Few people understand the contract pharmaceutical manufacturing landscape as thoroughly as Dr. Robert W. Lee. With a PhD in physical biochemistry and more than 36 years in the pharmaceutical industry, Dr. Lee has watched the CDMO sector transform from a niche capacity play into one of the most strategically vital corners of pharmaceutical manufacturing.

Dr. Lee’s career spans some of the most consequential chapters in drug delivery science. From building an analytical sciences department at pioneering nanotechnology companies to leading formulation efforts that underpinned multiple commercial products to his current role as a senior scientific and business leader at Agno Pharmaceuticals, he has lived the evolution of contract manufacturing firsthand.

Today, Agno Pharmaceuticals, with its global presence, is expanding its footprint in complex, specialty pharmaceutical manufacturing, including active pharmaceutical ingredients (APIs), chemical intermediates (CIs), regulated starting materials (RSMs), and finished drug products. In this interview, Dr. Lee shares his perspective on where the CDMO industry has been, where it stands now, and where it is headed over the next five years.

Q: How Has Contract Manufacturing Evolved Over Your Career?

When I entered the industry, outsourcing to a contract manufacturer was essentially a capacity decision. If your internal lines were full, you found someone with an open reactor or a free fill line. The relationship was transactional; you paid for space and time, and you moved on. There wasn’t much strategic thinking behind it.

What changed everything was the growing complexity of the molecules and the delivery technologies required to make them work. As more drug candidates emerged with poor water solubility — today, roughly 80 percent of the small molecules we formulate at Agno have low aqueous solubility — it became increasingly impractical for pharmaceutical companies to build and maintain in-house infrastructure for every technology they might need. Nanomilling, lipid-based delivery systems, extrusion, and drug implantable devices: these are not typical pharmaceutical unit operations, and establishing that kind of capability internally requires an enormous investment in infrastructure, talent, and time.

That’s when the CDMO industry started to shift. Specialty contract manufacturers weren’t just filling capacity anymore; we were solving problems that clients genuinely couldn’t solve on their own. And as the virtual pharma model emerged, with small and mid-size companies built around a promising molecule and little else, CDMOs became true development partners, taking programs from concept through clinical and, in some cases, all the way to commercial.

The other major shift I’ve witnessed is the move from capacity-based outsourcing to strategic partnerships. The best CDMO relationships I’ve been part of are ones where the client and the CDMO are genuinely invested in each other’s success, sharing risk, sharing knowledge, and building something together. That’s the model I believe in, and it’s the model we’re building at Agno.

Q: What Is the Current State of the CDMO Industry?

The CDMO industry is large, growing, and increasingly polarized between generalists competing on price and specialists competing on capability. I think that bifurcation is going to continue, and frankly, it’s healthy. Not every program needs a specialty CDMO. But for complex drug delivery, biologics, aseptic fill-finish, drug-device combination products, that’s where differentiation really matters.

At Agno, we’ve made a deliberate choice to play in the complex, hard-to-replicate market segments. Our capabilities in nanomilling, lipid-based systems, microspheres, aseptic manufacturing, drug implantable devices, and drug-device combination assembly put us in spaces where commoditization is less of a threat and where we can genuinely add value to a client’s program.

The competitive landscape has also been shaped by consolidation. Agno itself is a good example. When I started at Particle Sciences, we were a privately owned small business. In September 2015, we became part of Lubrizol who sold us to Agno in December 2023. Agno brings global scale: more than 700,000 square feet of manufacturing space, deep API and chemical intermediate capabilities, and facilities in China and the U.S. That integration means we can now offer clients something closer to a true one-stop shop. We can offer clients everything from API to the finished dosage form, analytical testing, stability, and all of their CMC needs under one roof, metaphorically.

The regional dimension matters too. Our global structure gives clients options: manufacturing in China for speed and cost efficiency, and U.S.-based manufacturing when IP protection or domestic sourcing is the priority.

Q: Which Technologies Are Reshaping Pharmaceutical Manufacturing?

The industry-specific technology that will have the most significant impact on pharmaceutical manufacturing over the next decade is, without a doubt, continuous manufacturing. Continuous manufacturing is already a reality for some of what we do here at Agno. Hot melt extrusion, for example, is inherently a continuous process; you scale up by extending processing time, not by redesigning the process from scratch. Every day you can shorten a development timeline could be worth $100,000 or more, depending on the value of the asset. But more importantly, the sooner you get a drug to market, the sooner you can help patients who are suffering. That scalability and batch-to-batch reproducibility are real advantages in pharmaceutical manufacturing, where consistency is both a quality imperative and a regulatory expectation.

Q: Where Do Biologics Fit in Agno Pharmaceutical’s Portfolio?

Biologics are a natural fit for what we do, specifically with peptide- and protein-based programs. I’m genuinely excited about that space because of our manufacturing philosophy: our current commercial site is configured for low-volume, high-value products, with no minimum batch size. That is an unusual capability. Most contract manufacturers want to run hundreds of thousands or a million units per batch. We’ll run a few thousand.

