U.S. Small Molecule Innovator API CDMO Market Size, Share & Trends Analysis Report By Stage Type (Preclinical, Clinical, Commercial), By Service, By Customer Type, By Therapeutic Area, By Region, And Segment Forecasts
Published Date: May - 2025 | Publisher: MIR | No of Pages: 240 | Industry: healthcare | Format: Report available in PDF / Excel Format
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The U.S. small molecule innovator API CDMO market size was estimated at USD 8.80 billion in 2024 and is projected to grow at a CAGR of 6.0% from 2025 to 2030. Key growth drivers include rising outsourcing by pharmaceutical companies, demand for small-molecule drugs, and the number of clinical trials in the country. Further, increasing pharma R&D spending to fuel the growth of new small-molecule innovator APIs, escalating demand for new therapies, and increasing incidence of cancer and age-related diseases are some of the most important factors fueling the overall market growth.
The increasing incidence of orphan diseases, the significant presence of established pharmaceutical firms, and the establishment of R&D and manufacturing centers in the U.S. are some of the key drivers anticipated to fuel market growth during the forecast period. Additionally, the increasing trend of drug discovery and upcoming R&D activities are anticipated to enhance market growth prospects in the near future. For example, in March 2023, Catalent, Inc. partnered with Grunenthal for an oral dose small molecule in Grunenthal's pipeline. This partnership provided the company's operating strength in the U.S. market.
Small-molecule medicines continue to reign the pharmaceutical drug pipeline and approvals, thus enabling multiple companies to focus on developing new small-molecule medicines to meet extensive medical needs. Consequently, there is a continuous need for API CDMOs that can produce these active ingredients cost-effectively and efficiently, thus driving industry demand forward. For example, according to U.S. FDA statistics, in 2024, the U.S. FDA approved 50 new drugs, a decrease from the 55 approvals seen in 2023. This is the second-highest annual total in the last three decades. Of these, 31 were small molecules, representing 62% of the total approvals in 2024. Therefore, a surge in the product pipeline & approvals is expected to support the overall market growth.
The biopharmaceutical & biotechnology sector and CDMOs of the United States receive significant investments due to the growing incidence of cancer, cardiovascular diseases, respiratory disorders, infectious diseases, and a number of others is likely to provide significant growth opportunities for CDMOs to create new small-molecule innovative API drugs. In addition, various pharmaceutical firms and CDMOs are engaged in mergers and acquisitions of small-scale firms to enhance their service capabilities, geographic reach, & operating capabilities. For example, Bristol Myers Squibb acquired Karuna Therapeutics in March 2024. This acquisition bolstered BMS's Neuroscience Portfolio.
The increased R&D for small-molecule medicines have enhanced the demand for contract development and manufacturing services since pharmaceutical firms need specialized knowledge, scalability, and cost-effectiveness. For example, in September 2024, PCI Pharma Services, a leading contract development and manufacturing organization, spent over USD 365 million to increase its U.S. and European facilities. The project is designed to improve clinical trial supply management capacity and large-scale commercial manufacturing. With this investment, the company is targeting advanced drug delivery systems that enhance treatment effectiveness and patient convenience.
Report Coverage & Deliverables
PDF report & online dashboard will help you understand
- Competitive benchmarking
- Historical data & forecasts
- Company revenue shares
- Regional opportunities
- Latest trends & dynamics
U.S. Tariff Impact & Strategic Opportunity Analysis
The application of U.S. tariffs on pharmaceutical imports especially from major manufacturing economies like China and India has had a significant effect on the U.S. small molecule innovator API CDMO market. The tariffs have raised the cost of raw materials and intermediates, upsetting established supply chains and forcing U.S. based innovators to go in search of alternative sourcing arrangements. Domestic CDMOs, in turn, will see demand rising due to the biopharma industry reshoring API manufacturing in a bid to minimize geopolitical and cost risks.
This evolving trade environment is also opening the door for American CDMOs to gain larger market share through localized, duty-free manufacturing. The market is seeing higher investment in infrastructure capacity growth and upgrade to accommodate heightened demand. In addition, innovators are favoring CDMOs with leading-edge process development and regulatory capabilities to speed up timelines and offset tariff-related delays. Although tariffs create short-term cost pressures, they are also driving long-term structural changes that benefit U.S.-based API development and manufacturing service providers. This alignment bolsters domestic supply chain resilience, boosts reshoring efforts, and enhances the U.S. leadership in global pharmaceutical manufacturing.
