mAb Bioproduction: Surveying the Landscape

Overview:

• Demand recovery for bioproduction tools has advanced slowly with destocking and pipeline reprioritization headwinds but is starting to inflect; +6% YoY in the fourth quarter and +4% on a four-year CAGR.
• Our customer survey supports a 7%-8% growth rate for monoclonal antibody (mAb) bioproduction tools utilized to enable production with further upside through greater CDMO mix and cell and gene therapies (C&GT) contribution.
• Customers like product value, breadth and vertical integration. Demand is strongest for cell culture and single-use bioreactors; equipment is weakest. Demand for process intensification demand is high.

The TD Cowen Insight

The bioproduction market is important for our coverage, a segment with attractive features (sticky long-term contracts, good margins and growth), but one with mixed sentiment following choppy trends post COVID. We remain bullish and created a comprehensive analysis to provide insight on key areas:

• Budget trends,
• The process (steps/products),
• important themes, and
• product/vendor positioning.

Forecasted Changes in Market Suggest Growth of mAb Pipelines

Bioproduction is one of the more attractive sub-segments within the Tools sector, but with 2023-2024 growth well below pre-COVID trends, questions abound about what to expect as the multi-year drag from inventory destock ends. Diligence reflects the leading vendors are well positioned, and large manufacturers' spending for mAb production tools in 2024-2027 can grow seven to eight percent with upside, and mAb pipelines growing double-digit percent.

The Focus on Bioproduction and Impact of Process Intensification

Our proprietary customer survey, leveraging insights from twenty leaders, focused on bioproduction drug substance in manufacturing and process development roles associated with US$6 billion-plus of spend including a mix of biopharma and contract development and manufacturing organizations (CDMOs). Insights from numerous key opinion leaders call to understand market dynamics, processes and drivers. We leveraged the TD Cowen Therapeutic Team's research to size the mAb market, derive mAb sales growth, explore impact of analog-to-digital convertors and bi-specifics and assess mAb therapeutic drivers (chronic disease is a big opportunity) and the pipeline. Our primer provides a detailed overview of the bioproduction drug substance processes and key products. We paid special attention to process intensification (PI); what it is, and how it can affect bioproduction demand and vendors.

Financial and Industry Model Implications

The survey reflects a mAb bioproduction tools spending 2024-2027 CAGR of seven to eight percent (with further upside from numerous factors) and compares to Tools' companies management guides for bioproduction 2025 growth of high single digit percentage thus providing favorable support. Survey points to strongest 2024 to 2027 spend growth for cell culture and single-use bioreactors with filters and chromatography/resins still good but a bit more modest (filters see biggest growth deceleration versus 2021-2024). We explore vendor exposure by products and implications inside. If process intensification accelerates, it's a drag to spending (and creates pockets of growth).

What To Watch

1. Quarterly results,
2. Progress on Biosecure bill,
3. Commercial progress for new large mAbs (Alzheimer's) and pipelines,
4. Biosimilar launches (volumes, BP vendor share, pricing), and
5. New administration leadership and potential impact on The Food and Drug Administration (FDA), drug pricing, China relations