The shining light of the European pharmaceutical intermediates market is chiral chemistry, according to a new market report
The pharmaceutical intermediates market is highly fragmented and overcrowded.
While it continues to experience growth, it is at a much lower rate than the double digit figure predicted by the Deutsche Bank in the 1990s.
However, by segmenting the market into its nine key technologies, Frost and Sullivan is able to identify particular areas of the industry that are showing above average growth and development rates.
Chiral chemistry can quite clearly be seen as the rising star.
Andrew Barton, Frost and Sullivan research analyst and author of the report explains: "A large majority of products in development at the moment are based on building blocks with chiral characteristics.
The introduction of chirality into a species usually occurs downstream and therefore, closer to the stage of final dosage formation.
This will see greater opportunities for companies with a focus on advanced stage production.
Suppliers who can attract business on the basis of their expertise in chiral transformations will further benefit from acquiring the other steps of the production schedule." In this overcrowded market, the lack of capability differentiation is a significant challenge that is facing the industry as a whole.
Many suppliers have built up comprehensive portfolios of technology expertise but it is important that they identify a hook to attract new customers.
"The market can not sustain the current number of participants," warns Barton.
"A dearth of capability differentiation is a significant challenge facing the whole industry.
Flexibility, quality and integrity are the watch words of this industry and only suppliers who offer these qualities, combined with real differentiating attributes will draw new clients to them," he adds.
Barton expects to see a spate of M and A activity within the intermediate manufacturers as they seek to broaden their capabilities.
"Competitors must position themselves in markets with a high level of attractiveness.
But suppliers can not simply focus on chiral technology at the expense of others, since clients demand a breadth of capability.
The ability to offer a range of non-core reaction steps along side chiral transformations will be a significant factor for success in this market" he concludes.
