPAPIs are potent substances that pose health and safety risks to workers involved in their production. CMOs must have robust safety measures and protocols in place to protect their workers from exposure to HPAPIs.

 

4.   Intellectual property rights: HPAPIs are often developed under strict intellectual property rights, which can limit the ability of CMOs to innovate and develop new products. CMOs must navigate these intellectual property issues to avoid legal disputes and protect their own intellectual property rights.

 

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Conclusion:

 

Global High Potency APIs market presents significant opportunities and challenges for Contract Manufacturing Organizations. CMOs can capitalize on the growing demand for HPAPIs and the revenue growth potential they offer. However, they must also navigate the compliance and regulatory requirements, manufacturing complexity, health and safety risks, and intellectual property issues that come with producing HPAPIs. By staying informed about the latest trends and investing in the necessary infrastructure and equipment, CMOs can successfully navigate the challenges and reap the rewards of the HPAPI market.

High Potency APIs Market - Global Industry Dynamics

 Increasing Demand for Oncology Drugs

HPAPIs are extremely effective pharmacologically active ingredients. They are highly specific in their action and offer significant efficiency even at low daily therapeutic doses. HPAPIs have the ability to target precise disease cells and are, hence, used in formulations for highly potent drugs.

Owing to their target release characteristics, HPAPIs find major applications in target therapies for cancer. Globally, there is a significant growth in the incidence of cancer. According to the WHO, in 2012, there were 14.1 million new cancer cases, 8.2 million cancer deaths, and 32.6 million people living with cancer (within 5 years of diagnosis) worldwide. The American cancer Society estimated that over 15.5 million American citizens were suffering from cancer as of January 2016, with over 1,688,780 new cancer cases expected to be diagnosed in 2017.

This growth in the number of cancer cases has a tremendous impact on the sales of cancer drugs across the globe. According to an article published in Nature Reviews, the pharmaceutical industrys 20 top-selling cancer drugs generate annual sales of over USD 50 billion worldwide, with Roche's Rituxan, Avastin, and Herceptin in the leading position generating USD 21 billion in sales.

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Requirement of Large Investments

The cytotoxic nature of HPAPIs presents significant handling challenges and thus requires heavy investments for implementing specialized containment facilities that facilitate the safety of employees from exposure.

Although the HPAPIs market is an emerging and growing market, pharmaceutical manufacturers face significant challenges in upgrading their existing facilities that are capable of handling only low- or medium-potency APIs. Specialized containment to ensure protection of the employees and their environment from exposure accounts for a major cost. Contract manufacturers are required to heavily invest in building new facilities that are designed specifically for HPAPI manufacturing apart from the usual GMP production facilities; investments may sometimes amount to millions of dollars.

Manufacturers may also be required to invest in specialized facilities for HPAPI-antibody conjugations that incorporate both potent-compound handling and biologics processing capabilities. For instance, in October 2015, ADC Biotechnology (UK), invested USD 10 million to build a manufacturing facility for advanced anti-cancer drugs. These requirements of large investments is likely to restrain the growth of this market.

Opportunity in Emerging Markets

Emerging economies such as India, China, and the Middle East present high growth opportunities for players in the HPAPIs market. In most of these geographies, the market is expected to show a high growth rate in the coming years owing to their huge population, increasing prosperity, and improving longevity (albeit at differing rates).

Diseases like musculoskeletal diseases, glaucoma, and specifically cancer have a significant impact on the health status of people worldwide, with comparatively higher growth rates in developing countries. According to the WHO, in 2014, nearly 66% of all cancer-related deaths occurred in developing countries. Additionally, according to GLOBOCAN 2012, a total of 6.8 million new cancer cases were reported in 2012 in Asia; this is expected to reach 8.4 million cases by 2020, indicating an increase of ~24%.

Furthermore, developing regions have lenient and flexible regulations, which make these markets highly lucrative for providers who are unable to meet the stringent standards set by the federal government in the US. Moreover, developing countries like India and China offer extremely low manufacturing and labor costs and highly skilled labor; this encourages players in developed regions to invest in this market.

Constant evolution of industry standards and technologies

One of the major challenges faced by the players in this market, especially CMOs that offer HPAPI manufacturing services, is the continual evolution of industry standards, technologies, and regulations. Companies that are willing to enter this marker are required to adopt these newer technologies, which generally translates to huge investments.

