Drug Discovery Services Market Revenue & Gross Margin, Opportunities, Challenges and Risks Analysis Report 2023-2028
Drug Discovery Services Market in terms of revenue was estimated to be worth $20.6 billion in 2023 and is poised to reach $41.3 billion by 2028, growing at a CAGR of 14.9% from 2023 to 2028 according to a new report by MarketsandMarkets™. Factors such as growing R&D expenditure from pharmaceutical and biopharmaceutical companies, the increasing R&D pipeline creating a need for increased analytical testing outsourcing, initiatives for research on rare diseases and orphan drugs, and the high cost of in-house drug development are positively driving the growth of the drug discovery services market. Additionally, technological advancements, the introduction of new drug discovery techniques, the expiry of patents, and rising demand for specialized testing services among end users are expected to offer growth opportunities to players in this market.
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The chemistry services segment accounted for the largest share of the type of segment in the drug discovery services market in 2022.
Based on type, the drug discovery services market is segmented into chemistry and biology services. The chemistry services segment commanded the largest share of this market in 2022. Growth in this market segment is mainly due to the vast application of chemistry services in multiple early drug development phases to deliver robust candidates for drug discovery. The capacious use of chemistry in academics & research institutes, biotechnology companies, and large scale pharmaceutical companies also support the market growth.
The biologics segment accounted for the fastest growing share of the drug type segment in the drug discovery services market in 2022.
Based on drug type the drug discovery services is segmented into small-molecule drugs and biologics. The fast growth of this segment can be attributed to increasing number of biologics in the pipeline, the increasing focus of biopharmaceutical companies on developing biologics for various therapeutic areas, the development of biologics, the high cost of biologics development, the complexity of the biologic drugs, and safety and manufacturing challenges associated with biologics are driving pharma biotech companies to outsource biologic drug discovery and development to experienced service providers.
The Asia Pacific region is the fastest-growing region of the drug discovery services market in 2022.
Based on the region, the drug discovery market is segmented into five major regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The Asia Pacific market is estimated to register the highest growth during the forecast period primarily due to emerging middle class, rising government spending for pharmaceutical R&D, growing therapeutic area expertise, and rapid expansion of pharmaceutical and biopharmaceutical industry in the region.
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Drug Discovery Services Market Dynamics:
Drivers:
- Growing R&D expenditure in pharma-biotech sector
- Increasing drug R&D pipeline and rising reliance on outsourcing
- Initiatives for research on rare diseases and orphan drugs
- High cost of in-house drug development
Restraints:
- Stringent regulations governing drug discovery and animal usage
Opportunities:
- Technological advancements and new drug discovery techniques
- Rising demand for specialized testing services among end users
- Patent expiries of key biologics
- High growth prospects in emerging markets
Challenges:
- Shortage of skilled personnel
Trends:
- Adoption of AI in drug discovery
- Increased outsourcing to emerging Asian economies
- CRO industry consolidation
- Integrated end-to-end R&D service offerings
Key Market Players:
Key players in the drug discovery service Market include Laboratory Corporation of America Holdings (US), Charles River Laboratories International Inc. (US), WuXi AppTec (China), and Thermo Fisher Scientific Inc (US).
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