Global healthcare CRO/CDMO landscape: Durable CDMO demand is driving renewed capacity investment across Asia and global peers

Overview

This global CRO/CDMO industry update summarizes takeaways from Goldman Sachs' Asia Healthcare CDMO Day and recent 2Q26 results. The report argues that demand recovery is broadening across regions, development stages and modalities, leading management teams to accelerate capacity investment for a multi-year outsourcing cycle.

Core views

Goldman Sachs' central conclusion is that the CRO/CDMO industry debate has moved from the pace of recovery to the durability of the next growth cycle. Management commentary pointed to improving preclinical and safety-assessment demand, accelerating order intake, backlog growth and greater commercial-manufacturing visibility. The report treats front-end discovery, preclinical and safety work as leading indicators because stronger activity there can feed future clinical-development and manufacturing demand. It also sees pharma M&A, licensing and business-development activity as supporting a broad-based recovery rather than a narrow commercial-stage rebound. Regional supply-chain dynamics remain differentiated. Indian, Taiwanese and Korean CDMOs continue to identify supply-chain diversification as a contributor to order intake, whereas Chinese companies reported limited direct customer-demand impact from geopolitics. Across regions, customer choice is increasingly driven by capability, quality, speed and available capacity. Capacity constraints and longer lead times in Europe, especially for small-molecule APIs, are directing incremental work to Asian manufacturers. Biologics customers are also pursuing dual sourcing, while drug-product formulation and fill-finish activity continues to favor near-shoring because of regulatory, logistical and customer-proximity considerations. The report identifies capex as the most notable change from discussions a year earlier. Chinese and Indian management teams are becoming more aggressive in investment plans as confidence rises in backlog conversion and medium-term demand visibility. Spending is focused on peptides, ADCs, oligonucleotides, biologics and overseas expansion. Goldman Sachs interprets this as evidence that companies believe earlier capital discipline may have constrained growth and are now positioning for the next outsourcing cycle. Samsung Biologics' expected Plant 6 announcement by year-end is cited as further evidence of confidence in biologics demand. Emerging modalities are the main growth engine. Peptide demand, especially obesity-related GLP-1 programs, remains central, but the report distinguishes scaled incumbents focused on large commercial opportunities from second-wave entrants targeting earlier-stage pipelines and non-GLP-1 indications. WuXi AppTec raised FY26 TIDES growth guidance to about 45% year-on-year, with peptide capacity expected to reach 130kL by year-end 2026. Asymchem expects peptide capacity of 69kL by year-end 2026, up from 45kL in 2025, and serves 60 peptide projects, including 25 obesity-related programs. ADC demand is shifting from platform build-out toward commercial conversion and manufacturing scale-up; WuXi XDC is highlighted as a beneficiary, while Samsung Biologics is expanding toward end-to-end ADC services. Oligonucleotides, formulation and fill-finish, and biosimilars are additional growth avenues. Chinese CDMOs delivered broad earnings strength despite foreign-exchange headwinds. WuXi AppTec, WuXi Biologics and WuXi XDC reported meaningful outperformance driven by utilization, operating leverage and higher-value modalities. WuXi AppTec, WuXi Biologics, Pharmaron and GenScript raised FY26 outlooks. Selected backlog and order growth was +25% for WuXi AppTec, +24% for WuXi Biologics, +50% for WuXi XDC, +54% for Asymchem and +30% for Pharmaron. Early-stage activity also improved: WuXi AppTec added 167 preclinical and Phase I molecules in 2Q26 versus 80 in 1Q26; WuXi Biologics added a record 169 integrated projects in 1H26; WuXi XDC signed a record 51 integrated projects; and Pharmaron's Clinical Development Services order intake rose 30% year-on-year. AIDD has shifted from being viewed primarily as a potential CRO pricing-risk narrative to an incremental demand-creation opportunity. GenScript reported about US$40 million of AIDD-related revenue in 1H26 and expects more than US$100 million in 2H26. Pharmaron indicated that roughly 7-8% of Laboratory Services revenue is linked to AI-focused customers, while WuXi Biologics reported 30% growth in protein-related services. Goldman Sachs notes that clinical CROs may still face pricing pressure in activities such as medical writing and translation, but management generally sees efficiency and operating leverage offsetting those headwinds. Longer term, faster target identification, molecule design and pipeline generation could raise demand for preclinical and clinical services. Biosimilars are presented as a durable biologics-outsourcing driver. Goldman Sachs cites Sandoz's forecast for the global biosimilars market to grow at about 19% CAGR from roughly US$36 billion in 2025 to roughly US$209 billion in 2035, supported by regulatory simplification, patent expiries and broader adoption. FDA reforms are described as shortening a typical biosimilar program from seven to eight years to four to six years and reducing development cost by about 50%. The report notes that US$550 billion of biologics sales are expected to lose exclusivity through 2040. WuXi Biologics had 17 active biosimilar projects as of June 2026, 20 projects committed over the next three years and 10 further opportunities under negotiation. Across global peers, Samsung Biologics reported 2Q26 revenue of KRW1.32 trillion, up 30.2% year-on-year, and reiterated FY26 revenue-growth guidance of 15-20%, targeting the upper end. Lonza's 1H26 EBITDA was about 4% ahead of company-compiled consensus, and it raised FY26 core EBITDA-margin guidance to 33-34% from above 32%. Thermo Fisher delivered 5% organic growth and expects FY26 organic growth near the high end of its 3-4% range; management cited rising US onshoring-related CDMO orders that may convert to revenue over the next 9-12 months. Charles River's Discovery and Safety Assessment net book-to-bill reached 1.19x, its highest in nearly four years, while Medpace reported record net new business awards of US$795.7 million, up 28.2% year-on-year. The report judges a September 25bp Federal Reserve rate hike to 3.75-4.00% as immaterial to near-term CRO/CDMO demand because order books and 2H26 revenue visibility are largely secured and execution is more important for near-term results. Goldman Sachs instead emphasizes the terminal-rate outlook, biotech funding conditions, IPO and follow-on activity, and preclinical-CRO book-to-bill trends. It identifies Samsung Biologics' large orders and Plant 6 announcement, Lonza's October 14 CMD, capacity ramps, AIDD-related orders, funding trends and backlog conversion as important catalysts and monitoring points.