For example, SAFC (US) had to upgrade its HPAPI manufacturing facility in the US in 2016 to include more robust analytical technologies with improved sensitivity and detection levels that allow for the determination of potential API carryover at part-per-billion levels. Such a rapidly evolving environment poses a challenge to the players in this market.

Research Methodology Followed for This Study:

The study estimates the market size for 2018 and projects its demand till 2023. In the primary research process, various sources from both demand side and supply side were interviewed to obtain qualitative and quantitative information for the report. Primary sources from the demand side included hospitals, research institutes, and laboratories.

For the market estimation process, both top-down and bottom-up approaches were used to estimate and validate the market size of the HPAPI market as well as to estimate the market size of various other dependent submarkets. All possible parameters that affect the market covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data. This data was consolidated and added to detailed inputs and analysis from MarketsandMarkets and presented in this report.

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Secondary sources such as directories, databases, white papers, annual reports, company house documents, investor presentations, and SEC filings of companies were referred to. Some of the secondary sources include Active Pharmaceutical Ingredients Committee (APIC), Chemical Pharmaceutical Generic Association (CPA), Swiss Biotech Association, International Pharmaceutical Congress Advisory Association (IPCAA), World Health Organization (WHO), American Cancer Society (ACS), American Association for Cancer Research (AACR), Canadian Cancer Society, and European Association for Cancer Research (EACR).

High Potency APIs Market - Emerging Trends & Future Forecasts

 Increasing demand for oncology drugs

HPAPIs are extremely effective pharmacologically active ingredients. They are highly specific in their action and offer significant efficiency even at low daily therapeutic doses. HPAPIs have the ability to target precise disease cells and are, hence, used in formulations for highly potent drugs.

Owing to their target release characteristics, HPAPIs find major applications in target therapies for cancer. Globally, there is a significant growth in the incidence of cancer. According to the WHO, in 2012, there were 14.1 million new cancer cases, 8.2 million cancer deaths, and 32.6 million people living with cancer (within 5 years of diagnosis) worldwide. The American cancer Society estimated that over 15.5 million American citizens were suffering from cancer as of January 2016, with over 1,688,780 new cancer cases expected to be diagnosed in 2017.

This growth in the number of cancer cases has a tremendous impact on the sales of cancer drugs across the globe. According to an article published in Nature Reviews, the pharmaceutical industrys 20 top-selling cancer drugs generate annual sales of over USD 50 billion worldwide, with Roche's Rituxan, Avastin, and Herceptin in the leading position generating USD 21 billion in sales.

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Global Revenue Growth Expectations:

The global HPAPI market is expected to reach USD 26.84 Billion by 2023 from USD 16.49 Billion in 2017, at a CAGR 8.7%. The base year considered for the study is 2017 and the forecast period is from 2018 to 2023.

Requirement of large investments

The cytotoxic nature of HPAPIs presents significant handling challenges and thus requires heavy investments for implementing specialized containment facilities that facilitate the safety of employees from exposure.

Although the HPAPIs market is an emerging and growing market, pharmaceutical manufacturers face significant challenges in upgrading their existing facilities that are capable of handling only low- or medium-potency APIs. Specialized containment to ensure protection of the employees and their environment from exposure accounts for a major cost. Contract manufacturers are required to heavily invest in building new facilities that are designed specifically for HPAPI manufacturing apart from the usual GMP production facilities; investments may sometimes amount to millions of dollars.

Manufacturers may also be required to invest in specialized facilities for HPAPI-antibody conjugations that incorporate both potent-compound handling and biologics processing capabilities. For instance, in October 2015, ADC Biotechnology (UK), invested USD 10 million to build a manufacturing facility for advanced anti-cancer drugs. These requirements of large investments is likely to restrain the growth of this market.

Opportunity in emerging markets

Emerging economies such as India, China, and the Middle East present high growth opportunities for players in the HPAPIs market. In most of these geographies, the market is expected to show a high growth rate in the coming years owing to their huge population, increasing prosperity, and improving longevity (albeit at differing rates).

Diseases like musculoskeletal diseases, glaucoma, and specifically cancer have a significant impact on the health status of people worldwide, with comparatively higher growth rates in developing countries. According to the WHO, in 2014, nearly 66% of all cancer-related deaths occurred in developing countries. Additionally, according to GLOBOCAN 2012, a total of 6.8 million new cancer cases were reported in 2012 in Asia; this is expected to reach 8.4 million cases by 2020, indicating an increase of ~24%.

