Drug Discovery Services Market Analysis

Drug Discovery Services Market Analysis

By process, the drug discovery services market is classified into target selection, target validation, hit-to-lead identification, lead optimization and candidate validation. The lead optimization segment accounted for 25.9% of the market share in 2022. Lead optimization is one of the critical processes in drug discovery services that involves refining and optimizing potential drug candidates to improve their efficacy, safety, and pharmacological properties. Furthermore, lead optimization aims to enhance the drug candidate's pharmacokinetic properties, such as absorption, distribution, metabolism, and excretion to enhance the drug bioavailability and therapeutic outcomes. Also, it contributes to reducing potential toxicity and adverse effects, making the drug candidate safer for use in humans.
 

Based on type, the drug discovery services market is segmented into chemistry services and biological services. The chemistry services are expected to register around USD 32.8 billion by 2032. Chemistry services in drug discovery involve the synthesis and analysis of chemical compounds to identify and optimize potential drug candidates. These services provide pharmaceutical and biotechnology companies with expertise in medicinal chemistry, synthesis of novel compounds and structure-activity relationship studies. Also, they enable the design and synthesis of diverse compound libraries for screening and identification of potential drug candidates.
 

By drug type, the drug discovery services market is segmented into small-molecule drugs and large-molecule drugs. The small-molecule drugs segment accounted for significant market revenue in 2022 and is expected to grow at 14.4% CAGR through 2032. Small-molecule drugs are widely used in the pharmaceutical industry owing to their oral bioavailability, diverse chemical structures, and favourable pharmacokinetic properties. Adoption of drug discovery services for small molecule drugs helps to identify and optimize small-molecule drug candidates with desirable properties such as potency, selectivity, and safety. They often have lower manufacturing costs and simple formulation requirements making them cost-effective to produce and distribute.
 

The therapeutic area in drug discovery services market is categorized into diabetes, neurology, oncology, infectious diseases, and other therapeutic areas. Oncology segment accounted for USD 4.3 billion market revenue in 2022. The rising burden of oncology will accelerate the adoption rate of drug discovery for novel cancer therapeutics. Drug discovery services in oncology provide specialized expertise, resources, and technologies to identify and develop innovative drugs targeting cancer. Furthermore, owing to the complexity of cancer and growing demand for targeted therapies, pharmaceutical companies are majorly focusing on drug discovery activities to accelerate drug discovery process and development of new cancer therapies.
 

The end-user in drug discovery services market is divided into pharmaceutical & biotechnology companies, contract research organizations and other end-users. Pharmaceutical & biotechnology companies segment accounted for nearly 69% market share in 2022. Pharmaceutical and biotechnology companies are the major end-users of drug discovery services, as these services enable to access a broader range of chemical libraries and screening platforms. The drug discovery service helps pharmaceutical and biotechnology to increase the chances of identifying potential drug candidates and enhance their product offerings.
 

North America drug discovery services market accounted for over 43.8% revenue share in 2022. The increasing prevalence of chronic disease and rising value for novel drugs is expected to boost the market growth. For instance, in 2020, according to the American Cancer Society, over 1.8 million new cancer cases were reported, and 606,520 people died of cancer in U.S. This has led to increasing demand for drug discovery services and novel therapeutics for oncology treatment. Furthermore, presence of major pharmaceutical and biotechnology companies and contract research organizations along with favorable regulatory environment.