Putting a Spotlight on Formulation Services
The CDMO model is evolving to incorporate more innovative approaches and specialist capacity as a result of the increasingly complex development pipeline. In this article, The Pharma Navigator editors provide a snapshot of some of the news from CDMOs helping innovators with their formulation requirements.
Formulating a drug product is one of the most important parts of development and can determine whether or not a company will be triumphant when they seek commercialization. To be successful, a formulation must comprise the correct combination of active ingredients with excipients and inactive substances formulated in the optimum dosage form that is stable, safe, effective, and convenient to take or administer.
Given the cost, time, and level of expertise required to formulate drug products, many companies find it is more advantageous to enter into a contract with an outsourcing partner for formulation services. Thanks to the benefits companies can gain from outsourcing formulation development, the market for such services is growing — as reported by market researchers, who anticipate compound annual growth in the sector at a rate of 8.6% from 2025 to 2030 (1).
According to the market research, there are several factors leading to an increased demand for formulation development services. Some of the market growth drivers include a greater demand for new drug development, increased focus on regulatory requirements for quality, and the rise of specialty pharmaceuticals (1).
Valuable Yet Challenging Ingredients
As the prevalence of chronic diseases continues to rise, bio/pharmaceutical companies are developing innovative specialist treatment options that are both highly targeted and effective. Highly potent APIs (HPAPIs) are proving to be particularly valuable for companies in their endeavors to treat severe and rare diseases; however, these compounds pose unique safety challenges for those seeking to work with them.
Generally, HPAPIs are defined as having an eight-hour time-weighted occupational exposure limit (OEL) at or below 10 micrograms per cubic meter of air (2) and are classified into different occupational exposure bands (OEBs) depending on their potency. For ingredients that are considered to be the most potent, OEB-5 rating is used and means that the most stringent containment and safety measures need to be employed to protect operators.
In March, contract research, development, and manufacturing organization (CRDMO), BioDuro, opened a new laboratory in Shanghai capable of operating within OEB-5 (3). The specialized facility is equipped with isolators, closed-system reactors, and a dedicated high efficiency particular air (HEPA)-filtered heating, ventilation, and air conditioning (HVAC) system, so that highly potent compounds can be safely and efficiently produced.
Aimed at helping speed up discovery and early development programs for conjugated drugs, Dr. Armin Spura, CEO of BioDuro, explained that the new lab strengthens the CRDMO’s capabilities in the field of HPAPIs. “As demand continues to grow for complex conjugated therapeutics, we remain committed to enhancing our capabilities and capacities, providing integrated solutions across chemistry, biology, and DMPK to accelerate the delivery of innovative treatments for global patients,” he said in a company press release (3).
On the other side of the Pacific Ocean, in California, CDMO SK pharmteco also opened a new analytical testing laboratory dedicated to HPAPIs (4). The enhanced lab has been designed for the safe handling of potent chemicals for current good manufacturing practice (CGMP) testing and release and is also equipped to handle compounds in OEB-5.
Within Europe, AGC Pharma Chemicals have also upgraded their HPAPI capabilities at its Barcelona site. The enhancement to its facility, announced in January 2025 (5), means that the CDMO can offer a fully integrated containment system that can scale-up production from grams to tons.
This integrated approach represents the company’s commitment to supporting HPAPI development, commented Akihiro Kadokura, CEO at AGC Pharma Chemicals, in a company press release (5). “By offering an uninterrupted chain of capabilities together, we enable our partners to advance their high-potency compounds from initial grams through commercial tons, all within a single, trusted ecosystem,” he said.
Overcoming Solubility Issues
Poor aqueous solubility is a growing hinderance for drug developers as, according to current estimates, approximately 75% of new chemical entities under development are classed as being poorly soluble (6). Spray drying is a useful tool for developers to overcome the issue of poor solubility through the formation of pharmaceutical complexes or development of amorphous solid dispersion (ASD) forms (7).
To help overcome the challenges of poor solubility, end-to-end CDMO, Aenova, is expanding its Killorglin site in Ireland to incorporate a spray drying platform for ASDs and inhalation powders (8). Aimed at developing formulations that overcome the bioavailability challenges associated with poor solubility, the laboratory- and pilot-scale equipment will allow flexible development from early-stage research through to clinical supply.
