Consolidation among contract development and manufacturing organisations (CDMOs) has been a regular theme for the sector, given that scale is one area on which some firms seek to compete.
Manufacturing outsourcing M&A deal volumes peaked in 2021 and, though the number of agreements has fallen in the years since, deal-making remains a regular part of industry activity.
But does this consolidation create robust manufacturing companies or lead to dangerous dependencies, and what are the implications for partnership decisions? Those were the questions discussed by a panel of industry executives at CPHI Milan 2026.
One of those sharing their views on the panel was Kristina Köleruda, who is senior director, external manufacturing and global supply chain at Leo Pharma, a company that makes large use of outsourced manufacturing.
Leo Pharma, she said, places great emphasis on partner selection, but it goes beyond the size that consolidation creates. “The right [company] model depends on the programme” as judged by its needs and risks. “At Leo, it’s very much about finding the right fit for the product”, a process that includes considerations of speed, flexibility, capacity, and cost. Manufacturing deals require an enormous investment and are hard to exit, so it’s very important to get them right, she noted.
Also on the panel at CPHI was Chris Ballas, global commercial lead at Cook MyoSite, a US firm headquartered in Pittsburgh, Pennsylvania that’s developing skeletal muscle-derived cell therapeutics. Ballas has a background in cell and gene therapy and is consequently used to working with very specialised processes and difficult supply chains, something that impacts partnering decisions.
“I would certainly like to be able to choose partners that grow,” he said, adding this would include outsourcing companies with global reach, but he also acknowledged that there may not be a lot of choice at the early stages of development in his particular field.
It was a point picked up on by Daiichi Sankyo Europe’s Director CMO management Philip Coetzee, who noted the highly specialised nature of cell and gene therapy – “you cannot force anybody to do something they can’t do”. However, at other end of the scale when it comes complexity, the manufacturing of something like paracetamol, which “runs by itself, it is a danger to consolidate”.
The potential dangers of CDMO consolidation were front and center for Coetzee. “I’m absolutely against consolidation,” he stated. “Looking at the geopolitical situation, in the future it’s going to be a significant hindrance for entering markets.”
He said that at a time when decisions in one country can create uncertainty in another, as is currently the case with the US and Canada over tariffs, “it’s time that politics plays a role in selecting CDMOs. For me, consolidation is a no-go. The thing with small CDMOs is they’re agile,” he said, arguing that large CDMOs worry about how things will fit with their structures and processes.
It’s a view that runs counter to the current trend of CDMOs seeking to offer an ‘end-to-end’ portfolio of services, as well as the need for some in the sector to prove to major clients they have the scale to meet their needs.
Bringing a viewpoint from a company whose own M&A deals include its $17.4bn acquisition of PPD in 2021 was Hannah Spaepen, global head of CMC Portfolio Management at Thermo Fisher Scientific.
“As a large CDMO, stability is part of the relationship. You need to be able to adjust the scope.” For a company like Thermo Fisher that can mean supporting global CMC programs as they change and ensuring the link between CRO and CDMO. She argued that combining a bigger footprint with an agile mindset is what makes the difference.
Cook MyoSite’s Ballas perhaps best summed up the panel’s thinking on partnership decisions when he said: “To me it’s all about the right fit – what makes most sense in terms of providing focus and accountability.”
