Societal CDMO’s President and CEO offers his thought leadership. What are “3 Key Trends” shaping the CDMO industry in 2023 and beyond? Societal CDMO’s president and chief executive officer, David Enloe, shares his thoughts with Contract Pharma . Market turbulence The current state of capital market turbulence and the impact that it is having on both CDMOs and the drug developers that we count as our customers is one of the primary industry trends that we are watching closely. The stories of financially struggling biotechs are well documented with some estimates showing that more than 60% of publicly traded companies have an enterprise value that is very low or even negative. These headwinds are prompting companies to focus on cash preservation strategies that will increase their ability to survive the current market conditions. From the CDMOs’ standpoint, this means that there will be fewer opportunities to pursue and, very likely, more competition for those opportunities. This unfolding situation is one that Societal CDMO has been addressing since the market dynamics have changed. Recognizing the importance of relationships with those that know and trust us, we have assigned part of our business development team with the task of focusing on strengthening and expanding our existing customer connections. We have added business development talent with specific expertise in fill/finish projects and oral solid dose tech transfer opportunities. Finally, we’ve enhanced our market intelligence talent to sharpen our targeting of projects that fit best within our capabilities and service footprint to ensure optimal out-comes and long-term financial stability. U.S. production for U.S. patients A persistent trend that is certainly not new to the CDMO industry in 2023 is the continued momentum for reshoring critical elements of the pharmaceutical manufacturing process to the U.S. While it is unrealistic to expect that all CDMO work will be located within the U.S. – for example it is a virtual certainty that active pharmaceutical ingredients (APIs) will continue to be produced outside the U.S. – we are seeing strong evidence that final dosage form production will continue to shift more and more to facilities in this country. This continued emphasis on utilizing U.S. manufacturing for final dosage form product makes sense when you consider the high stakes at play in the clinical development stage coupled with the unrelenting instability in the global supply chain. We feel that this trend strongly favors Societal CDMO. Not only are we a bi-coastal CDMO capable of being a close partner (both by distance and trust) to companies anywhere in the U.S., but we also have critical expertise and state-of-the-art capabilities in tablets, capsules, fill/finish, and other final dosage forms. This positions us well as more and more companies look to high quality U.S.-based CDMOs with strong commercial production history for their final dosage form production. Rationalizing of CMDO businesses post-COVID As with all companies across the healthcare landscape, CDMOs stepped up and heeded the call throughout the global COVID pandemic. Manufacturers played key roles in the vaccine development and commercialization efforts, with many companies dedicating significant portions of their capacity to this work and benefiting greatly from the significant increase in demand. With effective vaccines now discovered, developed, and broadly administered to the population, the scope of CDMO work required for ongoing COVID-related activities has significantly diminished. As a result, we are seeing many CDMOs going through a process of right sizing their companies to reflect the removal of COVID-related projects from their active projects and pipelines. Accordingly, we believe that this contraction in overall scope of business will result in some workforce turbulence within our industry. As a CDMO that did not take on COVID-related work during the pandemic, Societal CDMO will not be impacted by this COVID-related reorienting of business scope. In fact, as Societal continues to add talent to its team, we are seeing increased opportunities to hire qualified people to help us as we grow our business.