Analysis framework

The report combines management commentary from the Asia Healthcare CDMO Day with recent earnings results, company guidance, backlog and order data, capacity plans, peer comparisons and sector funding indicators. It assesses demand from early discovery through commercial manufacturing, then links modality growth, capacity investment, supply-chain shifts and funding conditions to company-specific exposure.

Methodology notes

• Industry AnalysisSupply-demand framework

  Outsourcing demand and CDMO capacity analysis

  The report evaluates order intake, backlogs, utilization, capacity constraints and capex plans to judge whether demand can sustain growth across CRO and CDMO services.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Early-stage R&D as a leading indicator for downstream manufacturing

  Improvement in discovery, preclinical and safety-assessment activity is used as evidence that later clinical-development and commercial-manufacturing demand may strengthen.

• Valuation methodsP/E and PEG Valuation

  Forward P/E and PEG peer comparison

  The report compares selected CDMO valuations and notes that WuXi shares trade at a discount to Lonza and Samsung Biologics despite a similar growth profile.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• WuXi XDC (2268.HK)

  Highlighted as a beneficiary of accelerating ADC outsourcing and early-stage innovation recovery.

  Strengths

  Record 51 newly signed integrated projects and backlog growth of about 50%.

  Comparison

  Greater exposure to early-stage R&D activity than commercial-stage-focused peers.

  Risks

  Weaker biotech funding, global competition, geopolitical uncertainty, loss of key clients or late-stage projects, delayed expansion and ADC clinical-development risk.

• Pharmaron (3759.HK)

  Highlighted as well positioned for early-stage innovation, AIDD and emerging modalities.

  Strengths

  Clinical Development Services new-project orders grew 30% year-on-year; FY26 revenue-growth guidance was raised to 15-20%.

  Comparison

  More leveraged to early-stage R&D recovery than commercial-stage-focused companies.

  Risks

  US-China trade tensions, labor-cost and talent-retention challenges, and slower global pharma R&D or venture-capital/IPO financing.

