Global Small Molecule API Industry Ready to Hit US$174 Billion by 2033, Fueled by a Steady 4.1% CAGR | Says FMI Experts

The Global Small Molecule API Industry is on the brink of a substantial growth trajectory, with industry projections showcasing a remarkable increase in revenue. According to the latest industry insights, the market is poised to generate USD 116 billion in 2023, with forecasts suggesting a significant surge to USD 174 billion by 2033.

This promising outlook is underlined by a projected compound annual growth rate (CAGR) of 4.1% during the forecast period, affirming the sector's sustained and robust expansion. The consistent growth reflects the industry's resilience and its ability to adapt to evolving healthcare needs, positioning it as a key player in the pharmaceutical landscape.

Small molecule drugs, distinguished by their low molecular weight, exhibit an enhanced ability to enter cells easily. Once inside, they can influence other molecules, particularly proteins, potentially inducing the demise of cancer cells. The escalating research focus on small molecule APIs and innovative Biologics APIs is expected to be a driving force behind the market's growth. Additionally, the burgeoning high-potency drug market, especially in the realm of oncology drugs and antibody-drug conjugates, is contributing significantly to the industry's expansion.

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The oncology market is growing enormously. High-potency drugs constitute significant new drugs that are under development. Small molecule demand still dominates the API market, however, new biological entity demand is also growing rapidly healthcare expenditure is resulting in new molecule discovery, the evaluation of various molecules for possible disease treatment, and the adoption of an innovative approach to these studies.

As increasing prevalence of chronic disorders like cardiovascular diseases, diabetes, cancer, and infectious diseases, and increasing research on small molecule APIs will boost the market growth. Besides this, government funding for API manufacturing units is also increasing in developing countries like India, Israel, and China. In May 2020, AstraZeneca recovered?the?global rights to?brazikumab from Allergan. Small molecule monoclonal antibody?is developed for Crohn’s Disease and Ulcerative Colitis and adds to their growing presence in Immunology

The coronavirus pandemic has changed public medical care needs and spending however this is viewed as a transient effect on the Small Molecule API market. The immense COVID-19 patient pool attracted the spotlight on the treatment of these patients, in turn increasing the demand for small molecule API.

Global Small Molecule API Industry Key Takeaways:

1. Revenue Surge: Projections reveal a substantial growth trajectory, with the market expected to generate US$ 116 billion in 2023, climbing to an impressive US$ 174 billion by 2033.
2. Steady Expansion: The compound annual growth rate (CAGR) for the small molecule API market is anticipated to be 4.1% during the forecast period, reflecting sustained and robust expansion.
3. Resilience and Adaptability: The market’s steady growth underscores its resilience and its ability to adapt to evolving healthcare needs, reinforcing its pivotal role in the pharmaceutical sector.
4. Small Molecule Drug Advantages: Small molecule drugs, with their low molecular weight, easily enter cells, impacting molecules like proteins and potentially leading to the demise of cancer cells.
5. Research Boosting Market Growth: Increasing research on small molecule APIs and novel Biologics APIs is expected to propel market growth, indicating a growing focus on innovation and advancement.
6. High-Potency Drug Market Growth: The high-potency drug market, a burgeoning pharmaceutical segment, is contributing to the overall expansion of the small molecule API industry.
7. Rising Demand for Oncology Drugs: The increasing prevalence of cancer and other chronic diseases is fueling the demand for oncology drugs and antibody-drug conjugates, further driving market growth.

 “The market is highly competitive, compelling the key players to aim at strategic partnerships. Some of the leading players have been focusing on strategic collaborations to expand their footprint and portfolio” says Sabyasachi Ghosh (Associate Vice President at Future Market Insights, Inc.) 

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The use of external resources (people, equipment, and/or expertise) to facilitate the preparation of Active Pharmaceutical Ingredients (API) or advanced intermediates has become a common practice for most pharmaceutical development organizations. In early development, the reasons to seek external support for the manufacture of API were attributed to several factors, including a lack of sufficient internal capacity, a need to source unique technical expertise, or a desire to achieve overall cost reductions.

For organizations that have no internal GMP manufacturing capabilities whatsoever (e.g. biotech companies), outsourcing is, of course, a necessity. However, companies that have some level of internal manufacturing capacity may have options to use outsourcing to their strategic advantage. This outsourcing capability has increased the source of generating more revenue for new emerging companies. For the fast growth of the industry, they follow outsourcing strategies.

In addition, key players in the Small Molecule API market are keenly focusing on carrying out strategic activities such as advanced technology for manufacturing, and acquisitions, to create a strong position in the market is leading to vigorous developments which is helping the market to grow at a considerable rate.

For Instance, In January 2020, Novartis acquired of operations of Aspen in Japan. This acquisition strengthened Sandoz’s position in the world market of off-patent medicines and generic drugs manufacturing.

Key Participant Insights

Various manufacturers are undergoing partnerships, collaborations, acquisitions, and distribution agreements to improve their market footprint.

For Instance, in December 2020, Pfizer Inc. and PostEra announced a strategic partnership to accelerate small molecule drug discovery by developing a platform technology based on generative chemistry.

Also, in January 2020, Merck announced its strategic collaboration for an oncology platform with Taiho Pharmaceutical Co, Ltd. And Taiho Pharmaceutical Co., Ltd to expand its focus on small molecule inhibitors for cancer research.

Key players in the Global Small Molecule API Industry are focusing on developing novel drugs due to their demand across various therapeutic areas. Some of the key players are

Hoffmann-La Roche Ltd, Albany Molecular Research Inc., AstraZeneca, Merck & Co., Inc., BASF SE, Teva Pharmaceutical Industries Ltd., Sanofi S.A., Pfizer Inc., Nanjing King-Friend Biochemical Pharmaceutical Co., Ltd., Novartis AG, Bristol-Myers Squibb, Boehringer Ingelheim GmbH, GlaxoSmithKline PLC, GILEAD Science Inc.,

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Global Small Molecule API Industry by Category Molecule Type

• Standard API
• HPAPI

Production

• Captive/In-House
• Out Source

Application

• Clinical
• Commercial

Therapeutic Area

• Cardiovascular Diseases
• Respiratory Disorders
• Infectious Diseases
• Metabolic Disorders
• Oncology
• Immunology
• Neurology
• Urology
• Dermatology
• Ophthalmology
• General Health
• Others

Author

Sabyasachi Ghosh (Associate Vice President at Future Market Insights, Inc.) holds over 12 years of experience in the Healthcare, Medical Devices, and Pharmaceutical industries. His curious and analytical nature helped him shape his career as a researcher.

Identifying key challenges faced by clients and devising robust, hypothesis-based solutions to empower them with strategic decision-making capabilities come naturally to him. His primary expertise lies in Market Entry and Expansion Strategy, Feasibility Studies, Competitive Intelligence, and Strategic Transformation.

Holding a degree in Microbiology, Sabyasachi has authored numerous publications and has been cited in journals, including The Journal of mHealth, ITN Online, and Spinal Surgery News.