Bio/Pharma CapEx Trends, 2014-2025: Financials for Over 1,300 Pharma Companies

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Feb 03, 2020, 11:15 ET

DUBLIN, Feb. 3, 2020 /PRNewswire/ -- The "PharmSource - Bio/Pharma CapEx Trends - 2019 Edition" report has been added to ResearchAndMarkets.com's offering.

Bio/Pharma CapEx Trends characterizes pharma companies Capital Expenditure (CapEx) through a number of quantitative dimensions, including by company market cap, growth rate, compared to their revenue growth, by company headquarter geography, and also characterizes the manufacturing services being gained or enhanced by Capital Expenditure (CapEx) projects.

Capital Expenditure (CapEx) compound annual growth rate (CAGR) of public pharma companies increased by 4.7% between 2014 and 2018, with mega or large cap collectively accounting for approximately 75% of the total 2018 Capital Expenditure (CapEx) spending despite accounting for less than 5% of the companies analyzed. Moreover, five mega cap bio/pharma companies accounted for 27% of the Capital Expenditure (CapEx) in 2018.

These findings highlight exactly why contract manufacturing organizations (CMOs) find it hard to improve the outsourcing rates from mega or large pharma companies, which often invest in their own manufacturing capabilities/facilities rather than choosing to outsource.

The general trajectory is that Capital Expenditure (CapEx) is rising for all of the different market cap categories with the mega cap group's expenditure rising the fastest. The largest public pharma companies have had their individual Capital Expenditure (CapEx) projects detailed since a completion date of 2016. In recent years, the largest public companies have heavily invested in biologic and injectable capabilities. The increasing amount of large pharma Capital Expenditure (CapEx) projects involving both active pharmaceutical ingredient (API) biologics (protein and peptide) and injectable manufacturing is influenced both by the shift of the drugs pipeline to biologics and to the lucrative nature of biologic and high-potency injectable sales.

The continuously rising overall Capital Expenditure (CapEx) across different market cap groups reflects the technological shift that the drug industry has been undergoing toward more complex drug production, from small molecule products to biologics. An increasing number of high-potency drugs are being trialed for oncology, and solubility technologies are more frequently needed for poorly soluble APIs. Even with their relatively modest levels of Capital Expenditure (CapEx), CMOs can continue to play a critical role in the bio/pharmaceutical industry, even for the mega cap pharma companies. Often, a CMO's investments will be in the form of mergers and acquisitions (M&A) rather than Capital Expenditure (CapEx), because these contract service providers have a tendency to buy already-existing facilities from other CMOs or pharma companies rather than constructing new facilities.

Dual sourcing, where a product is both manufactured in-house and outsourced, has become a key part of the manufacturing strategy for many larger pharma companies as a way to manage supply chain risk and financial risk. Understanding why large pharma outsource their production for strategic reasons rather than out of necessity and adjusting contract manufacturing. Capital Expenditure (CapEx) can potentially yield manufacturing relationships for CMOs with lucrative pharma companies.

Report Scope

This 32-page report gives an important expert quantitative analysis on the capital expenditure. Findings are based on the Financial Analytics tool, financials have been analyzed for 1,345 pharma companies. The 5 tables and 11 figures throughout the report illustrate major points and trends.

Reasons to Buy

How are trends in CapEx related to company revenue?
What has been the CapEx growth trends between 2014-2018?
How do trends in CapEx vary by company market cap?
How do CapEx trend change by company HQ location?
What is the CapEx for leading public CDMOs?
Which pharma companies have the highest number of CapEx projects?
What CapEx projects were completed 2016-2018 or have a projected completion for 2019-2025 and which manufacturing services and facility locations are involved?

Key Topics Covered

Executive Summary
Introduction
CapEx Overview
Mega Cap
Large Cap
Mid Cap
Small Cap
CapEx by Company Headquarter Location
CapEx Relative to Other Financial Indicators
Nature of Capital Expenditure - What Is Being Built?
What it Means
Appendix
Methodology for Dataset Creation
CapEx Project Tables
Key Opinion Leaders
Bibliography

Companies Mentioned

Abbvie Inc
Alexion Pharmaceuticals Inc
Amgen Inc
Astellas Pharma Inc
AstraZeneca Plc
Bachem Holding AG
Bayer AG
Biogen Inc
Boehringer Ingelheim International GmbH
Bristol-Myers Squibb Co
Cambrex Corp
Catalent Inc
Chugai Pharmaceutical Co Ltd
Daiichi Sankyo Co Ltd
Dottikon ES Holding AG
Eli Lilly and Co
F. Hoffmann-La Roche Ltd
Fresenius
GlaxoSmithKline Plc
Johnson & Johnson
Lonza Group Ltd
Merck & Co Inc
Novartis AG
Novo Nordisk AS
Otsuka Holdings Co Ltd
Pfizer Inc
Recipharm AB
Sanofi
Siegfried Holding AG
Sumitomo Dainippon Pharma Co Ltd
Syngene International Ltd
Takeda Pharmaceutical Co Ltd
Teva Pharmaceutical Industries Ltd
UCB SA

List of Tables
Table 1: Composition of Bio/Pharma Companies, 2018
Table 2: Analysis of Identified CapEx Projects with 2018 Completion or Later
Table 3: Location of Identified CapEx Projects
Table 4: CapEx Projects Completed 2016-2018
Table 5: CapEx Projects Completed 2019 or Later

List of Figures
Figure 1: CapEx by Company Market Cap, 2018
Figure 2: Comparison of CapEx Change to Revenue Change, 2014-2018
Figure 3: CapEx Trends at Bio/Pharma Companies, 2014-2018
Figure 4: CapEx Trends at Bio/Pharma Companies 2014-2018 Compared to Base Year 2014
Figure 5: CapEx Spend and Growth Rate for Mega Cap Companies
Figure 6: Total CapEx Spend by Company HQ Location
Figure 7: CapEx as a Proportion of Revenue by Country
Figure 8: Mid Cap CapEx as a Proportion of Revenue by Country
Figure 9: Cash Spent on Dividends, Share Repurchase, and CapEx by Mega Cap Companies (excluding Roche), 2014-2018
Figure 10: Capital Expenditure for Leading Public CDMOs, 2018
Figure 11: Companies with the Highest Number of Projects Completed, 2019-2025

For more information about this report visit https://www.researchandmarkets.com/r/8pyuaa

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