How mid-tier CDMOs are catching up

For years, digital transformation in pharmaceutical manufacturing has been the domain of Big Pharma and the largest Contract Development and Manufacturing Organization (CDMO) companies with the capital to deploy manufacturing execution systems (MES), digital twins, and enterprise-wide data lakes. But that’s changing. A quiet arms race is underway among mid-tier CDMOs, and the stakes are rising fast.

The gap is widening. At CDMO Live 2025, Dave O’Gara, a consultant at digital-manufacturing tech firm Aizon, painted a stark picture: When you move into the mid-range CDMOs and smaller CMOs, it’s not so active. The data backs him up. A PharmaSource survey of 50+ global CDMOs found that 60% operate at preliminary digital maturity levels, while 92% report that sponsors are now raising digital requirements in contract negotiations. Digital readiness is shifting from competitive advantage to market requirement.

The baseline is low. Only 27% of CDMOs have integrated electronic batch records; just 25% use manufacturing execution systems. Many still operate on paper. The challenge is moving from manual to digital, then from digital to analytics and AI. A common industry warning applies: don’t digitize the chaos, first you need to fix the process.

Why now? Two reasons on sight. First, sponsors are demanding digital connectivity. According to a 2025 PharmaSource-MasterControl survey of more than 50 global CDMOs, zero CDMOs report full digital integration with sponsors today, yet 92% hear these requirements in negotiations. Second, the complexity of advanced therapies, namely cell and gene, xRNA, ADCs—makes pre-digital processes untenable. Managing such technical complexity with legacy systems is no longer scalable.

Who’s making moves? Mid-tier players are starting to act. Recipharm, a global CDMO with over 5,000 employees, secured a Gates Foundation grant to develop AI-enabled manufacturing simulators for virtual process development and predictive maintenance. Phlow Corp., a U.S.-based CDMO, has integrated an AI-driven MES to accelerate production timelines and improve quality. Wheeler Bio has partnered with Mitsubishi Corporation to extend commercial reach for its US-based ModularCMC platform to Asia-Pacific clients. Even at the smaller end, Axio BioPharma is using AI to examine and integrate manufacturing data. Centrix Pharma Solutions has partnered with the University of Sussex on a £375k Innovate UK KTP. These investments are moving from nice-to-have to table stakes.

The bottom line. For mid-tier CDMOs, the choice is no longer optional. Sponsors are asking. Competitors are investing. The digital divide is widening—and those who wait risk being left behind.