Global pharma supply-chain services are a ‘$77bn profit pool’ amid looming patent cliffs

Recently in Preqin First Close, we explored private equity and VC’s growing focus on the fast-progressing biopharma supply-chain services industry. Here, we take a second look at some big activity in the space.  

Nobody wants to get old or sick. Demand for R&D in drug discovery and gene therapy is rising in tandem with an aging population and increasing cases of chronic disease. Global pharmaceutical revenue is projected to grow by 4.8% annually from 2025 to 2029, reaching $1.5tn, according to Statista. 

Preqin’s Deal Flow Monitor: Outlook 2025 revealed that private equity deal value in the healthcare sector rose in 2024, reaching a total $79bn across 819 transactions. 

Meanwhile in venture capital (VC), biotech accounts for two-thirds of total healthcare value – likely because of the strong focus on innovation in the sector, particularly in oncology, as well as neurodegenerative and cardiovascular diseases. Beijing-based VC firm K2VC told Preqin in December that they target biotech start-ups who are ‘developing innovative technologies with strong teams and impressive growth trajectories’. 

Last year, according to Preqin data, there were 1,202 VC deals in biotech globally, worth around a combined $28bn.* 


Value in the biopharma supply chain as patent cliffs loom

With significant patent cliffs on the horizon, biotech deal activity is expected to keep momentum over the next few years, particularly in specialty pharma and generics. According to our data, so far in 2025, there have been 203 deals. Large proportions of big pharma revenue will likely feel the impact, so asset managers will be waiting to see whether this sparks increased M&A activity to close pipeline gaps.  

In a recent survey by Grant Thornton, 45% of industry professionals said they believe life sciences M&A will increase in 2025, while only 11% expect it to decrease. 

So, the global supply chain has a tall order to fill. Analysis by McKinsey reveals global pharma supply-chain services as a $77bn profit pool, with ‘several growth pockets across the value chain’. These include large-molecule drug substance manufacturing, as well as finished dosage formulation for injectables.

McKinsey describes pharma supply-chain services as ‘an understudied segment of the pharma industry’.  It includes raw materials and input providers, biopharma contract development and manufacturing organizations (CDMOs), drug delivery and containment players, as well as companies that deal with packaging, storage, and distribution.

Its importance to the wider pharmaceutical industry means it’s consistently proved a resilient investment among both private- and public-market investors. Some LPs invest in pharma supply-chain services to avoid risks tied to the clinical or commercial success of individual drugs. 


Five big moves in pharma supply-chain services 

  1. In December, Novo Holdings, the controlling shareholder of Novo Nordisk, completed its acquisition of Catalent, a New Jersey-based CDMO, for $16.5bn, aiming to scale up production and meet the massive demand for weight-loss drugs like Wegovy and Ozempic.  

  2. In August, Audax Private Equity announced its $650mn acquisition of Avantor's Clinical Services division to bolster its portfolio in pharma supply chain services. 

  3. UK-based Constructive Bio secured $58mn in series A funding last September, with the aim of developing ‘microbial biofactories’ to create sustainable new materials and therapeutics. 

  4. In January this year, Tokyo-based bitBiome raised ¥400mn to support the company’s growth and advance biomanufacturing. 

  5. In VC, Enduro Genetics secured €12mn in series A funding in February. The Copenhagen-based synthetic biology start-up aims to transform biomanufacturing.


*Data pulled in March 2025.


Alina Garcia is Associate, BlackRock, and Libby Fennessy is Production Editor of Preqin First Close. 

Special thanks to Christina Taufan, Senior Associate in Preqin’s Company Intelligence team, based in New York. Preqin has 15 offices across the globe and a team of over 500 researchers. It combines technology and relationships built over 20 years to gather proprietary and public data on the alternative assets market. 

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The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.