Japanese pharma companies engage CDMOs earlier in development: Neuland Labs

With in-house capabilities strained by the growing complexity of peptide programs, Japanese pharmaceutical companies are engaging earlier in the process with contract development and manufacturing organizations (CDMOs), according to Neuland Laboratories.

The India-headquartered CDMO recently reported that it has seen a shift in demand over the past 12–24 months, with more early-stage programs in Japan seeking external support from outsourcing. Neuland Labs has observed an increase in peptide-related engagements from Japanese pharma companies, particularly at the preclinical and early clinical stages — where it contends technical requirements are more demanding.

“This trend is being driven in part by growing activity from venture-backed biotech companies and spinouts emerging from large pharmaceutical R&D organizations,” according to Neuland Labs. “As these programs advance into clinical development, demand for specialized CDMO capabilities is increasing.”

Peptide therapeutics are one of the fastest-growing segments in drug development, driven by the need for therapies in autoimmune conditions, metabolic disorders, and oncology. However, peptides — sequences of amino acids — are complex molecules that rely on their precise structure and purity to work effectively.

“The bottleneck isn’t discovery anymore, it’s execution,” Sharadsrikar Kotturi, chief scientific officer at Neuland Labs, said in a statement. “In peptides, programs are running into challenges around analytical complexity, scale-up and the availability of key raw materials such as protected amino acids.”

A recent report from Global Growth Insights found that the pharmaceutical industry overall represents nearly 72% of total peptide CDMO demand, with more than 60% of clinical peptide candidates originating from outsourced manufacturing partnerships due to the technical complexity involved.

The report also noted that approximately 55% of complex peptide development is outsourced to CDMOs, reflecting increasing demand from pharma companies for high-purity and long-chain synthesis.

Process complexity, production limitations

Long-chain and high-purity peptides are continuing to present technical challenges with approximately 32% of CDMOs citing batch variability and production scalability as significant hurdles, according to the Global Growth Insights report.

“The need for high-purity peptides accounts for over 65% of pharma-driven requirements, reinforcing why this segment remains the largest consumer of commercial and preclinical peptide production,” the report said.

At the same time, approximately 25% of operational pressures are tied to “stringent” purification requirements and the need for multi-step processes, the report found.

“These challenges increase overall production timelines, making consistency and yield optimization key concerns for manufacturers,” the report said. “With more than half of clinical peptide programs outsourced and complex synthesis requirements rising above 40%, CDMOs are strengthening capabilities in purification, automation, and specialized long-chain peptide production to support global development pipelines.” 

Japan’s market dynamics

When it comes the peptide CDMO market in Japan, it is expected to grow due to the country’s strong pharmaceutical industry, advanced technological capabilities, and significant investments in biopharmaceutical R&D, according to a report from Grand View Research.

In addition, the report said Japan’s aging population and increasing prevalence of chronic diseases are fueling demand for peptide therapeutics.

However, regulatory expectations are further adding to the burden on Japanese pharma companies, according to Neuland Labs.

“Demonstrating purity, consistency and process control to authorities such as Japan’s Pharmaceuticals and Medical Devices Agency requires extensive data, while shifting requirements introduce additional hurdles during development and approval,” Neuland Labs said.

At the same time, the company noted that pricing and regulatory pressures in Japan are increasing the operational demands on drug developers. “Frequent drug price revisions are pushing companies to improve cost efficiency, reinforcing the case for outsourcing.”