Drug Discovery Services Market Growth To See Worldwide Massive Growth, COVID-19 Impact Analysis, Industry Trend

Drug Discovery Services Market Projected to Reach USD 61.93 Billion by 2030, Driven by Technological Advancements and Strategic Collaborations

The  drug discovery services market is experiencing robust growth, with projections indicating an increase from USD 22.45 billion in 2023 to USD 61.93 billion by 2030, reflecting a compound annual growth rate (CAGR) of 15.6% during the forecast period. This expansion is fueled by escalating research and development (R&D) expenditures, the rising prevalence of chronic diseases, and the increasing adoption of advanced technologies such as artificial intelligence (AI) in drug discovery processes.​

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Market Estimation, Growth Drivers, and Opportunities

The surge in the drug discovery services market is primarily attributed to the growing demand for novel therapeutics and the need to streamline the drug development process. Pharmaceutical and biotechnology companies are increasingly outsourcing drug discovery activities to contract research organizations (CROs) to enhance efficiency and reduce costs. Technological innovations, including AI and machine learning, are revolutionizing drug discovery by enabling the identification of potential drug candidates with greater speed and accuracy. Furthermore, the focus on personalized medicine and the development of biologics present significant growth opportunities for service providers in this market.​

U.S. Market Trends and Investments

In the United States, the drug discovery services market is witnessing significant investments and strategic collaborations aimed at accelerating drug development. For instance, Charles River Laboratories has entered into agreements to enhance its drug discovery capabilities through AI integration. Additionally, the U.S. government's support for R&D activities and favorable regulatory frameworks are fostering a conducive environment for market growth. The emphasis on precision medicine and the increasing prevalence of chronic diseases are further propelling the demand for advanced drug discovery services in the country.​

Market Segmentation

The drug discovery services market is segmented based on process, type, therapeutic area, and end-user.​

• By Type: The medicinal chemistry services segment held the largest market share in 2023. The growing use of chemistry in different early drug development stages to provide robust candidates is driving growth in this segment. The trend of pharmaceutical companies outsourcing R&D services, along with increasing drug discovery and development activities, is propelling the medicinal chemistry segment's growth during the forecast period.​

• By Therapeutic Area: The oncology segment dominates the market and is expected to maintain its leading position due to the increasing incidence of cancer worldwide. The demand for effective cancer therapies is driving the need for advanced drug discovery services in this area.​

• By End-User: Pharmaceutical and biotechnology companies are the primary end-users of drug discovery services, accounting for the largest market share. The need to enhance R&D productivity and reduce time-to-market for new drugs is encouraging these companies to collaborate with CROs.​

Competitive Analysis

The global drug discovery services market is characterized by the presence of several key players who are adopting strategic initiatives to strengthen their market position:​

1. Charles River Laboratories (US): Charles River Laboratories has entered into agreements to enhance its drug discovery capabilities through AI integration. In January 2023, the company completed the acquisition of SAMDI Tech, Inc., which offered expertise in label-free high-throughput screening mass spectrometry platforms, creating a comprehensive library of drug discovery solutions.​

2. Evotec SE (Germany): Evotec SE is a prominent player in the drug discovery services market, collaborating with over 500 biopharma companies worldwide. The company has significant future revenue potential through its pipeline and has been involved in strategic partnerships to enhance its drug discovery capabilities.​

3. ICON plc (Ireland): ICON plc is a multinational healthcare intelligence and clinical research organization providing consulting, clinical development, and commercialization services. The company has expanded its capabilities through various acquisitions, including the acquisition of PRA Health Sciences in 2021, creating a world leader in healthcare intelligence and clinical research.​

4. IQVIA (US): IQVIA is a leading provider of biopharmaceutical development and commercial outsourcing services, focusing on Phase I-IV clinical trials and associated laboratory and analytical services. The company leverages advanced analytics, technology solutions, and extensive domain expertise to drive healthcare forward.​

5. Parexel (US): Parexel is a global contract research organization conducting clinical trials on behalf of its pharmaceutical and biotechnology clients. The company offers a comprehensive range of services, including clinical trial management, data management, medical writing, biostatistics, and regulatory consulting.​

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Regional Analysis

• United States: The U.S. holds a significant share of the global drug discovery services market, driven by the presence of well-established CROs, rising R&D expenditure by pharmaceutical and biopharmaceutical companies, and the availability of cutting-edge techniques and facilities for drug discovery research.​

• United Kingdom: The UK life sciences sector significantly contributes to the economy and ranks highly in global research, placing the country at an advantageous intersection of AI and life sciences. Recent investments in AI aim to enhance the National Health Service (NHS) and position the UK as a leader in medical technology. British start-ups like Exscientia and BenevolentAI are at the forefront, leveraging AI to streamline drug discovery processes.​

• Germany: Germany's Merck KGaA is focusing on partnerships with AI companies to develop new drugs, seeing AI's potential to transform research and development, particularly in the early stages of drug discovery. The company aims to exploit AI's strengths in initial research to accelerate timelines and improve success rates. ​

• France: France is investing in its pharmaceutical sector, with a focus on innovation and research. The country's supportive regulatory environment and government initiatives are fostering growth in drug discovery services.​

• Japan: Japan, the world's second-largest pharmaceutical sector, is expected to present significant potential for CROs. The revised Pharmaceutical Affairs Law in Japan supports research activities in tissue diagnostics and cancer, enhancing market growth in this region.​

• China: China is forecasted to experience impressive growth in the drug discovery services market, with a CAGR of 6.9%, reaching $14.1 billion by 2030. The country's investments in biotechnology research and infrastructure development are driving this expansion.​

Conclusion

The global drug discovery services market is on a robust growth trajectory, propelled by technological advancements, increasing demand for novel therapeutics, and strategic collaborations among industry players. Key growth factors include the adoption of innovative techniques like AI in drug discovery, supportive government policies fostering research and development, and the rising prevalence of chronic diseases necessitating new drug development. Emerging markets, particularly in the Asia-Pacific region, present substantial opportunities for expansion. To capitalize on these trends, stakeholders should invest in advanced technologies, foster collaborations, and explore untapped markets to drive sustained growth in the drug discovery services industry.

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