How CDMOs Can Grow Through Consolidation

In recent years, the sector has seen a surge in consolidation deals—a clear sign that end-to-end service models are no longer optional, but essential. For CDMOs, consolidation is not just a response to market pressure. It’s a catalyst for sustainable growth.

The CDMO landscape and consolidation trends

The global CDMO industry is evolving rapidly. Increasingly, pharmaceutical and biotech companies are outsourcing not only for cost savings but also for strategic support across the development and manufacturing lifecycle. This shift places immense pressure on CDMOs to offer broader, more integrated capabilities.

Why is consolidation such a hot topic now?

• Rising complexity in drug development requires multidisciplinary expertise.
• Cost pressures and margin compression are driving efficiency-seeking behavior.
• Clients expect end-to-end solutions, spanning from Development, API Manufacturing, Drug Products Intermediates, FDF Manufacturing and even Commercial Services.

Recent consolidation activities underscore this trend:

• Lonza’s $1.2b acquisition of Genentech’s Vacaville biologics site (Oct.2024): Lonza strengthened its U.S. biologics footprint by acquiring one of the largest biologics manufacturing facilities globally, enhancing its capacity for large-scale production of complex biologics.
• MidEuropa’s Acquisition of a Controlling Stake in Famar (Oct.2024): MidEuropa completed the acquisition of a controlling stake in Famar, a well-established pharmaceutical CDMO. This investment aims to strengthen MidEuropa's position in the CDMO sector by acquiring Famar's broad range of services.
• Agilent Technologies’ acquisition of BIOVECTRA for $925 million (Sep.2024): Agilent Technologies expanded its CDMO capabilities in sterile fill-finish, plasmid DNA, mRNA, and lipid nanoparticle formulation.
• CoreRx’s acquisition of Societal CDMO for $165.7 million (Apr.2024): CoreRx completed its acquisition of Societal CDMO, an organization that's focused on small molecule therapeutics. This acquisition enhances CoreRx's formulation development and commercial manufacturing capabilities.
• Suven Pharmaceuticals’ Merger with Cohance Lifesciences (Feb.2024): Suven Pharmaceuticals merged with Cohance Lifesciences. Together, they offer contract drug production, specialty chemicals and API manufacturing. This aims to strengthen Suven's CDMO presence in APIs and specialty chemicals, including antibody-drug conjugates (ADCs).
• Olon Group’s acquisition of GTP Bioways (Jul.2024): Olon Group acquired GTP Bioways, a biotech CDMO specializing in R&D services, process development, and production of mAbs, enzymes, proteins, nanodrugs, ADCs, and fill-finish services. This acquisition expands Olon's capabilities in high-potency APIs and biologics.
   

Notably, Adragos Pharma has been highly active in the consolidation space:

• Acquisition of Halden Pharma from Fresenius Kabi (Mar.2024): Through a partnership with Prange Group, Adragos added the Halden, Norway site, enhancing its sterile production and packaging capacity across Europe. Adragos Pharma
• Acquisition of a Sanofi site in Kawagoe, Japan (Oct.2023): This marks Adragos’ entry into the Asian CDMO market, expanding its global footprint and reinforcing its commitment to geographic diversification.

These strategic moves reflect the industry's drive toward integrated, end-to-end service models, enabling CDMOs to meet the evolving demands of pharmaceutical clients.

Business case for CDMO consolidation

Consolidation is being driven by a combination of strategic, operational, and technological imperatives that are reshaping how CDMOs operate—and compete—in today’s market. 

Below, we outline the key drivers fueling this shift—and the tangible business benefits it can deliver.

One: Scale, efficiency and global reach

Large pharmaceutical clients are increasingly demanding integrated, end-to-end solutions for small molecules and biologics across the value chain, from development to commercialization. To remain competitive, CDMOs must:

•  Expand operational scale to handle multiple modalities
• Absorb and optimize costs through shared infrastructure
• Deliver at a global level, aligning with multinational pharma’s need for consistency across markets

Consolidation supports geographic expansion, therapeutic breadth, and scalable operations—making CDMOs stronger partners for global programs. 

Two: Competitive differentiation and market appeal

In a saturated market, differentiation is critical. Consolidation enables:

• Diversified service offerings, appealing to a wider range of clients and therapeutic areas
• End-to-end capabilities that improve client retention and long-term engagement
• Strategic positioning as full-solution partners, not transactional vendors
   

This greater “stickiness” not only enhances market visibility but also builds long-term commercial value.

Three: Supply chain resilience and cost mitigation

Post-pandemic realities have exposed major supply chain vulnerabilities. Larger, integrated CDMOs benefit from:

• Optimized procurement with improved pricing power and raw material access
• Redundant capacity across sites to ensure continuity during disruptions
• Broader sourcing networks, reducing dependency on single vendors
   

Consolidation allows CDMOs to turn supply chain reliability into a strategic advantage—something pharma clients now prioritize.

Four: Regulatory efficiency

Regulatory compliance remains one of the most resource-intensive aspects of CDMO operations. Consolidation offers:

• Standardized quality systems across sites to simplify audits and documentation
• Improved data integrity through harmonized digital platforms
• Broader regulatory expertise by merging diverse knowledge of global agencies (FDA, EMA, PMDA, etc.)
   

These efficiencies reduce overhead, accelerate timelines, and increase transparency—key for both compliance and trust.

Five: Investment in innovation

Consolidated CDMOs have the scale and capital to invest in advanced technologies that elevate their operating models:

• AI-driven quality control to boost batch predictability and reduce deviations
• Smart automation for faster, more consistent manufacturing
• End-to-end digital integration to enable real-time visibility, traceability, and smarter decision-making
   

As explored in our article "How Tech Is Reshaping the CDMO Landscape", these innovations are essential for future readiness and differentiation in an increasingly tech-driven sector.

Technology as a cornerstone of successful consolidation

Technology is not just a support function—it’s a growth enabler. As CDMOs scale through M&A, legacy systems and siloed data can become liabilities. That’s why building M&A-ready system architectures is critical.

Key criteria include:

• Global template solutions that unify core processes
• Simplicity and scalability to support rapid growth
• Automation readiness to reduce manual dependencies
• No data redundancy to ensure a single source of truth
• Avoidance of fragmented systems that create integration headaches
   

CDMOs must decide between suite ecosystems and best-of-breed solutions—each with its trade-offs. A proven approach like the Tenthpin Best Practice Template can accelerate transformation while avoiding common pitfalls.

From consolidation to strategic transformation

Consolidation is no longer just a response to market pressures—it’s a strategic pathway to long-term growth and leadership. When CDMOs integrate operations, scale capabilities, and invest in future-ready technologies, they evolve beyond service providers to become true strategic partners.

By aligning operational scale with technological maturity, integrated CDMOs deliver:

• Greater reliability in delivery and compliance
• Faster speed to market through streamlined, digitized processes
• Stronger collaboration potential for co-innovation and lifecycle support
   

This kind of value creation fosters deep trust and long-term relationships with pharmaceutical clients—enabling both parties to navigate complexity and capture new opportunities together.

But the journey doesn’t end with mergers and acquisitions. Success hinges on strategic integration, digital enablement, and a clear commitment to transformation. CDMOs that act boldly today—prioritizing scalable systems, regulatory agility, and client-centric innovation—will define the future of the Life Sciences value chain.