• Samsung Biologics (207940.KS)

  Key catalyst-driven biologics and multi-modality CDMO name.

  Strengths

  2Q26 revenue grew 30.2% year-on-year; Plant 5 ramp-up, US-facility contribution and PolyPeptide acquisition support expansion.

  Weaknesses

  Softer-than-expected gross margin due to start-up costs.

  Comparison

  Expanding into peptides and end-to-end ADC solutions while building on scaled biologics manufacturing.

  Risks

  Competition, slower capacity ramp-up, regulatory risk and corporate-governance issues.

• Lonza (LONN.S)

  Commercial-manufacturing beneficiary highlighted for earnings resilience.

  Strengths

  1H26 EBITDA was about 4% ahead of consensus; portfolio diversity and ADC exposure offset Integrated Biologics weakness.

  Weaknesses

  Integrated Biologics missed expectations because of weaker base-business portfolio mix.

  Comparison

  The report views diversified platforms as an offset to weaker individual divisions.

  Risks

  Insufficient EBITDA-margin progression, slower Vacaville utilization, delays in biotech-funding improvement and long-term single-use continuous-manufacturing risks.

• Thermo Fisher Scientific (TMO)

  Potential beneficiary of US onshoring, CDMO market-share gains and improving biotech funding.

  Strengths

  Broad-based end-market acceleration and increasing US onshoring-related CDMO orders.

  Weaknesses

  Recovery toward the long-term organic-growth framework is expected to be gradual.

  Comparison

  Patheon is positioned to serve smaller and mid-sized biopharma customers that cannot build dedicated manufacturing capacity.

  Risks

  Weak early-stage R&D demand, reduced large-pharma spending, a less certain recovery path and continued US academic-and-government-market weakness.

Key data

• WuXi AppTec backlog growth+25%Year-on-year backlog and order-growth indicator cited for 2Q/1H26.
• WuXi XDC backlog growth+50%Year-on-year backlog and order-growth indicator cited for 2Q/1H26.
• Samsung Biologics 2Q26 revenueKRW1.32 trillion+30.2% year-on-year; management reiterated FY26 revenue-growth guidance of 15-20%.
• Lonza 1H26 EBITDA versus consensusc.4% aheadLonza raised FY26 core EBITDA-margin guidance to 33-34% from above 32%.
• Indian CDMO FY27 capex growth expectation+50%Street expectation, versus +38% in FY26; capex is expected to reach 21% of sales.
• GenScript AIDD-related revenuec.US$40 million in 1H26; >US$100 million expected in 2H26Evidence of growing AI-driven drug-discovery demand.
• Global biosimilars market forecastc.US$209 billion by 2035Sandoz forecast implies c.19% CAGR from c.US$36 billion in 2025.
• US healthcare equity fundingUS$36 billion YTDAs of August 2026, the highest level since 2021.

Impact & implications

Goldman Sachs sees strengthening demand, accelerating investment and a wider range of outsourced modalities as supporting durable industry growth. It favors companies with exposure to early-stage R&D, emerging modalities and commercial manufacturing, while differentiating more defensive commercial-stage exposure from higher-beta early-stage recovery exposure.

Risks

• A slowdown in biotech funding, IPOs or follow-on financing could weaken early-stage R&D demand and new outsourcing orders.
• Product-specific stocking and destocking remain a risk for Indian CDMOs.
• Pricing pressure, client concentration, competition and geopolitical uncertainty remain company-specific risks across the sector.
• Capacity ramp-up, regulatory inspections and technology-transfer execution can delay revenue and margin realization.

What to watch

• 3Q book-to-bill trends at preclinical CROs, particularly Charles River, as a leading indicator of R&D demand.
• IPO and follow-on financing activity, alongside broader biotech funding conditions.
• Samsung Biologics' large-order announcements and formal Plant 6 announcement.
• Capacity ramps and backlog conversion in peptides, ADCs, oligonucleotides and biologics.
• AIDD order growth and the pace at which AI-enabled discovery converts into outsourced development demand.
• Lonza's October 14 CMD and its revenue-resilience and profitable-growth plans.