Analysis of FDA drug approvals indicates favorable longer-term trend for CDMOs

Contract development and manufacturing organizations (CDMOs) are reaping the benefits of new drug approvals by the U.S. Food and Drug Administration, which bodes well for the pharmaceutical outsourcing and services sector, say William Blair analysts. 

“Looking over the drugs approved by the FDA since 2015, we analyzed the portion that relies on CDMOs for either/both active pharmaceutical ingredients (API or drug substance) and finished dose (drug product) and how this tendency differs by size of the innovator,” the analysts wrote. “The key conclusion, in our view, is that outsourcing penetration has accelerated to reach record highs over the last two years.” 

Their analysis found the 73% of FDA approvals that outsourced API manufacturing in 2025 were substantially above the 11-year average of 61% and in line with the 74% outsourcing rate recorded in 2024 — the highest level observed since 2015. 

In the case of finished dose, the 65% of drugs outsourced last year represented the highest outsourcing rate the analysts have documented over an 11-year period — significantly exceeding the 50% average since 2015. 

Leaders of the CDMO pack 

The three leading CDMOs continue to be Lonza, Thermo Fisher Scientific’s Patheon, and Catalent, according to the analysts. Their report shows that Thermo Fisher’s Patheon and Catalent “stand out” when it comes to finished dose outsourcing with 19% share and 15% share, respectively, since 2015.  

“Following these leaders, there is a major drop-off to the 5% share of outsourced approvals accounted for by the next largest CDMO, Almac (including 7% in the small molecule arena),” the analysts said. “Vetter also has 5% overall finished dose market share but is a significant player in large molecule finished dose with 12% share since 2015.” 

While Lonza continues to be the largest API player, tied with Patheon for overall share but the dominant number one in biologics, the analysis found that Lonza’s share of approvals in 2025 was relatively modest at 5% and flat with 2024. Still, the analysts said they are “bullish” about Lonza’s ability to continue to fortify its position as a top drug substance CDMO, given its $1.2 billion acquisition of a large-scale mammalian facility in Vacaville, California from Roche in 2024. 

Overall, the purpose of their analysis was to get a better understanding of which CDMOs were “winning the commercial mandates to produce the products approved in any given year,” the analysts wrote. 

The report concludes that Thermo’s Patheon appears to have been most effective to date building a broad offering across API and finished dose for both small molecule drugs and biologics. While Patheon is tied with Lonza for first place in API with 7% market share, it has the leading place in finished dose for both biologics (13% share) and small molecules (22% share).  

Catalent holds a 15% share of the finished dose market and came in second place behind Thermo’s Patheon in both small molecules (18% share) and biologics (12% share, tied with Vetter). In 2025, Catalent’s share of finished dose manufacturing approvals was 20%, significantly above the 14% seen in 2024 and the 17% average observed since 2017, the analysts noted. 

Small molecules vs. biologics 

Last year saw improvements in outsourcing penetration for small molecules — 89% in 2025 compared to the 77% average since 2015 — and biologics, which represented 55% in 2025 versus the 44% average since 2015). 

“The 89% outsourcing rate observed in 2025 is highest rate of small molecule API outsourcing penetration on record, representing an impressive 12-point increase over the 11-year average and a 2-point sequential increase over the previous high of 87% observed in 2024,” the analysts wrote. 

Thermo Fisher’s Patheon, AGC Biologics, and Rentschler Biopharma each received more than 5% of biologic drug approvals, though the analysts noted that the sample size of biologics approvals was only about half of the size of the small molecule API sample size. 

2025 was the third consecutive year that small molecule drugs increased as a percentage of FDA approvals, with last year’s 55% in line with the 56% average over the last 11 years, according to the analysis. CDMOs focusing on small molecule drugs, such as Siegfried, should continue to be well positioned “given a greater propensity for drug developers to outsource production of these products once approved,” the analysts wrote. 

Biologics comprised 45% of the FDA’s drug approvals last year, which the analysts observed “represents a two-percentage-point decrease compared to 2024 and a 12-percentage-point decrease compared to the 57% high observed in 2022.” Nonetheless, they expect biologics to account for the majority of the agency’s approvals longer term, as newer modalities such as cell and gene therapies gain traction. 

Fragmentation and size 

Despite consolidation in recent years, the analysis called out how fragmented the CDMO industry remains, noting that the top 19 CDMOs since 2015 only account for 50% of FDA approvals with the remaining half supported by CDMOs with less than 2% market share each. 

“Small and midsize innovators continue to outsource both API and finished dose production of their drugs far more often than large innovators, which when combined with our view that approvals will increasingly come from smaller innovators, appears to be a very favorable longer-term trend for CDMOs,” the analysts concluded.  

In the API space, the analysts pointed to the fact that Lonza — the largest CDMO — had only 7% share of approvals since 2015 (16% of biologics and 2% of small molecules) with Thermo’s Patheon approximately tied with a 7% share of outsourced API production, while all remaining CDMOs have 4% market share or less. 

Lonza is the clear leader in the large molecule API category, accounting for 16% of biologic drug API approvals since 2015, according to the analysis. Thermo’s Patheon, AGC Biologics, and Rentschler each received more than 5% of biologic drug approvals, though the analysts noted that the sample size of biologics approvals is only around half of the size of our small molecule API sample size. 

The analysis shows that the finished-dose CDMO market is fragmented, though less so by comparison to the API market. Since 2015, the top three CDMOs have almost 40% share of the market. 

“Thermo Fisher/Patheon leads the pack, with Catalent (acquired by Novo Holdings) in second place, and U.K.-based Almac as the third biggest by share,” the analysts wrote. “These three companies are followed by a cluster of other CDMOs with market share of 5% or less, including Vetter, Ajinomoto, Alcami, PCI Pharma Services, and Piramal.” 

Small molecule finished dose is led by Thermo Fisher’s Patheon, Catalent, and Almac, which together represent almost 50% of the market, while the other half is fragmented with all other CDMOs accounting for 3% or less of outsourced finished dose manufacturing for new small molecule approvals since 2015. 

“Large molecule finished dose is dominated by four players — Thermo Fisher/Patheon, Catalent, Vetter, and Ajinomoto, which together account for slightly over 40% of approvals,” according to the analysts. “The remainder of the outsourced market remains fragmented, similar to the market for small molecules.”