Small Molecule API Market Size to Worth Around USD 282.85 Billion by 2030

The global small molecule API market size is projected to worth around USD 282.85 billion by 2030 from valued at USD 175.52 billion in 2021, growing at a CAGR of 5.44% during the forecast period 2022 to 2030.

Report Highlights

• The synthetic segment dominated the market in 2021.
• The in-house segment accounted for the largest revenue share in 2021.
• The cardiology segment accounted for the largest share in 2021. 
• The oncology segment is projected to grow at the fastest rate during the forecast period.
• North America accounted for the largest market share in 2021. 
• Asia Pacific is estimated to be the fastest-growing segment during the forecast period.
• By manufacturer, the U.S. small molecule API market was valued at USD 58.3 billion in 2021 and expected to witness growth at a CAGR of 5.54% from 2022 to 2030.

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It is driven by an increase in demand for pharmaceuticals globally and a high rate of new small molecule-based drug approval.

The increasing number of new pharmaceuticals entering the market is creating a lucrative opportunity for key players. For instance, as per NCBI in 2021, 75% of the drugs accepted by the FDA were small molecules, with the dominant therapeutic area being oncology. Over 50% of these approvals were from small and mid-sized companies which require support from CDMOs for the commercialization of products that enhance the growth rate of CDMOs.

The COVID-19 pandemic has made supply-chain shortcomings in the small-molecule API business apparent, as most of the production facilities are located in Asian nations such as India and China. This has increased the focus of players on creating an end-to-end integrated supply chain for the clients and increased the number of facilities in western countries with heightened support from the government for doing the same.

Merger and acquisition activities are frequently being undertaken by the players to meet the soaring demands globally. For instance, in April 2022, Novasep and PharmaZell announced a strategic merger for the creation of a leading technologically-driven CDMO for complex small molecules and specialty API production.

Expansion and diversification are becoming key strategies used by key players in the market to maintain their market share. For instance, in April 2021, Lonza announced its investment plan of USD 218.6 million for the construction of a manufacturing complex for small molecules in Switzerland. The facility is expected to ensure continuity and flexibility of supply for the products.

Emerging markets such as China, India, and Southeast Asia represent significant opportunities for growth. Furthermore, niche areas such as “halal API” further present growth opportunities owing to the rise in the demand for drugs in the segment, majorly in Middle Eastern and Southeast Asian nations. The synthetic small molecule API segment is largely driven by the presence of small companies and CDMOs that cater to the changing requirements of the industry. 

Scope of The Report

Type Insights

The synthetic segment dominated the market in 2021, attributable to the dominance of synthetic drugs in the pharmaceutical industry that propels the demand for raw materials such as small molecule APIs for production. Furthermore, the ease of production of these molecules and high effectiveness boost the segment growth.

The presence of many players in the synthetic segment is accelerating its growth. Moreover, an increasing number of players are aiming at backward integration and building new manufacturing plants to increase efficiency. The biotech segment is projected to grow at a lucrative rate, attributable to a rising focus on targeted therapies, along with a surge in demand for biotech-based products.

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Manufacturer Insights

The in-house segment accounted for the largest revenue share in 2021, owing to a high number of companies manufacturing their API themselves, making them less reliant on suppliers for raw materials. For instance, in September 2021, AstraZeneca announced an investment of USD 360 million in an API manufacturing facility in Ireland for the commercialization of new products.

Outsourcing has been growing at a steep rate, which can be attributed to the increasing number of molecules being approved that require complex manufacturing processes. Moreover, most of these molecules belong to micro and small-sized companies that highly depend on CDMOs for commercial production of API. This has increased the movement in the CDMO industry, and major players have increased their capacities to meet industry demands.  

Application Insights

The cardiology segment accounted for the largest share in 2021. This is on account of the increasing prevalence of cardiovascular conditions globally, owing to changes in lifestyle and food habits. Moreover, increased adoption of treatment for cardiovascular conditions is accelerating the market growth for the segment.

The oncology segment is projected to grow at the fastest rate during the forecast period due to a surge in the prevalence of cancer. The presence of a lucrative pipeline and increase in demand for cancer drugs is creating a pull for oncology API in the market. Players such as Heraeus Pharmaceutical Ingredients have announced the expansion of their production capabilities in the cancer active ingredients segment.

Regional Insights

North America accounted for the largest market share in 2021. The presence of favorable government initiatives, coupled with the increased interest of players in the region, is anticipated to propel the North American market. For instance, in November 2020, Cambrex announced an investment of USD 50 million for the expansion of its large-scale manufacturing in the U.S. The facility is aimed at meeting the continually surging demand for small molecules.

Asia Pacific is estimated to be the fastest-growing segment during the forecast period due to improvements in overall healthcare infrastructure, improved access to healthcare, and the presence of local manufacturers in large numbers. These players supply globally and make Asia Pacific a key region for the production of small molecule API at a low cost. Increasing government support in nations such as India for investing in API business is further accelerating the growth of the region. In March 2022, Lonza announced the completion of the expansion of its laboratory in China’s API manufacturing facility, which allows the company to focus on small molecule high potency APIs.

Key Players

• Merck & Co., Inc.
• AbbVie, Inc.
• Bristol-Myers Squibb Company
• Albemarle Corporation
• Boehringer Ingelheim International GmbH
• Cipla, Inc.
• Teva Pharmaceutical Industries Ltd.
• Viatris Inc.
• Dr. Reddy’s Laboratories Ltd.
• Aurobindo Pharma
• Sun Pharmaceutical Industries Ltd. 

Market Segmentation

• By Type Outlook
  • Synthetic
  • Biotech
• By Manufacturer Outlook
  • In-house
  • Outsourced
• By Application Outlook
  • Cardiology
  • Oncology
  • CNS and Neurology
  • Orthopedic
  • Endocrinology
  • Pulmonology
  • Gastroenterology
  • Nephrology
  • Ophthalmology
  • Others
• By Regional Outlook
  • North America

• • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa

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