Contract development and manufacturing organizations (CDMOs) are more optimistic about reaching growth targets this year following unevenness experienced across CDMO and pharmaceutical markets in 2025. Yet, while certain CDMO segments are generally positive in 2026, recovery has been inconsistent between segments with growth varying based on modality, service focus, and customer segment, according to Simon-Kucher’s 2026 CDMO Growth Report. 

The consulting firm found that the uneven recovery is complicated by a disconnect between CDMOs and their pharma partners over the most important factors they believe will drive growth, as well as a gap between pharma’s expectations and how consistently CDMOs are perceived to deliver against them. In some cases, CDMOs are meeting pharma’s expectations less than half the time.  

“In the past, many companies could grow simply by participating in an expanding outsourcing market. But going forward, I believe that commercial execution will play a much bigger role,” says Kaan-Fabian Kekec, partner, Life Sciences division, Simon-Kucher. “It’s not just about having the right manufacturing capabilities anymore. It’s actually about identifying the right opportunities, understanding what customers really value, and being able to demonstrate why a CDMO is the right partner to a pharma counterpart.” 

How recovery looks in 2026 

The report compared CDMO growth expectations in 2026 for early-phase, late-phase, and end-to-end segments against 2025 targets. It observed that late-phase CDMOs were most likely to exceed last year’s targets, while early-phase CDMOs showed more mixed results, stemming from continued pressure on early-stage biotech funding, according to Kekec. 

“What is interesting is when we look at expectations that were raised at the beginning of this year captured in our report, confidence has been coming back, particularly among end-to-end CDMOs,” says Kekec. “Nevertheless, I would be a bit careful about interpreting this as a very broad-based recovery. One of the biggest changes we are seeing is that growth is becoming much more selective, which means that demand differs significantly depending on the modality, the development stage, and the customer segment.” 

The report also compared 2026 growth expectations of emerging biopharma and established pharma to 2025 growth targets. It found that established pharma was expected to exceed the 2025 targets by taking a cautious and disciplined approach through 2026. Meanwhile, emerging biopharma showed the strongest improvement outlook, reflecting room for recovery after a more mixed 2025 and continued reliance on external partners to advance pipelines, the report finds. 

Managing expectations 

Against this recovery backdrop, the report makes the case that commercial success of CDMOs and pharma will depend on aligning value propositions and go-to-market approaches with the distinct priorities of each customer segment. 

While companies surveyed for the report largely agree that the foundations of a strategic partnership hinge upon trust, transparency, long-term planning, and shared objectives, what pharma companies and CDMOs view as the most important factors driving growth in the industry is inconsistent. 

According to Simon-Kucher, CDMOs broadly view increasing capacity utilization through more targeted marketing and sales as the most significant growth driver. Meanwhile, established biopharma and emerging pharma instead view capacity expansion as well as price and mix improvement, respectively, as the most significant growth drivers for their CDMO partners. 

“When we look at what really matters in day-to-day collaboration, we start seeing some significant differences,” says Kekec. “For example, for established pharma working with late-phase CDMOs, we found that CDMOs place more than twice as much emphasis on meeting tight timelines as their customers actually do. At the same time, they significantly underestimate the importance of partnership-oriented pricing models.” 

Although CDMOs will stress the importance of their technical capabilities, speed, or manufacturing expertise in a partnership, their pharma partners are generally more interested in how contract manufacturers provide support in a fluctuating market. 

“How flexible can you be? How can we share risks? How predictable will my total costs be? And how can we structure a partnership that works for both sides? This is becoming a key difference that we observe between expectations from pharma and actual practices of CDMOs,” says Kekec. 

However, pharma’s expectations of its CDMO partners will vary widely across different segments and companies involved. 

“An emerging biotech company has a very different view and different priorities compared to an established pharma company. So, the commercial challenge is to move away from a one-size-fits-all value proposition and really understand what matters to each individual customer,” observes Kekec. “Ultimately, the best CDMOs won’t necessarily be those that promise the most. It will be those that understand what matters most. And I think this is what the industry needs to fix: listening a little bit better and making sure that there is a tailored offer that creates win-win partnerships.” 

Closing the gap 

Strategic alignment between CDMOs and pharma ultimately does not guarantee successful expectation fulfillment, the report finds. Across several industry segments, pharma respondents said their CDMO partners fell short of expectations, even in partnerships where goal alignment was strong.

For example, late-phase CDMOs working with established pharma had a goal alignment score of 77%, but an expectation fulfillment score of just 44%. Late-phase CDMOs working with emerging biopharma had an even stronger goal alignment score of 82%, but expectation fulfillment reached only 50%. Meanwhile, early-phase CDMOs partnered with established pharma had a goal alignment score of 83%, but the lowest expectation fulfillment score among the segments, only managing 40%.

“We looked into that and it’s not necessarily in the communication or the overall relationship. In fact, those are areas that perform relatively well,” says Kekec. “The biggest issues are often much more tangible: it’s pricing models, manufacturing scalability, flexibility, cost transparency, and the ability to deliver against high timelines, which is quite interesting because CDMOs tend to over-index tight timelines, but they are still not able to meet expectations from pharma on that dimension.” 

By comparison, early-phase CDMOs working with emerging biopharma achieved the highest expectation fulfillment score at 67%, though goal alignment between the two segments was the lowest with 62%. 

Kekec argues the execution gap stems in part from partnerships being fundamentally transactional in practice, despite both sides expressing interest in more integrated partnerships. 

“Both sides agree that they want a long-term partnership, but they haven’t necessarily defined what that means operationally or commercially,” Kekec says. “Who commits to what? How do we deal with changing demand? How do we share risks? What happens when timelines slip? And how do we measure whether the partnership is actually successful? These conversations often happen way too late and sometimes only after problems have emerged. Closing this execution gap requires moving beyond good intentions and translating these partnership ambitions into more concrete commitments and measurable outcomes.” 

That need to demonstrate value extends to how CDMOs address supply chain risk.  

Amid geopolitical uncertainty, 54% of pharma respondents expect to increase insourcing, while 58% expect CDMOs to demonstrate that they have maintained supply during previous disruptions. However, only 13% of CDMOs reported having measures in place to address that expectation, according to the report.  

This creates an opportunity for CDMOs to demonstrate their value to their pharma partners, Kekec contends. 

“In the future, pharma companies will be much more demanding when it comes to concrete evidence. So, just using the same value propositions and standard statements will not be enough. You need to convincingly demonstrate the benefits to the program of your pharma counterparts with concrete evidence,” he adds.