The biopharmaceutical market continued to expand in 2023 and is expected to achieve a compound annual growth rate (CAGR) of around 8% over the next five years1. Historically, the pipeline has increased 9% annually over the last ten years2.
The biologics CDMO market continues to show positive growth, with an expected CAGR between 9 and 11% over the next five years3, as the outsourcing trend continues. The growth in CDMO capacity continues to outpace capacity in customers' own facilities, as large and small players increasingly rely on manufacturing partners to support, complement and de-risk their journey to market. Partnering models help attract customers, enabling capital preservation, direct access to leading expertise, de-risked supply, and regulatory support.
Large pharmaceutical organizations contribute the majority share of CDMO revenues due to commercial manufacturing activity. Small biotech businesses represent a higher proportion of the molecule pipeline, where outsourcing is built into business models to conserve capital resources. While funding has affected this segment in the short term, we expect this to normalize in the medium term.
Strong and continued growth is reflected across all phases of molecules in the biologics pipeline. This is matched by the increased diversity of modalities for the molecules in development, with new biologics drug types and novel indications a key growth factor.
Looking at the market dynamics of the individual modalities:
2023 – 2028 CAGR in USD (ex CGT); Source: Evaluate Pharma; Lonza internal analysis
Source: Citeline Biologics trends (ex CGT)
2023 – 2028 CAGR in USD (ex CGT); Source: Frost & Sullivan (2023); Lonza internal analysis
2023 – 2028 CAGR in USD; Source: Evaluate Pharma
2023 – 2028 CAGR in USD; Source: Evaluate Pharma
Source: Citeline and Lonza internal analysis (2023)
Pre-clinical and clinical large molecules1
Commercial Large Molecules1
Including mammalian, microbial, bioconjugates, drug product services and cell and gene therapy products (personalized medicines are included in pre-clinical and clinical molecules only, early development services are included for pre-clinical molecules only)
We work across the entire spectrum of customers, from small biotech to large pharmaceutical companies. We offer different manufacturing scales and development services and support customers throughout the molecule’s lifecycle from clinical to commercialization.
Lonza has one of the most complete offerings across technologies and scale. It also offers a wide range of services, including regulatory services. We can deliver tailored services that meet customer specific needs. We bring deep and long-standing industrial expertise in commercial delivery, with rigorous standards of quality, safety, efficiency and value providing a unifying thread across all our modalities.
Our largest network and set of capabilities lie in mammalian, which positions us well for the outsourcing trend. In addition, pharmaceutical companies continue to invest in R&D, we see a healthy pipeline of molecules across all phases. The outsourcing trend and the growing molecule pipeline, including commercial stage, will continue to drive demand for large-scale manufacturing. We anticipate that capacity will remain tight for the next five years, as we see the continuing trend towards outsourcing and the sustained commercial demand for manufacturing services.
We are focused on the development of our pipeline to feed commercial demand and de-risk our business model. We take pride in supporting customers early and working with them through the molecule lifecycle. With a strong reputation for commercial capabilities, we are also dedicated to supporting customers through the early stages of drug development. We cover the full scope of mammalian development and manufacturing services for all molecule types and build retention through development services, including licensing of proprietary IP.
In May 2023, we opened a new facility in Cambridge (US) as part of our extended early-stage offering. Located close to the Boston biotech community, the new facility enables customers to de-risk and optimize drug candidates at an early stage.
In 2024, we will ramp-up our new clinical assets in Portsmouth (US) that will support customers who want to produce in the United States at small scale. It will also enable the consolidation of demand from clinical to launch in one location, Portsmouth (US), and enable the shutdown of Hayward (US).
In 2024, we will also execute the ramp-down of our activities in Guangzhou (CN) and consolidate demand in other locations.
