Julia Gross recently penned an article in Focus Money shedding light on the USA’s reluctance to do business with pharmaceutical manufacturers from China, and the considerable market consequences for contract manufacturers. In this summary, we capture key points from the interview and provide a link to the full article in German. 

Since the onset of the COVID-19 pandemic, the article highlights the reliance on Chinese suppliers. As a result, there have been initiatives in the US and plans in the EU to bring drug production back home, framed as protecting vital industries akin to the tech sector. 

This shift has caused unease among Contract Development and Manufacturing Organisations (CDMO) and Contract Research Organisations (CRO), which typically handle significant portions of production, research, and development for pharmaceutical and biotech companies in the Asia-Pacific region. 

This would severely restrict the opportunities for healthcare companies to work with Chinese CDMOs, including Wuxi Apptec and Wuxi Biologics. “More half of their turnover comes from US customers,” states Paul de Mestier. 

What lies ahead for the future of CDMOs and CROs? 

“Pharmaceutical and biotech companies want to work with local partners,” states Raphael Bidaut. 

The article highlights the challenges in investing in companies that operate in the Contract Development and Manufacturing Organization (CDMO) and Contract Research Organization (CRO) space, but it also sheds light on three promising shares with investment potential. 

Read the full Focus Money article in German 

Paul de Mestier

Investment Banking | Healthcare

Raphael Bidaut

Investment Banking | Healthcare