Small Molecule Drug Discovery Market is expected to reach US$ 106.77 Billion by 2031

Oncology Segment to Bolster Small Molecule Drug Discovery Market Growth During 2023–2031

According to our new research study on "Small Molecule Drug Discovery Market Forecast to 2031 – Global Analysis – by Therapeutic Area and Process/Phase," the market was valued at US$ 50.93 billion in 2023 and is projected to reach US$ 106.77 billion by 2031; it is anticipated to record a CAGR of 9.7% from 2023 to 2031. The small molecule drug discovery market report emphasizes the trends prevalent in the global market, along with drivers and deterrents affecting its growth.

The flourishing pharmaceutical industry with a surge in R&D activities and the growing inclination toward outsourcing are factors contributing to the small molecule drug discovery market growth. However, high drug development costs hamper market growth. Further, the growing adoption of artificial intelligence in drug discovery is expected to bring new small molecule drug discovery market trends in the coming years.

Small Molecule Drug Discovery Market Share, by Region, 2023 (%)

Source: The Insight Partners Analysis

Growing Inclination Toward Outsourcing Drive Small Molecule Drug Discovery Market

In the last few years, the pharmaceuticals industry has witnessed rapid growth in outsourcing services, driven by many factors such as growing use of small molecules, increasing API complexities, and rising need to reduce development costs. Large pharmaceutical companies are outsourcing R&D activities to speed up the drug development process, as well as to reduce their development and manufacturing costs.

Pharmaceutical firms rely on CROs to minimize their high fixed costs of in-house development. Increasing complexity in the development of NMEs has created a need for niche capabilities that pharmaceutical companies prefer to outsource. With new drug approvals on the rise, robust clinical development pipeline and the demand for outsourcing have increased. For instance, in December 2023, the Food and Drug Administration (FDA) granted accelerated approval to pirtobrutinib (Jaypirca, Eli Lilly and Company) for adults with chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) who have received at least two prior lines of therapy, including a BTK inhibitor and a BCL-2 inhibitor. Many biotechnology companies are taking advantage of CROs to expand their small molecule pipeline. The trend of small molecule outsourcing is likely to strengthen in the coming years as companies continue to streamline their manufacturing footprints. The manufacturing facilities need trained personnel with the technical knowledge of bioprocessing and process engineering. Managing the attempts to reach the first clinical trial using a manual and open manufacturing method and then building a more commercially suitable process can be tricky. Thus, manufacturers choose to work with CROs to accelerate their clinical studies and commercialization operations. CROs provide product development, clinical trial support, manufacturing, and commercialization services to small molecule drug companies on a contract basis. Partnering with CROs enables scalability and access to technical expertise without overhead costs, along with higher speed to market and greater cost efficiencies for biologics manufacturers. Thus, the surging preference for outsourcing small molecule drug manufacturing operations to CROs fuels the small molecule drug delivery market growth.

The small molecule drug discovery market analysis has been carried out by considering the following segments: therapeutic area, process/phase, and geography. Based on therapeutic area, the small molecule drug discovery market is segmented into oncology, central nervous system, cardiovascular, respiratory, orthopedics, immunology, rare diseases, and other therapeutic areas. The oncology segment held the largest share of the market in 2023. Cancer is one of the major global health problems. As per the World Health Organization (WHO), in 2022, an estimated 20 million new cases of cancer were diagnosed worldwide, and 9.7 million people have succumbed to death. The rising cases of cancer are driving the demand for targeted therapies. Therefore, pharmaceutical companies are motivated to make considerable investments to discover small molecule drugs that can effectively treat different types of cancer. By December 2020, a total of 89 small anti-cancer molecules were approved in the US and China. Moreover, small molecule compounds are administered orally, allowing them to translocate through the plasma membrane and interact with the cytoplasmic domain of cell-surface receptors and intracellular signaling molecules. Small molecule inhibitors (SMIs) have been developed to offer targeted therapies to cancer patients since 2001 and have proven to be highly efficient. SMIs are being extensively discovered to treat different types of cancers.

Below are a few investments made in the R&D of small molecule drugs for oncology therapeutics:

• In April 2024, Flindr Therapeutics BV (a precision oncology therapeutics startup) secured US$ 20.16 million (€20 million) in Series A funding to expand its pipeline of first-in-class small molecule inhibitors for cancer treatment.
• In November 2022, BioNTech SE and Ryvu Therapeutics S.A. (a clinical-stage company developing oncology therapeutics) entered into a multi-target research collaboration to develop multiple small molecule programs targeting immune modulation in cancer and potential applications in other diseases. BioNTech received a global, exclusive license to develop and commercialize Ryvu’s STING agonist portfolio as standalone small molecules, including as monotherapy and in therapeutic combinations.

Further, many players in cancer drug discovery are developing cost-efficient therapeutics for a large patient population. A few preclinical data have revealed the advances made in protein degrader developments. These are a new class of drugs that attempt to eliminate certain disease-causing proteins from cells more effectively than SMIs.

By process/phase, the market is segmented into target discovery, target validation, lead generation and refinement, and preclinical development. The lead generation and refinement segment dominated the market in 2023. On confirmation of a drug target, researchers seek to identify molecules that can interact with the target to obtain desired biological reactions. A hit compound is a molecule showing the desired activity type in a screening assay. Pharmacologically relevant screening assays for hit discovery are crucial for the hit-to-lead selection process. Lead compounds are generated from various collections of hits by refining the screening criteria to enable the selection of the most promising molecules for further development. Techniques such as high throughput sequencing and others are used for lead compound generation. The results of the target validation stage can assist in lead compound generation. Lead compounds are chemical compounds that demonstrate desired biological or pharmacological activity and initiate the development of a new clinically relevant compound. The lead compounds are tested to refine or optimize their efficacy and mechanism. The objective of lead refinement is to deliver one or more candidates for evaluating GLP safety studies. The molecules obtained in the lead generation process are used as the starting point for detailed chemical modifications to improve their target specificity and selectivity. Refinement of the compounds is done by medicinal chemists using advanced organic synthesis methods or by biotechnological processes for the production of biological products. Lead identification/optimization is one of the most important steps in drug development. Once a molecule is generated, it is further checked for its ADMET (i.e., Absorption, Distribution, Metabolism, Excretion, and Toxicity) properties. If the molecule has no toxicity or mutagenicity, it can be used as a lead molecule. Further optimization improves the quality of lead molecules. As the industry increasingly emphasizes targeted therapies, the lead generation process evolves to prioritize compounds that interact specifically with validated targets, thus improving the chances of successful outcomes.

The geographic scope of the small molecule drug discovery market report includes the assessment of the market performance in North America (the US, Canada, and Mexico), Europe (Spain, the UK, Germany, France, Italy, and the Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and the Rest of Asia Pacific), South & Central America (Brazil, Argentina, and the Rest of South & Central America), and the Middle East & Africa (South Africa, Saudi Arabia, the UAE, and the Rest of Middle East & Africa). 

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