The size of the global Drug Discovery Services Market estimates and forecasts provided in this study are derived through a mix of the bottom-up approach (revenue share analysis of leading players) and top-down approach (assessment of utilization/adoption/penetration trends, by process, type, drug type, therapeutic area, company type, and region).
Data Triangulation:
After arriving at the market size, the total market was divided into several segments and subsegments. Data triangulation and market breakdown procedures were employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments.
Expected Revenue Growth:
The global drug discovery services market size is projected to reach USD 21.4 billion by 2025 from USD 11.1 billion in 2020, at a CAGR of 14.0% during the forecast period.
Major Growth Influencing Factors:
Growing R&D expenditure in the pharmaceutical & biopharmaceutical industry, thus necessitating increasing demand for outsourcing analytical testing and clinical trial services. Initiatives for research on rare diseases and orphan drugs, and focus on drug discovery are driving the growth of the global drug discovery services industry. Growth in biologics, patent expiries and emerging economies are expected to provide a wide range of growth opportunities for players in the market.
Restraints: High cost of drug discovery and development
Drug discovery and development involve high costs due to the high attrition rate of drug candidates in development. Since R&D for some rare diseases is very challenging and requires a specific group of people to conduct a clinical trial, drug R&D processes can be prone to failure. In addition, only 7 of 100 cancer drugs that reach the clinical testing phase end up gaining regulatory approval; most drugs fail long before this point. From drug discovery through FDA approval, developing a new medicine, on average, takes 10–15 years and costs USD 2.6 billion. Less than 12% of the candidate medicines that make it to phase I clinical trials are approved by the FDA (Source: Biopharmaceuticals in Perspective, Summer 2019).
Opportunity: Growth in biologics market
Many companies are investing heavily in the development of biologics. Currently, more than half of the drug candidates in the discovery stage are biologics, such as proteins, peptides, and monoclonal antibodies. As newer biologics are being discovered or are in the pipeline, pharmaceutical and biopharmaceutical companies are heavily investing in their R&D. CROs have also become important in this field as providers of specialized services, such as drug discovery services, for biologics.
According to the US FDA, the number of new biologic approvals in the US increased from 41 in 2014 to 59 in 2018. This is nearly double the 10-year (2009–2017) average of 33 new molecular entities (NME) approvals by the Center for Drug Evaluation and Research (CDER). Growing investments by biopharmaceutical companies to develop biologics are further expected to increase the number of approved products worldwide.
Geographical Growth Survey:
North America accounted for the largest share of the drug discovery services market in 2019
Based on the region, the global drug discovery services market is segmented into North America, Europe, the Asia Pacific, and Rest of the World. In 2019, North America accounted for the largest share of the drug discovery services market. The large share of this market segment can be attributed majorly to the presence of well-established CROs, rising R&D expenditure by pharmaceutical & biopharmaceutical companies, and the availability of latest techniques, instruments, and facilities for drug discovery research.
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