“Bioavailability plays a pivotal role in the success of new pharmaceutical compounds,” explained Florent Bordet, Chief Scientific Officer at Aenova, in a company press release about the expansion (8). “With our new spray drying platform in Killorglin, we significantly expand our range of solutions to help customers overcome bioavailability hurdles and accelerate time-to-market.”
Earlier in 2025, Bend Bioscience also announced its expansion plans, comprising the addition of a commercial-scale PSD-4 spray dryer along with a Gerteis dry granulation system at its Gainesville, Ga., facility (9). With this new equipment, Bend can provide more technologically advanced absorption- and bioavailability-enhanced products from its facility. Additionally, the new capabilities complement the company’s clinical development expertise in spray dried dispersions in Bend, Ore., and strengthens its ability to support existing and new early-phase customers who require bioavailability solutions.
Furthermore, in June, Bend opened four new process development and manufacturing suites to support spray drying and unit operations (10). With these additions, the CDMO now has a total of seven suites that can provide innovators with support for their early-phase product development and manufacturing of enhanced dosage form products.
“We are proud to showcase both our state-of-the-art facility and equipment as well as our high science and high service culture that we employ to meet our customers key formulation development and manufacturing needs,” remarked Owen Murray, CEO of Bend Bioscience, in a press release (10). “This latest extension provides additional capacity and capabilities to meet growing demand from clients in the areas of particle engineering and spray drying for absorption enhancement and dry-powder inhalation.”
Becoming Leaders of Innovation
Over the years, it has been necessary for CDMOs to adapt to the new needs of sponsor companies — providing more than just manufacturing services for mature drug pipelines as was the case with more traditional business models (11). An industry trend that has led to a need for CDMO flexibility is the rise of novel therapeutic modalities, such as messenger RNA (mRNA), and cell and gene therapies.
Focusing on advancing DNA and RNA-based products, Lonza announced a collaboration with clinical-stage biotechnology company, Ethris, in April (12). The partnership is aimed at leveraging Lonza’s development expertise with Ethris’ proprietary technology platforms to develop room-temperature stable, spray-dried formulations of mRNA-based vaccine candidates that can be delivered through mucosal routes. There are clear benefits of developing a vaccine candidate that is stable at room temperature and does not need to be injected into patients — lower costs, simplified supply chains, patient convenience, etc.
“Spray-drying represents a well-established technique that addresses solubility and other manufacturing and stability challenges,” said Jan Vertommen, Vice President, Head of Commercial Development, Advanced Synthesis, Lonza, in a press release (12). “However, its application in the field of DNA and RNA-based products represents a highly innovative approach, with another level of complexity introduced by the presence of LNPs [lipid nanoparticles]. Combining the expertise of Lonza Bend site’s particle engineering team with the innovative SNIM RNA of Ethris, there is great potential to target unmet medical needs in the field of non-invasive vaccine delivery.”
Antibody-drug conjugates (ADCs), while promising for the treatment of various cancers, are challenging for developers who usually require the services of multiple partners to be able to perform all the necessary steps — conjugation, purification, fill/finish — for project completion. Seeking to streamline services for ADC innovators, Simtra BioPharma Solutions and Merck KGaA (known as Millipore Sigma in the U.S. and Canada) have joined forces, signing a five-year strategic partnership (13).
Through this strategic partnership, Simtra and Merck are hoping to create a turnkey offering for innovators requiring ADC and bioconjugation, linker/payload manufacturing, drug product formulation development, and fill/finish capabilities. “By bringing together two experts in the ADC value chain, biopharmaceutical companies should benefit from shorter timelines and less complexity, allowing them to focus their efforts on drug discovery,” remarked Franco Negron, CEO of Simtra BioPharma Solutions in a press release (13).
“Connecting the bioconjugation and fill/finish steps will be a value-add for our clients, ultimately meeting their ambitious timelines and allowing the broadest number of patients to benefit in the fastest and safest possible way,” added Benjamin Hein, Head of Life Science Services, Life Science business of Merck, in the press release (13).
