Expected Revenue Gains:
The global Drug discovery services market is projected to reach USD 31.4 billion by 2026 from USD 16.1 billion in 2021, at a CAGR of 14.3% during the forecast period of 2021 to 2026.
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Major Growth Influencing Factors:
Growing R&D expenditure in the pharmaceutical & biopharmaceutical industry, increasing demand for outsourcing analytical testing services, initiatives for research on rare diseases and orphan drugs, and the high cost of in-house drug development are creating new revenue pockets in the drug discovery services market.
On the other hand, stringent regulations governing drug discovery and animal usage are expected to restrain market growth to a certain extent. The shortage of skilled professionals poses a challenge for drug discovery service providers.
The chemistry services segment accounted for the largest share of the type segment in the drug discovery services market in 2020.
Based on type, the drug discovery services market is segmented into chemistry and biology services. The chemistry services segment commanded the largest share of this market in 2020. Growth in this market segment is largely due to the widespread application of chemistry in various early drug development phases to deliver robust candidates. The extensive usage of chemistry in academics, biotechnology companies, and large pharmaceutical companies also supports market growth.
The Hit-to-lead identification segment accounted for the largest share of the process segment in the drug discovery services market in 2020.
Based on process, the drug discovery services market is broadly classified into target selection, target validation, hit-to-lead identification, lead optimization, and candidate validation. Hit-to-lead identification segment accounted for the largest share of the drug discovery services market in 2020. Due to its vital role in drug discovery, hit-to-lead identification is the most revenue-generating process, and currently, many CROs are offering these services to pharmaceutical companies.
The Asia Pacific region is the fastest-growing region of the drug discovery services market in 2020.
Based on the region, the drug discovery market is segmented into five major regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The Asia Pacific market is estimated to register the highest growth during the forecast period primarily due to expanding pharmaceutical and biopharmaceutical industry, rising number of CROs, implementation of favorable government policies, increasing number of newly established R&D and manufacturing facilities, and the presence of less-stringent regulations for drug discovery processes (especially in terms of using animals for research) in several APAC countries.
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Key players in the drug discovery service Market include Laboratory Corporation of America Holdings (US), Charles River Laboratories International Inc. (US), WuXi AppTec (China), and Thermo Fisher Scientific Inc (US).