We provide robust expertise and experience in drug conjugation. This modality can be applied to different products, such as antibody-drug conjugates (ADCs). ADCs consist of an antibody that can identify and locate a target cancer cell, a cytotoxic payload to kill the cell, and a chemical linker to bind these two components together. ADCs are revolutionizing the cancer treatment landscape. The production process is highly complex and integrated. It requires deep technical expertise, leading technology, and well-controlled facilities to ensure safety, quality, and efficacy.
We develop and produce all ADC components, drawing on expertise across divisions. Today, we manufacture the majority of commercially available ADCs, and we see significant further growth potential. In 2023, we delivered more than 300 batches across 32 programs, which represents a fourfold increase compared to five years ago. Batch sizes also increase as more products reach commercialization.
The ADC platform is a great example of Lonza investing early in new modalities and capabilities. In addition, we are committed to investing in R&D and innovation to meet future demand alongside market needs for more diverse and complex ADCs. In 2023, we acquired Synaffix, a company with strong proprietary conjugation technology, to keep on offering the best possible platforms to our customers.
Our integrated offering supports customers in accelerating timelines and reducing complexity on the journey to commercialization.
With licenses to manufacture eight commercial products and a track record in large-scale complex protein and vaccine production, our microbial business unit is a leader in late-phase and commercial supply for customers looking for reliability and quality of supply. Our expertise is drawn from over 30 years’ experience and more than 70 GMP technology transfers into Lonza. With our proprietary XS Technologies® expression systems, state-of-the-art development labs, and GMP manufacturing scales spanning 70 liters to 15,000 liters, including a new mid-scale production facility, our facility in Visp (CH) enables us to offer services that meet our customers’ needs across the entire product lifecycle.
Our Drug Product Services (DPS) business unit focuses on parenteral dosage forms. We help customers address various challenges across formulation, analytical, process development and drug product manufacturing. We have built deep expertise, in areas including formulation, and have expanded into clinical and commercial fill and finish.
The DPS portfolio includes expertise in drug product injection and infusion, covering various routes of parenteral administration such as intravenous, subcutaneous and intravitreal. With a growing team of more than 500 professionals, we offer an integrated approach, across various biologics modalities. This includes standard monoclonal antibodies as well as more complex molecule formats such as bispecific antibodies, fusion proteins, recombinant proteins and bioconjugates, including ADCs.
DPS partners with the Drug Substance business units to offer end-to-end solutions, including drug substance and drug product. There is increasing demand for integrated solutions that decomplexify and secure supply with one CDMO.
A Global Center of Excellence for Drug Product Development
Our global Center of Excellence for Drug Product Development is located in Basel (CH). It is recognized for its industry-leading expertise in formulation and analytical development. It also has a leading reputation for the testing of parenteral dosage forms throughout drug development and manufacturing, which supports high safety and quality standards for drug products delivered to patients.
In addition to this core offering, we provide a unique range of specialized pharmaceutical services, encompassing particle identification, excipient and surfactant characterization, extractables and leachables assessments, testing for container closure integrity and drug/device combination services.
Biologics Drug Product Manufacture – Global Drug Product Manufacturing Network
Building on our expertise in drug product development, we have expanded our global fill and finish capacity, starting with the establishment of a GMP facility in Stein (CH) dedicated to the clinical and commercial supply of drug products in liquid and lyophilized forms. Located just 30 km from Basel (CH), the site has undergone significant expansion to become a thriving manufacturing campus, affirming its status as Lonza’s global Center of Excellence for drug product manufacturing.
Drug Product Growth Project
To continue expand capacity, 2023 marked the commencement of construction on a new commercial scale fill and finish facility in Stein (CH), with initial completion scheduled for 2026. With an investment approximately CHF 500 million, this new flexible facility is located on the same campus as our existing drug product facility, allowing us to leverage our existing infrastructure, capabilities, and talent. The multi-purpose facility consists of several connected buildings, spanning across 18,000 m2, and housing four filling lines. The facility encompasses liquid, lyo, and pre-filled syringe capabilities, along with a customer-dedicated ADC filling line.
