EMERGING TRENDS in the GLOBAL APIs MARKET

Giugno 2017

The report deals with rawmaterials (active pharmaceutical ingredients, shortly APIs) used in theproduction of drugs for human dose, including both chemically synthesized APIsand biological APIs, in order to give a global overview on this market and its trends.

The main focus of thereport is on the following points:

- trends and market size of the chemicallysynthesized APIs and biotech APIs: overall biotech APIs demand has registeredfaster growth than chemical APIs in the past years, and this trend is destinedto continue in the future years. There are a series of drivers of the biotechAPIs market, including their ability to treat diseases that were previouslyuntreatable, their greater efficacy and efficiency when compared to chemicallysynthesized APIs, the increasing role of a series of niche market “emergingtherapies”, and of the biosimilar products as well. Though the market forbiosimilar APIs currently accounts for only 2.3% of the global biotech APIsmarket, it is projected to rise at an average 9% yearly over the next few years

- trends of the captive and merchant chemicallysynthesized APIs market: most biotech APIs are produced and used captively bybiopharmaceutical companies

- generic and brand APIs market trends and genericpenetration by geographical area

- world APIs consumption by therapeutic classes:overall the CNS, cardiovascular and oncology sectors altogether account forabout 43% of the global chemically synthesized APIs demand on a worldwidescale. Within the biotech APIs segment oncology makes the lion’s share: therange of diseases treatable with biotech APIs however is continuouslybroadening, including muscular dystrophies, skin injuries, Alzheimer and otherCNS related diseases, viral diseases, hepatitis, eye related diseases amongothers

- increasing competition in the global APIssupply, with a marked recovery of Western suppliers onto the highly regulatedmarkets (North America, Western Europe and Japan) at the expense of the low –cost Far Eastern APIs suppliers; also the Eastern European countries (Poland,the Czech Republic and Slovakia) are increasingly becoming reliable alternativeAPIs source to Far Eastern companies, though, at least for the moment, albeitfrom a much lower basis. In addition, a number of “second wave niche APIssuppliers” are emerging in Asia – Pacificas competitors of giants India and China, both in the chemical APIs andin the biotech APIs market

- the increasing role of CDMOs (ContractDevelopment and Manufacturing Organizations): a CDMO operates one or more up tototal phases of the process, from new drug discovery, pre – clinical andclinical trials, API manufacturing, final formulation and packaging of thefinished dosage form. The CDOMs’ business is driven by a series of factors...

- the increasing tendency towards mergers andacquisition (M&A): in its first phase the M&A phenomenon implies equitytrading, but successively a deep technological innovation, with the knockingout of smaller competitors

- the increasing role of the “emerging therapies”

- the emerging importance of therapeutic peptides,or biologically occurring short chains of amino-acid monomers linked by apeptide bond. The main drivers of the therapeutic peptides market are theirefficacy and high selectivity in managing numerous disease indications, theirtolerability by patients, recent advances in peptide synthesis technology amongothers