i. CMO industry size and growth

• Estimated 2010 market : Over 26 billion USD
• Trend to surpass 44 billion USD by 2015
• CAGR = 11%
• Most Pharma players confirm growing trend for outsourcing with objectives between 35% and 100% of total manufacturing for their mature small molecules products, Biologics and generics

ii. CMO industry drivers

• Cost saving

• Optimization of plant utilization to improve cost efficiency
• Benefit from CMO’s operational efficiency: competitive cost and improved margins

• Refocusing of resources

• Concentrate on core competencies such as developing new products, completing clinical trials and marketing
• Gain access to technical expertise and capabilities

• Freeing-up the asset base

• Achieving more flexible and efficient use of capital by transferring fixed costs to variable costs
• Increasing the ROI as a result of a reduced operating outlay

• Supply chain flexibility and effectiveness

• Expanding manufacturing footprint and securing proximity to markets
• Managed demand volatility for existing products as well as NPIs

• Supply chain and sourcing simplification/streamlining

• Access to a broad range of technologies and capabilities in one partner
• CMO consolidation/rationalization