Technological Advancements
The U.S. API CDMO market for small molecules innovators is undergoing tremendous change fueled by continuous tech advancements, growing drug development complexity, elevated regulatory demands, and a growing need for faster time-to-market. A number of CDMOs are increasingly leveraging AI to make drug development more efficient. Applications of AI include speeding up clinical trial procedures to enhanced drug safety reporting and medical imaging analysis. For example, artificial intelligence can help detect cancer early through the detection of abnormalities in X-rays that may not be visible to the human eye.
The sector is increasingly embracing digital technologies under the umbrella of Pharma 4.0 to boost productivity and respond better to patient needs. The shift is focused on streamlining drug development processes, enhancing cost-effectiveness, and pursuing a more patient-centric strategy without compromising quality and regulatory compliance standards. In addition, continuous manufacturing is on the rise with streamlined manufacturing coupled with real-time monitoring and control of Critical Process Parameters (CPPs), keeping pace with Quality by Design (QbD) philosophy. CDMOs are applying Process Analytical Technology (PAT), multivariate data analysis (MVDA), and spectroscopic methods like Near-Infrared (NIR) and Raman spectroscopy for process control and quality assurance.
High-throughput screening (HTS), with sophisticated assay formats, enhances drug discovery and optimization of formulations. Imaging technologies such as NIR and Raman Chemical Imaging, with chemometrics, offer spatially resolved material information. Mass spectrometry (MS), including HRMS, tandem MS, and hyphenated methodologies like LC-MS, GC-MS, plays a key role in analytical development for structural characterization, impurity profiling, and pharmacokinetics.
NMR spectroscopy in high-field, multi-nuclear, solid-state, and DNP-capable variants provides profound structural information, while hyphenated NMR platforms enhance data productivity. In parallel, X-ray crystallography, augmented by synchrotron sources, serial methods, and in situ approaches, enables polymorph analysis and structure-based drug design. Together, these advances increase process efficiency, regulatory compliance, and the scientific consistency of API development in the U.S. small molecule innovator API CDMO sector.
Pricing Analysis
The API services market for small molecule innovators is undergoing intense innovation and continuous evolution to address the increasing needs for innovation, efficiency, and regulatory compliance. Important developments in lead optimization, formulation development, and process optimization have resulted in increased sensitivity and specificity of small molecules. For example, incorporation of High-Throughput Screening (HTS) platforms to find promising drug candidates, while continuous manufacturing systems simplify production processes, minimizing variability and maximizing efficiency.
The U.S. API CDMO market for small molecule innovator is experiencing a moderate level of M&A activities. Strategic acquisitions to expand service offerings like large molecule bioanalysis, cell & gene therapy testing, and immunogenicity assays. For example, in March 2024, Pace Analytical Services announced the acquisition of Lebanon, a New Jersey-based laboratory facility from Curia. The acquisition was focused on assisting emerging drug development partners with quick and skilled development and commercial analytical laboratory services throughout the biopharma sector.
Ongoing regulatory reforms are significantly influencing the U.S. small molecule innovator API CDMO market by setting strict quality benchmarks, approval procedures, and production practices. Adherence to strict U.S. FDA and cGMP regulations to ensure product safety, efficacy, and access to markets, promoting market growth. Regulatory intricacies, including intellectual property protection and environmental standards, prompt pharmaceutical firms to outsource development and manufacturing functions. Although costs of compliance will rise, they also encourage innovation, build high barriers to entry, and present opportunities for CDMOs with strong regulatory competency to win long-term contracts from pharmaceutical innovators.
The U.S. small molecule innovator API CDMO landscape is defined by heightened demand for high-potency API (HPAPI) capacity, cGMP regulatory-compliant facilities, and vertically integrated development-to-commercialization offerings. CDMOs are enriching service platforms through capacity growth, containment specialties, and continuous manufacturing technologies. Additionally, escalating biotech pipelines, fast-tracked FDA options, and resourcing trends in reshoring are fueling localization of services as well as partnership and innovation-seeking partnerships, cementing the United States as a central hub for small molecule innovator API development.
There is a dominant presence of major market players in the U.S. These players are implementing various strategies like collaborations, partnerships, and acquisitions to increase geographical presence and operational capabilities in the U.S. For example, Cambrex Corporation in October 2023 completed a USD 38 million-capacity expansion of its small molecule API manufacturing plant in North Carolina. This growth caused the manufacturing capacity of the facility to double. The facility contained state-of-the-art analytical & chemical development labs, two further clinical manufacturing suites, and the addition of a small-scale commercial manufacturing facility with three work centers and 2,000 L reactors. Such strategic efforts were meant to enhance service capabilities, drive time-to-market, and gain competitive advantage in the fast-growing small molecule innovator API services industry.
