CXO means outsourcing services for pharmaceutical research and production. These companies mainly provide outsourcing services for pharmaceutical companies, medical institutions and medical device institutions through contracts. Due to the long process and complicated links of new drug research and development, it is extremely uneconomical for pharmaceutical companies to take all the processes. The disassembly of assembly line and professional division of labor have produced the demand for outsourcing CXO (pharmaceutical R&D and production outsourcing), including CRO outsourced by R&D and CMO/CDMO outsourced by production. CRO is the abbreviation of R&D pharmaceutical outsourcing enterprise. Simply put, it is to provide professional and integrated R&D, clinical and reporting services for pharmaceutical companies, greatly reduce the R&D expenses of pharmaceutical companies and accelerate the clinical process of new drugs. CMO/CDMO enterprises of new drug R&D undertake the production task of R&D, so that the entrusted enterprises can focus on R&D. Among them, CMO enterprises produce customized APIs, intermediates and preparations. For the new drug research and development business of the entrusted enterprise, it undertakes the production tasks in the process of new drug research and development, and improves the efficiency of new drug research and development through specialized division of labor. CDMO mode is to optimize the technical route for the entrusted enterprises and further improve the efficiency of new drug research and development.
To sum up, the patent cliff, the difficulty of R&D and the decrease of return on investment all force pharmaceutical companies to seek an R&D model that can save R&D investment, speed up the listing of drugs and reduce the risk of R&D activities. Compared with the internal research and development of pharmaceutical companies, CXO can significantly improve the research and development efficiency of pharmaceutical companies and maintain the comparative advantage of research and development costs. The investment of large pharmaceutical companies in R&D has increased. Based on the factors of reducing risks and controlling costs, the willingness to outsource is also increasing. However, small and medium-sized biotechnology companies get funds to invest in R&D through financing. Because of their small scale, they rely more on the integrated solution of CRO/CDMO. In addition to optimistic about the trajectory of the industry itself, some people also said that many clinical trials abroad were forced to suspend due to the epidemic, as long as they were looking for CRO enterprises in non-epidemic areas for research and development. For example, WuXi PharmaTech, which has entered the top ten of CRO in the world, may undertake more overseas orders.