Custom synthesis (CDMO): Cycles

How Covid created a boom, a hangover and a GLP-1 rebound

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

CDMO revenue cycles follow innovator pipelines, biotech funding and big product launches or failures, not commodity prices. COVID created a 2020-2022 boom (vaccines, antivirals), followed by a 2023-2024 hangover as biotech funding fell and customers destocked. GLP-1s, ADCs and geopolitical reshoring drove the 2025-2026 upswing. Indian CDMO margins track one or two large contracts each, so they are lumpy.

The spread to watch EBITDA margin

Lonza 31.6% (2025), Lonza small molecules 41.8%, Bachem 30.9%, Divi's 32.6% (FY26), Laurus 26.8%, Syngene 25%.

Booms and busts

2020-2022
COVID vaccine and antiviral manufacturing; WuXi AppTec revenue reached RMB 39.4 billion in 2022 with Paxlovid-related work; Divi's revenue peaked in FY22 (about Rs 8,960 crore, indicative) on COVID-related custom synthesis.
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2023-2024
COVID revenue fell away and biotech funding dried up. Divi's revenue fell to about Rs 7,770 crore in FY23 (indicative); WuXi AppTec revenue was about flat at RMB 39.2 billion in 2024 (derived from GEN growth rate). The BIOSECURE bill passed the US House (Sept 2024), lifting Indian CDMO valuations.
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2025
Lonza sales up 21.7% at CER with 31.6% margin; WuXi AppTec up 15.8%; Bachem up 19.2% LC. BIOSECURE enacted 18 Dec 2025.
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FY26 (India)
Laurus CDMO up 36% and margin to 26.8%; Divi's custom synthesis up 15.8% in Q4; Piramal CDMO down 10% on destocking; Syngene margin fell from 29% to 25% on a biologics client.
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What drives the cycle

Biotech funding. Early-stage demand for CRO-CDMO services follows venture and public biotech funding.
Blockbuster launches (GLP-1, ADCs). Single products can fill whole plants.
US-China policy (BIOSECURE, 1260H, tariffs). Moves contracts away from WuXi; benefits India, Korea, Europe, but contracts move slowly due to 5-year grandfathering.
Patent cliffs. Lost exclusivity cuts commercial volumes for innovator CDMOs.

Metrics to track

Metric	Why it matters	Where to track it
CDMO quarterly revenue and order books	demand	Lonza, WuXi, Divi's, Syngene, Laurus results
Biotech venture funding	early pipeline	industry trackers
OMB biotechnology company of concern list (due Dec 2026)	scope of BIOSECURE	OMB, Federal Register