Stage Type Insights
The clinical segment is also sub-segmented into Phase I, Phase II, and Phase III. The clinical segment led the market with a revenue share of 54.68% in 2024. The segment growth is fueled by the increasing small molecule product pipeline and the launch of new drugs. For example, Lonza reported that, small molecules are the biggest single drug class in the clinical stage, with over 50% of clinical pipelines. In addition, swift progress in structure-based design, prediction, imaging, Artificial Intelligence (AI), automation, and machine learning have emerged as key drivers for small molecule-driven optimization to boost speed and improve success rates in pharmaceutical firms.
In clinical segment, Phase III trials were the market leaders in 2024. Growth of the segment is due to growing number of late-stage pipeline products and the growing outsourcing of complex API production by pharmaceutical companies. With improved clinical success rates, innovators depend on CDMOs with large-scale abilities, regulatory competence, and quick turnaround to address commercialization timelines. Increase in R&D expenditure and need for faster cost-effective development routes for new small molecule drugs are driving segmental demand.
The commercial segment is predicted to experience the highest CAGR during the forecast period. Rising demand for innovative API of new small molecules within the pharmaceuticals industry is boosting commercial CDMOs to build up their offerings, which in turn is set to drive the market. CDMOs enable pharmaceutical firms to meet existing Good Manufacturing Practices (cGMPs) and possess capabilities enabling smooth scaling up of production from laboratory to commercial scale, supporting pharmaceutical/biotechnological producers and thereby enhancing segment growth in turn. For example, during June 2024, Siegfried signed a binding deal with Curia Global to buy an early-phase contract development and manufacturing organization (CDMO) facility in Grafton, Wisconsin, USA. This acquisition is intended to broaden Siegfried's drug substance service capabilities.
Service Insights
The contract manufacturing segment led in the U.S. small molecule innovator API CDMO market in 2024. The growth of the segment is attributed to increased demand for cost-effective, scalable production. Biopharma and pharma businesses increasingly outsource API production to CDMOs to concentrate on core R&D, minimize operational load, and comply with intricate regulatory requirements. Moreover, increased pipeline of small molecule drugs, capacity additions by CDMOs, and requirement for GMP-compliant facilities are fueling segment revenue growth.
Conversely, the process development segment is experiencing strong growth during the forecast period. The increasing demand for efficient, scalable, and low-cost manufacturing solutions propels the segment growth. Since pharma companies are speeding up R&D for challenging molecules, more and more dependency is placed upon CDMOs to master synthesis route optimization as well as yield improvement. In addition, regulatory focus on quality compliance and process validation increases the need for integrated process development services, rendering it an important value-added product in early and late-stage drug development.
Customer Type Insights
The pharmaceutical sector led the U.S. small molecule innovator API CDMO industry in 2024. Among the top factors driving growth are fueled by growing demand for new therapies and rising outsourcing of R&D and manufacturing to maximize operational effectiveness. Pharmaceutical manufacturers depend on CDMOs to tap into advanced technology, regulatory know-how, and scale capacity. Apart from this, the inclination towards specialty and orphan drugs, supported by a robust pipeline of small. molecule candidates, adds to pharmaceutical companies' reliance on CDMOs for faster drug development and commercialization.
Conversely, the biotechnology segment is witnessing significant growth during the projected period. The growth of the segment is backed by fueled by significant investment in innovative small. molecule drug discovery and early-phase development. Biotech companies, which may not have in-house manufacturing capabilities, are increasingly out-sourcing complex API development to CDMOs for speed, scalability, and regulatory know-how. Also driving demand are increased venture capital funding, a robust clinical pipeline, and strategic partnerships between biotech firms and CDMOs that are fueling demand, especially for specialized skills in complex chemistry and high-potency API manufacturing.
Therapeutic Area Insights
The oncology segment dominated the market with a highest revenue share in 2024 and will witness the fastest-growing CAGR during the forecast period. Growth in the segment is attributed to increasing cancer incidence, growing R&D expenditure on pharmaceuticals, and rising demand for novel oncology drugs. Based on the Cancer Atlas, cancer cases worldwide are estimated to hit 29 million by 2040. Additionally, favorable government reimbursement policies and funding programs are driving the creation of small-molecule oncology treatments. For example, in May 2023, PharmEnable raised a USD 7.5 million Pre-Series A to drive its pipeline of next-generation small-molecule medicines in high-need indications like oncology and neurology. These advances are likely to drive market growth in the future.