The design will embrace the latest developments in sustainable construction, taking a modern approach to carbon reduction and responsible energy use, including the installation of a photovoltaic roof.
The addition of this commercial scale fill and finish facility will support the delivery of full end-to-end drug manufacturing services and support customers across the entire product life cycle.
We pioneered the large-scale commercial manufacturing of mRNA medicines during the COVID-19 pandemic, in record time. It is a testament to our adoption of new technology and the strength of our development and manufacturing know-how that we can deploy to new offerings. Since then, mRNA technology has advanced in multiple therapeutic areas, with many projects now in early development.
To support these projects, we have opened a new integrated mRNA/lipid nanoparticles (LNP) manufacturing complex at our cell and gene therapy site in Geleen (NL), leveraging local expertise and providing development opportunities for our employees. The expansion includes IND-enabling, clinical and small-scale commercial manufacturing services. It also includes areas for process and analytical development, cGMP manufacturing and Quality Control for mRNA and LNP necessary for formulating mRNA-based medicines.
Our licensing business unit manages access to our Intellectual Property (IP) to allow companies to develop new therapeutics to incorporate proven technologies to help speed-up their development. Our differentiated licensing offering is particularly suited for pharmaceutical, biotechnology companies and research institutions conducting early research. Built on more than 35 years of continuous innovation, our GS® gene expression system is a core component of a more comprehensive set of expression technology solutions that span diverse therapeutic modalities.
We serve more than 500 active licensing customers and more than 200 prospective licensees under Research Evaluation Agreements. More than 80 approved therapeutics reach millions of patients each year, helping us to achieve our purpose of enabling a healthier world.
Ibex® Solutions comprises a series of advanced manufacturing facilities that combine to form an extensive biopark in Visp (CH). The facilities are supported by a flexible and responsive business model with three innovative offerings: Ibex® Design, Ibex® Develop and Ibex® Dedicate. These offerings span the complete product lifecycle of a biopharmaceutical from pre-clinical to commercial stages, from drug substance to drug product. Our Ibex® customers benefit from a comprehensive and tailored portfolio of services under a single framework. Ibex® Solutions enable our customers to bring their new medicines and vaccines to their patients at pace, while providing the flexibility to actively manage supply constraints, drug development uncertainty and evolution in market demand.
The Biologics division comprises a full-service CDMO, providing development and manufacturing services to pharma and biotech companies across a wide range of biologic modalities, including mammalian, microbial, bioconjugates, mRNA, and drug product services. In addition, it offers licensing services to technologies used in the development of drugs.
We offer innovative development and manufacturing services and technologies, from drug discovery to market supply, and from drug substance to drug product, across various molecule types. Our end-to-end offering ensures customers benefit from high levels of expertise, along with the speed and ease of doing business with a single strategic partner. Through our global network we are close to our customers and support supply chain resilience.
To be decommissioned by 2025
Over the course of the year, we have continued to experience strong sales of 17.6% CER. This was driven by new projects coming online, alongside base business expansion. Our investments have focused on supporting the clinical pipeline and building world-class infrastructure at critical sites including Visp (CH).
Looking ahead to 2024 and beyond, we anticipate that core sales growth, excluding Moderna, will outpace market growth, driven by large commercial contracts and future commercial expansion. We will continue to invest further to consolidate our position as a CDMO partner of choice.
Comparison vs. Prior Year
Sales (CHF)
CORE EBITDA (CHF)
CORE EBITDA Margin
Sales growth, expressed as a percentage (%), are at constant exchange rate (CER)
Innovation plays a crucial role in helping us to maintain our market advantage. We can now support certain customers moving from gene to IND filing in approximately 11 months or less for standard monoclonal antibodies and approximately 13 months for more complex proteins1 or customers who want a specific approach. This speed and efficiency attracts customers who wish to accelerate clinical development and want a flexible approach.
Our focus on continuous bioprocessing and process intensification aims to improve productivity and reduce the cost of goods sold.
We are integrating digital technologies into the drug development and manufacturing journey to help improve speed, flexibility and efficiency while managing costs.