Working in New Ways
“Modern biology has identified difficult to drug targets and these are requiring more and more complex molecules,” asserted Rod Ketner, Vice President, Business Operations, Serán Bioscience, in a fireside chat from the recent Drug Development and Delivery Insights for 2025 Day (14). “These complex molecules and their difficulty to deliver them are requiring innovative technologies and the application of existing technologies in new ways.”
Integrating physiologically based pharmacokinetic modeling with dissolution data is an approach that Serán takes to ensure it is possible to maximize clinical performance of a project by predicting and optimizing bioavailability and creating a suitably designed dosage form (15). “This approach of using science upfront to identify the right formulation from the start is an area where we specialize in — to bring our clients’ medicines to patients faster,” Ketner remarked in the exclusive one-day event (14).
According to Greg Behar, CEO of Recipharm, who also spoke during the Drug Development and Delivery Insights for 2025 Day (14), while there has been some turbulence for the CDMO industry, opportunities have also been created. “There are fundamental changes I would highlight,” he said, “now, [CDMOs] are looking at major challenges in speed to market because the amount of time you have to maximize the patents is low and also the amount of time you have to compete in a general sized market is even shorter than before.”
Compression of timelines is having a big impact on CDMOs, Behar asserted, bringing in the requirement for flexibility in development and cost consciousness. “This is where I think as CDMOs, we play a very important role to support,” he summarized (14).
References
Grand View Research. Formulation Development Outsourcing Market Size, Share and Trends Analysis Report by Service (Preformulation, Formulation Development), by Formulation, by Therapeutic Area, by End-use, by Region, and Segment Forecasts, 2025–2030. Market Research Report, May 2025.
Dunny, E.; O’Connor, I.; Bones, J. Containment Challenges in HPAPI Manufacture for ADC Generation. Drug Discov. Today, 2017, 22 (6), 947–951.
BioDuro. BioDuro opens Shanghai Laboratory for Highly Potent Compound Synthesis. Press Release, March 25, 2025.
SK pharmteco. SK pharmteco Launches State-of-the-Art HPAPI Laboratory. Press Release, Feb. 12, 2025.
AGC Pharma Chemicals. AGC Pharma Chemicals Announces Expansion of HPAPI Capabilities in Barcelona. Press Release, Jan. 25, 2025.
Lombardo, S.; Rametti, L.; Leroudier, J.; et al. How to Solve the Developability Challenges of Poorly Water Soluble New Chemical Entities for Oral Formulations. Am. Pharm. Rev. 2024, 27 (3), 48–52.
Jain, M.S.; Lohare, G.B.; Bari, M.M.; et al. Spray Drying in Pharmaceutical Industry: A Review. Research J. Pharma. Dosage Forms and Tech. 2011, 4 (2), 74–79.
Aenova. Aenova Launches New State-of-the-Art Spray Drying Platform at Killorglin Site. Press Release, July 21, 2025.
Bend Bioscience. Bend Bioscience Adds Commercial Spray Drying & Granulation in Georgia. Press Release, April 2, 2025.
Bend Bioscience. Bend Bioscience Opens 4 New Process Development & Manufacturing Suites in Oregon. Press Release, June 19, 2025.
Gonzalez, R. How CDMOs are Leading Innovation for Pharmaceutical Partners. Insights, EY-Parthenon, July 14, 2022.
Ethris. Ethris and Lonza Collaborate to Develop Spray-Dried mRNA Vaccines for Respiratory Disease Preventions. Press Release, April 7, 2025.
Simtra BioPharma Solutions. Simtra BioPharma Solutions and Millipore Sigma Announce Strategic Alliance for Antibody Drug Conjugates Drug Substance and Drug Product Manufacturing Services. Press Release, June 11, 2025.
Fierce Pharma. Drug Development and Delivery Insights for 2025 Day. Virtual Event, May 14, 2025.
The Pharma Navigator. Meeting Modern Needs: Top Insights from Drug Development and Delivery Insights for 2025 Day. Article, July 14, 2025.