The country’s contract research development and manufacturing organisation (CRDMO) sector, which is estimated at $3 billion, is expected to grow at an 18% CAGR (compounded annual growth rate) between FY25 and FY30. This will be higher than the 14% growth rate seen in the past five years, according to a report by Jefferies.
The accelerated growth is attributed to strong pipeline visibility, Big Pharma diversification (China+1 strategy), and weight loss/type-2 diabetes drugs, the report added.
From Sidekick to Strategic Partner
The CRDMO industry has evolved from being perceived as quasi-chemical firms till a few years ago to strategic partners for global pharma innovators. “From being known as a sidekick of the pharma industry to now being in the global spotlight, the Indian CRDMO is fetching investor attention like global peers, with industry market cap now at $40-50 billion,” the report said.
Fuelling this growth is the geopolitical tensions in the past few years that prompted US pharma companies to shift their focus from China to alternative markets. Indian CRDMOs, with their strong small-molecule capabilities and established track record in the segment, are well-positioned to capture this opportunity, the report said. Jefferies further said this structural shift will continue for more than a decade, but added that rising in-licensing deals by Big Pharma with Chinese firms could pose a risk.
Opportunities in Obesity, Diabetes and ADCs
The report further said that a shift in the treatments for type 2 diabetes and obesity can benefit Indian CRDMOs. For instance, there are over 170 GLP-1 receptor agonists in development with many in advanced trial stages. As the market shifts from Semaglutide to next-gen drugs like Tirzepatide and Orforglipron, Indian CRDMOs stand to benefit significantly, especially in intermediates manufacturing.
Additionally, in the antibody drug conjugates (ADCs) space, which is advanced biologic therapies that deliver drugs directly to cancer cells using monoclonal antibodies, there are 639 drugs under development with just 15 approved globally.
“The ADC CRDMO market, currently valued at $1.4 billion, is driven by early-stage clinical work but is projected to grow at a 23% CAGR to be $4-billion opportunity by 2029. In our view, Cohance and Piramal Pharma are the best way to play the ADC theme,” the report stated.
The number of new drug launches in the Indian pharma sector seems to favour CRDMOs in a big way. In 2024, there were 1,568 launches — the highest in the past nine years. “For CDMOs, this trend is particularly favourable as each new launch represents a transition from development to commercial production. The rising launch count also encourages CDMOs to invest in capacity expansion and advanced technologies to meet growing client demand,” Jefferies said.