The Pharmaceutical Industry at a Glance Status of CDMO Utilization Environment in Japan

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Chie Yoshiura, Senior Researcher, Pharmaceutical and Industrial Policy Research Institute (PIIPRI)

SUMMARY

1. Introduction

In drug development, along with the accumulation of clinical and non-clinical data, the development of technologies related to product manufacturing is important. With the diversification of modalities in recent years, collaboration with contract development and manufacturing organizations (CDMOs) has become increasingly important as an option for pharmaceutical companies other than in-house manufacturing and technology development. CDMOs are positioned as an important element of the drug discovery ecosystem, a topic that is often discussed these days, and a comparison of CDMO utilization environments in product development with those in other countries may help to identify issues and set goals.

Recently, Evaluate released CDMO ^{IntelligenceⓇ}, a database of CDMO information, and we attempted to analyze the CDMO usage environment in Japan.
The number of CDMOs in each country is shown in the figure, but please note that this does not directly indicate the manufacturing capacity of each country, as the manufacturing capacity of each company has not yet been analyzed.

Survey Methodology

In this paper, we extracted information on the location of headquarters, offices, and contracted services for the 1,183 CDMOs listed as of July 2025 from Evaluate's CDMO ^{IntelligenceⓇ} database ^.1) In 3-1, we show the number of CDMO companies by nationality of headquarters location and by employee size. In 3-2, we focus on eight major drug discovery countries (Japan, the U.S., China, Germany, France, the U.K., Switzerland, and South Korea), and show the number of CDMO companies with offices in one of these countries and the number of CDMO companies by employee size. For CDMOs, the number of CDMO firms was tabulated by the contracted services offered by each firm. The number of CDMO firms that can be contracted for CMC services related to manufacturing and technological development (hereinafter referred to as "CMC services") for preclinical stage products is shown in 3-3, and the number of CDMO firms that can be contracted for clinical stage products is shown in 3-4. The number of CDMOs that can be contracted is also shown in the figure.

Results

3-1. Number of CDMOs by nationality and location of headquarters

Figure 1 shows the number of CDMO companies by nationality of headquarters location and Figure 2 shows the number of CDMO companies by employee size for the 1,183 CDMO companies that provided information on the nationality of headquarters location. Figure 1 shows the number of CDMOs by nationality of headquarters location, with the U.S. accounting for the largest number (over 400), followed by India, Germany, and Japan. The number of CDMO firms headquartered in the top 12 countries shown in Figure 1 accounted for more than 80% of the total number of CDMO firms extracted from CDMO ^{IntelligenceⓇ}. Figure 2 shows the number and percentage of CDMOs headquartered in these 12 countries by nationality and employee size. Nearly half of the CDMOs headquartered in the U.S. had 50 or fewer employees. The same was true in Germany and the U.K., where a relatively high percentage of CDMOs had 50 or fewer employees. On the other hand, the number of CDMOs with more than 1,000 employees by nationality of headquarters was higher in the U.S., India, and China, in that order, with large CDMOs with more than 1,000 employees accounting for more than 30% of the total number of domestic CDMOs in India and China.

3-2. Number of CDMO companies with offices in major drug discovery countries

According to the CDMO ^{IntelligenceⓇ} data on the location of each office, many CDMOs have advanced international expansion, with offices in several major drug discovery countries. In addition, Japanese and Chinese companies with their headquarters in the U.S. were also identified. Therefore, the number of CDMOs by nationality of headquarters in 3-1 does not directly correlate to the accessibility of CDMOs in the country. When considering the outsourcing of product and investigational new drug manufacturing and technical development work to CDMOs, we considered that CDMOs with offices in Japan could be considered as outsourcing partners with whom we could communicate more closely, especially on technical aspects. Figure 3 shows the number of CDMOs with offices in major drug discovery countries.

Figure 3 shows the number of CDMO firms with offices in one of the eight major drug discovery countries, broken down into firms with headquarters in the home country and foreign firms with offices other than in the home country (headquarters located outside the home country). Figure 4 shows the number of CDMO firms by employee size. The major drug-discovery countries with the largest number of CDMO firms headquartered in their home country were the United States, Germany, China, France, the United Kingdom, Japan, Switzerland, and South Korea, in that order, while the number of CDMO firms headquartered in Japan was smaller than in the other major drug-discovery countries, especially the number of foreign CDMO firms. By employee size, there were more than 30 large CDMOs with more than 1,000 employees with offices in the U.S., Germany, China, France, and the U.K., compared to 16 in Japan.

3-3. Number of CDMO companies contracted for pre-clinical stage manufacturing, technology development research, etc.

The CDMO ^{IntelligenceⓇ} contains information on contract services based on the publicly available information of each CDMO, and the information is further flagged by development stage and modality. Figure 5 shows the number of CDMOs offering CMC services for preclinical stage products by country, and Figure 6 shows the number of CDMOs by ^modality2). Figure 7 also shows the ratio of the number of companies in each country to the number of CDMO companies in the United States.

As a result, the number of CDMO companies in each country contracting preclinical CMC services is followed by the United Kingdom, Germany, China, and France, with Japan having about 20 fewer CDMO companies than these countries. When small molecules, antibodies or ADCs, cellular drugs, and gene therapy were counted as possible contract modalities, Japan had about 10 companies in each category. In terms of the ratio to the overwhelmingly large number of firms in the U.S., the number of firms in Japan contracting small molecules, cellular drugs, and gene therapy-related services was about 15% of those in the U.S., but less than 10% (8.6%) of antibody or ADC services were contracted in Japan.

