Drawing on the insights of our leadership team, we’ve compiled a global perspective on the state of the bioanalytical industry in 2024. Through thoughtful discussions with our CEO, John Bucksath, and key team members Amy Mize, Mouhssin Oufir, and Brian Wile, KCAS Bio delivers a roadmap for navigating the complexities of this dynamic sector.
In this in-depth interview, KCAS Bio CEO John Bucksath discusses the profound shifts in the bioanalytical market during 2024, the impacts on both large pharma and biotech, and the global trends shaping the industry. The conversation covers monetary policy, legislative changes, and geopolitical challenges as they affect drug development and market dynamics.
Interviewer: John, what shape do you think the outsourced bioanalytical market took in 2024?
John Bucksath (KCAS Bio): In 2024, we saw some interesting transitions. Any market evolves from the previous year, so maybe I’ll back up a bit. In 2023, the market was grappling with the advancing changes in U.S. monetary policy, which, of course, impacts the world. Inflation and rising interest rates significantly affected the cost of capital (invested money).
In 2021, we saw a market respond to a “capital sugar high,” where the industry was moving as fast as possible to get drugs in development because time was the common denominator and capital was free-flowing. The largest challenges for the biotech community became finding capacity for outsourced development needs. By the start of 2024, that environment had flipped. Access to capital (money) became the “denominator,” in the equation and biotech companies with limited resources faced mounting challenges as the cost of capital increased and investors saw the market opportunity closing. Companies had to rethink their strategies as the assumption of easy funding disappeared.
Additionally, the Inflation Reduction Act created profound changes, particularly for innovators. Small molecule drug developers faced shortened intellectual property timelines, reducing their exclusivity periods. Imagine investing millions or billions of dollars in development only to have competitors replicate your data and compete with you almost immediately. This change in exclusivity protection drastically shifted investor decisions and forced many biotech companies to reassess their development plans and pipelines.
The biotech industry is unique in that many if not most companies do not intend to take molecule candidates through development and continue into commercialization themselves. The drastic change from the environment in 2021 to now created opportunities for large pharma to step in, purchase assets, and partner with struggling biotech companies in need of funding. Turn the clock back to 2021, and biotech companies had the upper hand, with large pharma willing to pay top dollar for their assets. By 2024, that dynamic reversed.
We’ve seen these correction periods before. The key for industry now is returning to stable growth and a predictable operating platform. With the U.S. election decided, I think we’ll see the industry refocus, as predictability in the market is crucial for long-term drug development planning.
What changes have you seen within large pharma during 2024, and what does this mean as we move into 2025?
Large pharma isn’t immune to market challenges. Many drugs affected by the Inflation Reduction Act belonged to large pharma, impacting their profits and creating cash flow challenges.
At the same time, the growing complexity of drugs and evolving market expectations put additional pressure on these companies. Wall Street demands growth and profitability, so large pharma had to adapt. This included evaluating merger and acquisition opportunities and adjusting portfolios to navigate market disruptions.
The GLP-1 market is a good example. It created what I’d call an arms race for companies with that technology. It was a highly competitive and optimistic space, but with more players entering, the competition intensified. While there are clear winners, there are also “me too” entrants trying to capture market share.
Overall, large pharma faced a complex environment in 2024. Each company responded differently, but the overarching challenges were consistent.
Given the global nature of the industry, what changes did you observe across the U.S., European, and APAC markets in 2024?
The geopolitical tensions between the U.S. and China—and, arguably, other regions—were significant. These tensions impacted CROs operating in those areas, especially concerning protection intellectual property assets.
For example, the story of WuXi and its challenges in the market place is now well known. The U.S. wants to protect its intellectual property, and rising political tensions placed drug development and IP under the microscope. This has created challenges for innovators, especially those relying on the APAC region for development services.
If the Biosecure Act becomes law, companies will face even more pressure to adjust their development strategies. Moving operations to different countries, dealing with new cultures, laws, languages, and navigating unfamiliar regulatory environments is challenging even in the best of times. When decisions are rushed due to geopolitical risks, the complexities increase exponentially.