We have signed an Ibex® Dedicate program with our customer, Vaxcyte, to support their journey to commercialization for the global manufacturing of broad-spectrum pneumococcal conjugate vaccines (PCVs). This agreement extends a long-term relationship that provides Vaxcyte with a custom-built manufacturing suite in Visp (CH). Equipment installation is expected to begin in 2024.
In addition, two new bioconjugation suites for the commercial supply of ADCs will be added as part of an extension of a long-term collaboration with a major global biopharmaceutical partner. The extension builds on an existing partnership for end-to-end ADC manufacturing, including payload, monoclonal antibody (mAb) manufacturing, and bioconjugation. The agreement will increase the current dedicated bioconjugation capacity fourfold and is expected to generate around 180 new jobs upon completion, with operations expected to commence in 2026.
Terms and conditions apply; certain molecules are not suitable for this offering
President, Biologics Division
In Biologics, we continued to build our pipeline, strengthened our manufacturing network, in particular for ADCs, and built our technology portfolio with the acquisition of Synaffix. We signed multiple dedicated long-term customer programs, which reflect the value of our offerings. 2023 was our strongest signing year on record.
Early in 2023, we completed the expansion of our bioconjugation facility in Visp (CH) to enhance our capability for clinical and commercial supply across development and manufacturing, including drug product. We completed a new cGMP clinical and commercial drug product line, marking a significant milestone in the growth of our Drug Product Service offering. These continued investments in Visp (CH) are designed to provide a flexible solution for customers of all sizes in one location.
Following the groundbreaking of the new commercial drug product facility in Stein (CH) in January 2023, we secured our first additional dedicated line for the commercial cGMP filling line at the site in October 2023. The extended agreement with a major biopharmaceutical partner will enable the aseptic filling of highly potent ADCs and lyophilization under containment. With operations starting in 2027, these additional filling capabilities further strengthen our capacity and flexibility in supporting both the clinical and commercial supply of bioconjugates.
We announced the acquisition of Synaffix B.V. to further strengthen our bioconjugates offering. The Synaffix technology platform, which includes payload and site-specific linker technologies, will enhance our integrated ADC services, including our early-phase offering. Combining our development and manufacturing capabilities with the Synaffix platform will provide customers and licensees with a comprehensive service to rapidly discover, develop, scale-up and commercialize novel and differentiated ADCs.
Our new mid-scale 4,000 liters microbial facility is operational, with the first batches manufactured in 2023. Final regulatory authority approval and ramp-up of the asset is underway. To complement this increase in manufacturing capacity, our new purpose-built development services labs were established and have been fully operational since early 2023, with our customers benefiting from a new state-of-the-art automation room and pilot facility.
Targeted therapy employing monoclonal antibodies (mAbs) represents a powerful immunotherapy tool in oncology. These mAbs function by directly or indirectly killing cancer cells. This process is facilitated through antibody-dependent cellular cytotoxicity (ADCC), a key mechanism underlying targeted antibody-based immunotherapy approaches. ADCC is an important mechanism of therapeutic action and refers to the process where antibodies bind to infected or non-host cells, leading to the elimination of those cells. Since many cancer patients show limited responses to standard mAb therapies, developing therapies with improved ADCC-eliciting properties can help enhance their therapeutic success.
To help meet pressing market and patient needs, Lonza has developed our new GS Effex® cell line that increases ADCC function and therapeutic potency of the mAb product. Derived from our GS Xceed® cell line, our GS Effex® cell line is compatible with Lonza’s GS Gene Expression System® and platform processes. The GS Effex® cell line is stable, productive and scalable and, as part of the GS System®, allows for reliable cell line construction and reduced risk during product development.
Our continued focus on leveraging our expertise and experience across various fields and modalities helps us to bring innovative solutions to our customers and their patients. The new GS Effex® cell line will help enable our customers to deliver cutting-edge therapeutics that address unmet patient needs.
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