The segment of infectious diseases is expected to advance at the highest CAGR during the analysis period. The rapid segment growth is due to the increasing disease burden of bacterial, viral, and parasitic infections. Rising demand for emerging therapies, fueled by public health emergencies such as SARS and COVID-19, is driving R&D expenditure. Furthermore, continuous innovation in anti-infective drug and immunization development, mergers, strategic CDMO alliances, facility expansion, and others are driving contract development & manufacturing demand through early and late phase clinical pipelines.
Country Insights
West Group Small Molecule Innovator API CDMO Market Trends
The West Group dominated the U.S. small molecule innovator API CDMO market with the largest revenue share of 33.07%in 2024. The West region is further subdivided into California, Washington, and the rest of the West Group. The strong presence of biopharma hubs in California and Washington drives the regional growth. This region benefits from advanced R&D infrastructure, a high concentration of pharmaceutical innovators, and proximity to top academic institutions and tech partners. Additionally, favorable state-level policies, strong venture capital investment, and a robust talent pool support continuous innovation, making the West zone a key contributor to market leadership and long-term growth.
The small molecule innovator API CDMO market in California held the largest share in West group in 2024, due to its robust pharmaceutical and biotechnology ecosystem, extensive R&D investments, and advanced manufacturing infrastructure. The state's concentration of CDMO facilities and proximity to leading academic institutions foster innovation and collaboration, driving demand for contract development and manufacturing services.
Midwest Small Molecule Innovator API CDMO Market Trends
The Midwest small molecule innovator API CDMO market will have the highest growth rate of CAGR during the forecast period. The Midwest comprises Illinois, Missouri, North Carolina, and the remaining part of the Midwest. Developments in these places will lead the market. The increasing need for small molecule therapeutics, especially in the fields of cardiovascular diseases, oncology, and metabolic diseases, has resulted in greater dependence on CDMOs in the region for cost-efficient and quality solutions. For example, in March 2024, W. R. Grace & Co. (Grace), Inc. announced the expansion chemical contract development and manufacturing (CDM) plant in Michigan. The expansion aimed at expanded the company's ability to bring new projects to development and expand its custom pharmaceutical service capabilities, such as solid-state chemistry, analytical development, validation, process chemistry, stability studies, and commercialization.
The Illinois small molecule innovator API CDMO market shared the largest portion of Midwest in 2024, owing to strong drug innovation and an increase in clinical trials. The state's robust pharma infrastructure and strategic partnerships have boosted demand for small molecule APIs. For example, in March 2023, PCI Pharma Services laid out a USD 50 million expansion at its sterile injectables facility in Rockford, Illinois. The new plant included more than 20 customer suites with multiformat machines for assembling and packaging vials, prefilled syringes, auto-injectors, and pen-cartridge combinations.
Northeast Small Molecule Innovator API CDMO Market Trends
The small molecule innovator API CDMO market in Northeast held a significant share in 2024. The Northeast segment includes New Jersey, New York, and the rest of the Northeast. This region features a significant concentration of both established pharmaceutical companies and emerging biotech firms, making it a key area for research and production of active pharmaceutical ingredients (APIs). CDMOs in the Northeast offer a comprehensive range of services, including process development, analytical testing, scale-up, and regulatory support.
The New Jersey small molecule Innovator API CDMO market held the largest share in 2024. New Jersey is one of the key U.S. states in terms of pharmaceutical workforce. For instance, in January 2024, Enzene Biosciences, a subsidiary of Alkem Labs, launched a manufacturing site in New Jersey. The company aims to become a CDMO partner for U.S. pharma & biotech firms, helping them bring promising molecules to market.
South Small Molecule Innovator API CDMO Market Trends
The small molecule innovator API CDMO market in south held a significant share in 2024. The south region includes Texas, Florida, Georgia, and the rest of the south. The regional growth is primarily driven by a favorable business environment, a skilled workforce, and a strong presence of pharmaceutical companies. The region's robust infrastructure and accessibility to key resources make it an attractive location for companies looking to develop and produce APIs.
