Northbrook, IL 60062 -- (SBWIRE) -- 09/05/2023 -- Drug Discovery Services Market is undergoing substantial growth, with its estimated revenue reaching $20.6 billion in 2023. This robust upward trajectory is projected to continue, aiming for an impressive $41.3 billion by 2028, signifying a remarkable Compound Annual Growth Rate (CAGR) of 14.9% during the 2023-2028 period, as per the latest report from MarketsandMarkets™.

Several key factors are fueling this expansion. Firstly, pharmaceutical and biopharmaceutical companies are significantly increasing their Research and Development (R&D) expenditure, which directly contributes to the market's growth. Moreover, the expanding R&D pipeline has created a surging demand for enhanced analytical testing outsourcing services. Initiatives focusing on researching rare diseases and orphan drugs further amplify the market's momentum. Additionally, the high costs associated with in-house drug development have pushed more organizations towards seeking external drug discovery services.

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Key Market Players:

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).

Drug Discovery Services Market Dynamics:

Drivers:
1. Growing R&D expenditure in pharma-biotech sector
2. Increasing drug R&D pipeline and rising reliance on outsourcing
3. Initiatives for research on rare diseases and orphan drugs
4. High cost of in-house drug development

Restraints:
1. Stringent regulations governing drug discovery and animal usage

Opportunities:
1. Technological advancements and new drug discovery techniques
2. Rising demand for specialized testing services among end users
3. Patent expiries of key biologics
4. High growth prospects in emerging markets

Challenges:
1. Shortage of skilled personnel

Trends:
1. Adoption of AI in drug discovery
2. Increased outsourcing to emerging Asian economies
3. CRO industry consolidation
4. Integrated end-to-end R&D service offerings

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The chemistry services segment accounted for the largest share of the type of segment in the drug discovery services market in 2022.

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 2022. Growth in this market segment is mainly due to the vast application of chemistry services in multiple early drug development phases to deliver robust candidates for drug discovery. The capacious use of chemistry in academics & research institutes, biotechnology companies, and large scale pharmaceutical companies also support the market growth.

The biologics segment accounted for the fastest growing share of the drug type segment in the drug discovery services market in 2022.

Based on drug type the drug discovery services is segmented into small-molecule drugs and biologics. The fast growth of this segment can be attributed to increasing number of biologics in the pipeline, the increasing focus of biopharmaceutical companies on developing biologics for various therapeutic areas, the development of biologics, the high cost of biologics development, the complexity of the biologic drugs, and safety and manufacturing challenges associated with biologics are driving pharma biotech companies to outsource biologic drug discovery and development to experienced service providers.

The Asia Pacific region is the fastest-growing region of the drug discovery services market in 2022.
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 emerging middle class, rising government spending for pharmaceutical R&D, growing therapeutic area expertise, and rapid expansion of pharmaceutical and biopharmaceutical industry in the region.

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Recent Developments:

- In February 2023, Charles River Laboratories (US) announced a multi-program agreement with Pioneering Medicines, an initiative of Flagship Pioneering (US), allowing access to its Logica AI platform to discover small-molecule drugs.

- In February 2023, Evotec SE (Germany) and Related Sciences (US) expanded their partnership for an integrated multi-target drug discovery agreement. The two companies aimed to select, discover, and develop precisely targeted medicines for unmet patient needs.

- In January 2023, Charles River Laboratories (US) acquired SAMDI Tech, Inc. (US), which offers label-free HTS solutions for drug discovery research. The acquisition offered CRL expertise in label-free HTS MS platforms and created a comprehensive library of drug discovery solutions.

- In April 2022, Charles River Laboratories (US) and Valo Health, a data-driven AI company, launched Logica, an AI-powered drug discovery services.

Drug Discovery Services Market Advantages:

- The drug discovery services market is highly competitive and is expected to witness significant growth over the forecast period.

- The services provided by drug discovery companies can help pharmaceutical companies accelerate the drug development process, enabling them to bring new drugs to market faster.

- Drug discovery services can help reduce the cost and time associated with drug development and reduce the risk of failure during clinical trials.

- The drug discovery services market offers a wide range of services such as target identification, hit identification, lead optimization and preclinical development, which can help drug developers identify and develop novel drugs more efficiently.

- The services provided by drug discovery companies can also help pharmaceutical companies reduce the cost of drug development and improve their bottom line.