Furthermore, developing regions have lenient and flexible regulations, which make these markets highly lucrative for providers who are unable to meet the stringent standards set by the federal government in the US. Moreover, developing countries like India and China offer extremely low manufacturing and labor costs and highly skilled labor; this encourages players in developed regions to invest in this market.

Constant evolution of industry standards and technologies

One of the major challenges faced by the players in this market, especially CMOs that offer HPAPI manufacturing services, is the continual evolution of industry standards, technologies, and regulations. Companies that are willing to enter this marker are required to adopt these newer technologies, which generally translates to huge investments. For example, SAFC (US) had to upgrade its HPAPI manufacturing facility in the US in 2016 to include more robust analytical technologies with improved sensitivity and detection levels that allow for the determination of potential API carryover at part-per-billion levels. Such a rapidly evolving environment poses a challenge to the players in this market.

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The objectives of this study are as follows:

# To define, describe, and forecast the global HPAPI market on the basis of type, type of manufacturer, type of synthesis, therapeutic application, and region.

# To provide detailed information about factors influencing market growth (drivers, restraints, opportunities, and industry-specific challenges).

# To strategically analyze micromarkets with respect to the individual growth trends, prospects, and contributions to the overall market.

# To analyze market opportunities for stakeholders and provide details of the competitive landscape for key players.

# To forecast the size of the market segments of North America, Europe, Asia, and the Rest of the World (RoW).

# To profile key players and comprehensively analyze their product portfolios, market positions, and core competencies.

# To track and analyze competitive developments such as agreements, partnerships, collaborations, and alliances; mergers and acquisitions; expansions; and R&D activities in the global market.

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High Potency APIs Market - Global Companies Are Adopting Different Growth Strategies

 Expected Growth in Revenue Generation:

The Global High Potency APIs Market is expected to reach USD 26.84 Billion by 2023 from USD 17.72 Billion in 2018, at a CAGR 8.7%.

Growth Boosting Factors:

The growth in this market is driven by factors such as increasing demand for oncology drugs, growing demand for antibody-drug conjugates, increasing focus of leading pharmaceutical companies on HPAPIs, advancements in HPAPI manufacturing technologies, and growing focus on precision medicine.

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The innovative HPAPIs segment to dominate the market in 2018

Based on type, the High Potency APIs market is segmented into innovative and generic HPAPIs. In 2018, the innovative HPAPIs segment is expected to account for the largest share of the market. The large share can be attributed to the increased investments of innovator companies in R&D, manufacture, marketing, and supply of innovative HPAPIs as the revenue generated from these molecules are considerably high.

Based on type of manufacturer, the captive manufacturers segment to dominate the market in 2018

On the basis of type of manufacturer, the High Potency APIs market is segmented into captive HPAPI and merchant HPAPI manufacturers. In 2018, the captive HPAPI manufacturers segment is expected to account for the largest share of the market. The large share of this segment is attributed to the preference of innovative companies to maintain in-house manufacturing facilities for economic benefits.

The biotech HPAPIs segment is projected to grow at the highest CAGR during the forecast period.

On the basis of type of synthesis, the High Potency APIs market is categorized into synthetic and biotech HPAPIs. The biotech HPAPIs segment is expected to grow at the highest CAGR during the forecast period. Advances in biotechnology, growing demand for antibody-drug conjugates, growing demand due to their specificity in action, their similarity with the natural biological compounds, and significant growth in the demand for monoclonal antibodies are the major factors driving the growth of this market.

Geographical Growth Scenario:

North America to dominate the High Potency APIs market in 2018

In 2018, North America is expected to account for the largest share of the High Potency APIs Market followed by Europe. Factors such growing incidence of cancer, increasing investments in cancer research, technological advancements in HPAPI manufacturing, growing CMOs market, constructive government reforms like the Patient Protection and Affordable Care Act, growing focus of leading pharmaceutical companies in the HPAPIs segment, and increasing demand for antibody-drug conjugates (ADCs) are responsible for the large share of North America in the global HPAPIs market.

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Key Players:

The High Potency APIs market is fragmented, with the presence of several large as well as emerging players. Prominent players in the HPAPIs market include Pfizer (US), Novartis International AG (Switzerland), Sanofi (France), Boehringer Ingelheim (Germany), Bristol-Myers Squibb (US), Teva (Israel), Eli Lilly and Company (US), Merck (US), AbbVie (US), Mylan (US), and F. Hoffmann-La Roche (Switzerland). Players in this market are adopting various organic and inorganic strategies, such as agreements, collaborations, alliances, and partnerships; mergers and acquisitions; and expansions.

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