The Georgia small molecule Innovator API CDMO market held the largest share in South in 2024. The revenue growth is driven by its robust biopharma infrastructure and strategic location. The state hosts numerous contract research and manufacturing organizations, facilitating end-to-end drug development and production. Additionally, Georgia's supportive business environment and access to a skilled workforce further enhance its appeal as a hub for pharmaceutical manufacturing and innovation in the U.S.
Key U.S. Small Molecule Innovator API CDMO Company Insights
The key industry players operating across the U.S. market are adopting inorganic strategic initiatives such as partnerships, mergers, and acquisitions. The strategies companies adopt are mergers & acquisitions, service launches, partnerships & agreements, expansions, and others to gain a competitive edge in the significant market. For instance, in June 2024, Formosa Laboratories completed the acquisition of Synchem Inc., a prominent contract research laboratory in the U.S. This acquisition expanded company’s geographical presence in the U.S.
Key U.S. Small Molecule Innovator API CDMO Companies
- Lonza
- Novo Holdings (Catalent, Inc.)
- Thermo Fisher Scientific, Inc.
- Siegfried Holding AG
- Recipharm AB
- CordenPharma International
- Samsung Biologics
- Labcorp
- Ajinomoto Bio-Pharma Services
- Piramal Pharma Solutions
- Jubilant Life Sciences (Jubilant Biosys Limited)
Recent Developments
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In December 2024, API Innovation Center (APIIC) announced its partnership with Sentio BioSciences for development and production of two important pharmaceutical ingredients in the U.S. This partnership aimed to strengthen production of critical medicines and cater high drug demand in the U.S.
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In December 2024, Novo Holdings A/S completed the acquisition of Catalent Inc. This acquisition enabled Novo Holdings to diversify its service portfolio, offering a broader range of capabilities in drug development, manufacturing, and commercialization. The move strengthens its position in the biopharmaceutical industry and enhances its ability to support clients across various therapeutic areas.
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In August 2024, Lonza has added clinical bottling and labeling capabilities in its small molecules facility in Bend, Oregon. This expansion aimed to support for customers working on early-stage development.
U.S. Small Molecule Innovator API CDMO Market Report Scope
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Report Attribute |
Details |
|
Market size in 2025 |
USD 9.41 billion |
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Revenue forecast in 2030 |
USD 12.60 billion |
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Growth rate |
CAGR of 6.0% from 2025 to 2035 |
|
Historical data |
2018 - 2024 |
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Forecast period |
2025 - 2035 |
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Quantitative units |
Revenue in USD million and CAGR from 2025 to 2035 |
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Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
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Segments covered |
Stage type, service, customer type, therapeutic area, region |
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Regional scope |
Northeast; Midwest; West Group; South |
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State scope |
New Jersey; New York; Massachusetts; Illinois; Missouri; North Carolina; California; Washington; Texas; Florida; Georgia |
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Key companies profiled |
Lonza Group Ltd.; Novo Holdings (Catalent, Inc.); Thermo Fisher Scientific, Inc.; Siegfried Holding AG; Recipharm AB; CordenPharma International; Samsung Biologics; Labcorp; Ajinomoto Bio-Pharma Services; Piramal Pharma Solutions; Jubilant Life Sciences (Jubilant Biosys Limited) |
|
Customization scope |
Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope. |
|
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
U.S. Small Molecule Innovator API CDMO Market Report Segmentation
Stage Type Outlook (Revenue, USD Million, 2018 - 2035)
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Preclinical
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Clinical
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Phase I
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Phase II
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Phase III
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Commercial
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Service Outlook (Revenue, USD Million, 2018 - 2035)
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Process Development
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Preclinical Development
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Clinical Development
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Scale-up Optimization
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Contract Manufacturing
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Clinical
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Commercial
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Analytical Testing and Quality Control
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Packaging and Supply Chain Solutions
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Others
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Customer Type Outlook (Revenue, USD Million, 2018 - 2035)
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Pharmaceutical
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Small
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Medium
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Large
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Biotechnology
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Small
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Medium
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Large
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Therapeutic Area Outlook (Revenue, USD Million, 2018 - 2035)
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Cardiovascular Diseases
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Oncology
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Respiratory Disorders
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Neurology
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Metabolic Disorders
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Infectious Diseases
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Others
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Regional Outlook (Revenue, USD Million, 2018 - 2035)
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Northeast
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New Jersey
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New York
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Massachusetts
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Midwest
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Illinois
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Missouri
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North Carolina
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West Group
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California
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Washington
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South
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Texas
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Florida
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Georgia
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