Do you have any closing thoughts on where the industry might be heading next?
I’ve seen cycles like this before. My hope is that we’ll stabilize and move toward sustainable growth. The industry thrives on predictability, and with clearer policies post-election, I think companies will adapt and refocus.
It’s a challenging time, but it’s also an opportunity to innovate and strengthen partnerships. While the dynamics between biotech and large pharma have shifted, collaboration will be key to overcoming these challenges and driving the industry forward.
2024 has been quite a year of growth for KCAS Bio. Looking back, how do you feel about the organization’s journey and its global expansion efforts?
We’ve always been an investment-oriented organization rather than solely growth-focused. Keeping up with the demands of drug development is challenging, regardless of market conditions. A few years ago, we decided we wanted to be the most respected bioanalytical provider. That doesn’t necessarily mean being the biggest; it means becoming the provider of choice for our industry.
To achieve this, we’ve made significant investments in our capabilities, ensuring we’re equipped to deliver best-in-class services. This includes geographic expansion, harmonization with our partners—such as our Australian collaboration—and implementing cutting-edge instrumentation so our scientists have the tools they need to work on innovative therapies. These deliberate investments have fueled our growth in 2024, and I believe the formula for success remains the same: execute well and make thoughtful, strategic decisions, even during challenging times.
What other areas has KCAS Bio invested in to ensure continued success?
Beyond geographic reach and instrumentation, we’ve prioritized building robust operating and business systems. These systems provide our teams with advanced , accurate, up-to-date information so they can deliver reliable and defendable results efficiently. We understand that the evolution of drug development demands speed, precision, and adaptability.
Our commitment is to empower our operating teams to meet these challenges head-on. This involves harmonizing processes globally, ensuring consistent quality management across all sites, and fostering a culture of continuous improvement. It’s about creating an infrastructure that not only supports today’s demands but also positions us for sustainable growth.
It sounds like KCAS Bio is preparing for an even brighter future. What’s the vision for 2025, and what can clients expect?
2025 will focus on scaling and optimizing our systems to ensure reliability and adaptability as we grow. This includes continuing to enhance global quality management systems, standardizing business processes across sites, and staying aligned with cutting-edge technologies.
We’re also deeply committed to attracting and retaining top talent. It’s crucial to inspire our teams to deliver exceptional work while equipping them with the resources they need to handle the complexities of an expanding client base and diverse studies.
At the core of it all is our dedication to working on innovative therapies. As a former analytical chemist, I’ve seen firsthand the impact of a CRO’s role in supporting development of groundbreaking drugs, and I want our teams to have every opportunity to contribute to those kinds of advancements.
You’ve articulated a clear and inspiring vision. Any final thoughts you’d like to share with your clients and stakeholders?
We’re always reflecting on where we are and how we can improve. Continuous improvement is essential—if you’re not moving forward, you’re falling behind. For KCAS Bio, it’s not just about growth; it’s about growing the right way, with purpose and integrity.
Our clients can expect us to stay committed to their success by providing reliable, high-quality data and staying attuned to their needs. We’re here to make sure they have the confidence to make critical decisions, backed by the expertise and dedication of our team. As we move into 2025, we’re excited to continue building partnerships and tackling the challenges of this dynamic industry.
This interview highlights the resilience and adaptability required in the ever-changing bioanalytical landscape. As 2025 approaches, companies across the industry will continue to navigate complexities while striving for innovation and growth.
As KCAS Bio continues to navigate the dynamic landscape of drug development, its focus remains steadfast on growth, innovation, and excellence. With strategic investments in global harmonization, state-of-the-art instrumentation, and robust business systems, KCAS Bio is well-positioned to meet the evolving needs of its clients. Guided by a commitment to quality and purposeful expansion, KCAS Bio is dedicated to delivering reliable, high-impact solutions that empower the development of life-changing therapies.