Biopharma's Battle for Long-Term Manufacturing Contracts

Lonza has raised its medium-term growth ambitions, targeting average annual organic sales growth of 10–13% as it focuses on its contract manufacturing business.

The announcement comes amid a series of substantial biologics manufacturing agreements, with pharmaceutical companies committing to external production years in advance.

These contracts can secure valuable long-term business for CDMOs, but they also bring financial and operational commitments. A major customer can underpin years of revenue while leaving a manufacturer exposed if production requirements change.

What matters is how much of that future business manufacturers can reliably deliver, on what terms, and who carries the risk.

Visiongain Top Takeaways

Major contracts are securing capacity years in advance: Early commitments improve revenue visibility but can leave CDMOs heavily dependent on individual customers.
Integrated services bring benefits and risks: Combining development and manufacturing can simplify delivery while increasing reliance on a single provider.
Specialist CDMOs can compete on more than scale: Technical expertise, regional capabilities and manufacturing costs can help smaller providers win business.

Long-Term Contracts Are Raising the Stakes for CDMOs

AGC Biologics secured a major customer commitment in July 2026, before its new Yokohama facility in Japan had begun commercial production.

The agreement reserves half the site’s mammalian manufacturing capacity for five biologics programmes, with a minimum of 35 batches annually. AGC expects the multi-year contract to be worth hundreds of millions of dollars, with commercial manufacturing scheduled to begin in 2027, subject to regulatory approvals.

Other deals show the scale of spending being committed to external manufacturers. Samsung Biologics secured a US$262 million manufacturing contract with a European pharmaceutical company in September 2026, extending through 2033.

FUJIFILM Diosynth Biotechnologies signed a ten-year manufacturing and supply agreement with Regeneron in April 2025, representing an estimated investment of more than US$3 billion in US production of commercial biologic medicines.

The agreements offer different levels of commercial certainty. AGC has secured substantial demand ahead of production, while FUJIFILM’s deal supports medicines already on the market.

Headline values also warrant scrutiny. Minimum volume commitments, regulatory approvals and options for additional work can all affect how much announced business ultimately becomes revenue.

Large contracts provide a basis for long-term planning, but their financial value depends on what customers are committed to purchase and what manufacturers must spend to deliver it.

Integrated Services Are Expanding CDMO Relationships

Lonza’s expanded agreement with a major US biopharmaceutical company in July 2026 shows how established customer relationships can grow into larger manufacturing commitments.

The deal adds two commercial biologics programmes, with options for two more, to an existing partnership. Manufacturing will span Lonza’s US facilities, supported by drug substance and drug product capabilities in Europe. Lonza estimates that the wider portfolio of agreements with the customer could be worth several billion Swiss francs cumulatively.

Integrated manufacturing is also attracting biosimilar developers. In July 2026, Germany’s Formycon partnered with OneSource Specialty Pharma to combine drug substance and drug product manufacturing at OneSource’s Bengaluru facility in India.

Bringing these services together can reduce coordination between suppliers and make technical transfers easier to manage. It also gives CDMOs opportunities to win additional work as customers advance products towards commercial supply.

The arrangement carries risks for pharmaceutical companies, however. Relying on one provider for multiple manufacturing stages can create operational dependencies that are difficult to unwind if quality problems, delays or capacity constraints emerge.

Where Can Specialist CDMOs Compete?

Scale is an advantage in commercial biologics manufacturing, but smaller providers can compete where customers need specialist processes, flexible production or expertise in particular therapies.

Biosimilars present opportunities for manufacturers that can maintain reliable supply at competitive costs. Other programmes may require technical capabilities that larger providers do not prioritise.

The difficulty is achieving sufficient business volume to justify those specialist investments, particularly when individual development programmes remain uncertain.

Market Outlook: Growth Is Only Part of the Picture

Visiongain forecasts the global biopharmaceuticals contract manufacturing market to grow from US$20.89 billion in 2026 to US$69.11 billion by 2036, representing a CAGR of 12.7%.

Large contracts may bring years of revenue, but their profitability depends on pricing, production costs and the investment needed to fulfil them.

Lonza’s latest ambition to raise its core EBITDA margin into the high thirties makes that distinction clear. As outsourcing grows, CDMOs will need to demonstrate that substantial customer commitments translate into sustainable financial returns.

Visiongain Insight

Growth in biologics outsourcing does not translate into equal demand for every manufacturing service. A CDMO expanding clinical production may face a very different opportunity from one investing in commercial drug substance manufacturing or fill-finish.

The distinction matters when assessing new facilities. Companies need to examine where demand is expected to emerge, when that demand may become commercial and whether their existing capabilities can serve it. An attractive market forecast alone is not a sufficient investment case.

From Visiongain: Contract Manufacturing & CDMOs Hub

Visiongain’s Contract Manufacturing & CDMOs Hub brings together market forecasts and competitive intelligence covering pharmaceutical outsourcing, biologics and advanced therapies.

Related research:

Researching several manufacturing markets? Visiongain offers multi-report packages and tailored research to support market assessment, competitor benchmarking and investment decisions. Get in touch to discuss your research requirements.