3-4. Number of CDMOs contracted to manufacture investigational drugs at the clinical stage

Next, Figure 8 shows the number of CDMOs with offices in major drug discovery countries that offer CMC services such as investigational drug manufacturing for clinical-stage items as contract services, and Figure 9 shows the number of companies by API/formulation process and ^modality3). The ratio of the number of companies in each country to the number of CDMO companies in the U.S. is shown in Figure 10.

As a result, the number of CDMO companies presenting clinical-stage CMC services as contract services was, in descending order, the United States, Germany, China, the United Kingdom, France, and then Japan. In terms of the percentage of the number of CDMOs in the U.S., the number of CDMOs with offices in Japan that offer contract manufacturing services for small molecule API and cell API is approximately 20%, while the number of CDMOs that offer contract manufacturing services for the formulation process of small molecule drugs and biopharmaceuticals and for antibody or ADC API is approximately 10% of that in the U.S. In contrast, the number of CDMOs contracted for small molecule and biopharmaceutical formulation processes and antibody or ADC API manufacturing was about 10% of the U.S.

4. Summary and Discussion

In this paper, we attempted to examine the CDMO utilization environment in Japan and other major drug discovery countries by illustrating the number of CDMO companies in each country and the contract services offered by each company, ^using Evaluate's database ( ^{CDMOIntelligenceⓇ)}. As mentioned at the beginning of this paper, the number of CDMO companies does not directly indicate the manufacturing capacity, so the manufacturing capacity of each country is not discussed in this paper. On the other hand, from the standpoint of those who outsource manufacturing and technological development, the greater the number of CDMO companies, the greater the number of options available when considering outsourcing, and this paper analyzes and discusses them based on the number of companies.

As indicated in 3-1, the largest number of CDMOs by nationality of headquarters was in the United States. The number of CDMO firms indicates that the U.S. is the center of drug discovery, as some of the firms are headquartered in the U.S. and originate from other countries.

In 3-2, we counted the number of CDMOs with offices in each of the eight major drug discovery countries (the United States, Germany, China, France, the United Kingdom, Japan, Switzerland, and South Korea) by country. This report does not take into account the location of each CDMO's manufacturing facilities, and CMC operations are usually outsourced to foreign CDMOs. However, CDMOs with offices in the home country are more likely to provide detailed consultation, which may be advantageous for drug development by companies that do not have their own manufacturing-related resources or that are entering a new modality for the first time. The results of 3-2 suggest that the U.S. has an overwhelming advantage. Even if it is difficult to achieve the same level as the U.S., we hope that investment will be made to increase the number of CDMO companies beyond those in competing countries other than the U.S. in order to improve Japan's drug discovery capabilities. As shown in Figure 3, the number of foreign-owned CDMO companies in Japan was small compared to other countries. As shown in Figure 2, the national headquarters of large CDMOs with more than 1,000 employees were concentrated in the U.S., India, and China, but the number of CDMOs with offices in each country was more than 30 in major European drug discovery countries such as Germany, France, and the UK, and large CDMOs had established operations in these countries. The number of large CDMOs with offices in Japan was 16, of which 6 were headquartered in Japan, and the number of foreign-affiliated companies is currently low. Attracting foreign companies to Japan would be useful, as it would improve access to foreign manufacturing facilities if only the contact points of foreign CDMOs could be located in Japan.

Figures 3-3 and 3-4 show the number of CDMO companies by the contracted services offered by each company. The number of CDMOs with offices in Japan for preclinical and clinical CMC services, such as manufacturing-related technology development research and investigational new drug manufacturing, was lower than in other major drug discovery countries, with few companies offering preclinical CMC services. The United Kingdom followed the United States in the preclinical stage, suggesting the contribution of these countries to the success of drug discovery ventures. Furthermore, there are relatively few companies in Japan that provide preclinical CMC services for antibodies and ADCs, which may be an issue for the CDMO environment in Japan.

Although the difference in the number of clinical-stage CMC contract manufacturers compared to major drug discovery countries is smaller than in the preclinical stage, the number of CDMOs with offices in Japan is low at 55. In particular, the number of CDMOs contracted to perform formulation processes or CMC services for antibodies or ADC drug substances was relatively small, at about 10% of that in the United States. There were more than 30 CDMOs with business sites in Germany, China, and the UK as CDMOs that undertake CMC work for antibodies or ADC drug substances, but there were also about 10 companies in each country with headquarters in Germany, China, or the UK. Compared to these countries, Japan as a whole needs more support in the field of antibody or ADC API.

When considering the outsourcing of CDMOs, it is necessary to consider various factors, such as the availability of necessary facilities, appropriate manufacturing scale, ability to manufacture at the required time, and ability to guarantee quality. The number of CDMOs with offices in Japan is smaller than that of other countries, and it is likely that more CDMOs without their own manufacturing facilities are forced to consider outsourcing to overseas CDMOs than to major competitors in drug discovery. When entering a new modality or when a venture company does not have sufficient resources, such as facilities and human resources for CMC development, the challenges of outsourcing to overseas companies are added to the usual challenges of product development, leading to delays in the overall drug development plan, and thus putting Japan at a disadvantage. Japan is in a disadvantageous environment. As part of the drug discovery ecosystem, reinforcement of the CDMO utilization environment is strongly desired.

Conclusion

This paper discusses the utilization environment of CDMOs as CMC outsourcing partners based on the number of CDMO companies. As a result, the number of CDMO companies existing in Japan is small compared to other major drug discovery countries, especially the number of companies providing services related to antibodies or ADCs is small compared to major drug discovery countries. While the recognition of issues such as the development of biotech human resources and the response to these issues are steadily underway, we believe that we have once again demonstrated the current situation in Japan, and we will continue to monitor future trends closely.

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