In biologics, a single dose may be thousands to tens of thousands of dollarsso minimizing hold-up volume and maximizing unit yield per batch is critical. Some small molecule drugs are also very costly withThink about it: if you’re making a product at that price point, waste is extraordinarily expensive. Our site is set up to handle exactly that kind of program, and I think that’s a meaningful differentiator as more high-value biologics move through development pipelines. On the other end of the spectrum, we just purchased a new building that will house higher capacity filling lines.

Q: How Are Strategic Partnership Models Evolving in the CDMO Space?

This is the area I’m probably most passionate about, because I think the old fee-for-service model leaves a lot of value on the table for clients and for CDMOs alike. At Agno, we’ve been moving deliberately toward deeper, more creative partnerships. One example I’m proud of: we recently entered into a cost-sharing arrangement with a client to build out a new commercial manufacturing line. The equipment required is highly specialized; there’s no off-the-shelf solution. And rather than asking the client to absorb the full capital cost, we agreed to split it. Once the commercial product launches and revenue starts flowing, we’ll reimburse the client’s full 50 percent share of the upfront investment. This approach de-risks both sides. The client isn’t 100 percent on the hook for specialized equipment, and we get a partner who is equally committed to making the program work.

We’re also exploring partnerships with other CDMOs, including some that might technically be considered competitors. In one case, we’re developing a model where we provide bulk nanoparticle suspension for non-sterile products, then hand off to a partner with strong oral solid dosage form capabilities. The client benefits from our advanced drug-delivery technology and the partner’s manufacturing scale without managing two separate commercial relationships.

The other area where I see partnership models evolving significantly is drug-device combination products. As patient-centric dosage forms proliferate, giving patients the ability to self-administer medications at home rather than visiting a clinic, there’s a growing demand for CDMOs that can bridge the drug and device sides of these programs. We’re actively building relationships in that space, and I think it will be one of our most important growth areas over the next five years.

Q: What Is Driving Industry Consolidation, and What Does It Mean for CDMOs?

Consolidation has been a constant in this industry for as long as I can remember, and I don’t see it slowing down. The drivers are straightforward: scale advantages, broader capability sets, geographic diversification, and the capital requirements of modern pharmaceutical manufacturing. Private equity has become a major force as well; our private equity ownership has funded a significant expansion phase at Agno, including new isolator-based cleanrooms, a new commercial manufacturing center for intravaginal ring products, and a new building dedicated to commercial production.

At the same time, I want to be clear: scale isn’t everything. Some of the most innovative pharmaceutical programs in the world originate in startups with one compelling asset and no manufacturing infrastructure. Those companies need a CDMO that can provide what I sometimes call ‘adult supervision for CMC’ — rigorous scientific guidance, regulatory expertise, and the technical capability to take a program from a concept through to the clinic.

Competition from new entrants keeps all of us sharp. The best response to a competitive market isn’t to ignore it; it’s to stay close to your clients, understand what they actually need, and keep building capabilities and a culture that can deliver it. That’s something our new leadership has been very intentional about, and I think it’s going to be one of the defining factors in Agno’s growth.

Q: How Is the CDMO  Industry Addressing the Talent Challenge?

I’ll be honest: talent is hard. It’s hard to find, hard to retain, and hard to develop fast enough to keep up with where the science is going. Compensation is a real issue; pharmaceutical salaries are what they are, and if you’re not competitive, you won’t recruit or retain the people you need.

I believe that strong mentorship from experienced leaders is one of the most powerful tools we have. Technical knowledge in complex pharmaceutical manufacturing takes years to build, and that knowledge transfer between senior scientists and early-career professionals is something you can’t shortcut. Building a culture where that mentorship happens naturally,  where experienced people are invested in developing the next generation, matters enormously.

As Agno enters a growth phase, being able to identify and develop people who understand both the science and the regulatory environment of pharmaceutical manufacturing will be a genuine competitive advantage.

Q: What Does It Mean to Be a Good Neighbor and a Safe Manufacturer?

This one is straightforward for me: you do the right thing. Full stop. We take our environmental, health, and safety responsibilities seriously, not because a client is auditing us, although they are, but because it’s the right way to operate. Our China sites have been audited from an EHS perspective by multiple large pharmaceutical companies, and those audits are as rigorous as anything the FDA runs. That’s a standard we’re proud of.

Large pharma partners today have clear expectations. Every CDMO in their supply chain needs to meet baseline standards of doing the right thing. That means operating in compliance with all applicable regulations, protecting workers, and ensuring that what we do inside our facilities doesn’t pose a risk to the communities around us. We want to be good corporate partners and good neighbors. Protecting our people and our communities isn’t a compliance exercise — it’s just how we operate.

As we grow globally, maintaining that consistency across our U.S. and China-based operations isn’t optional; it’s foundational to client trust and to the kind of company we want to be.

 

Q: What Is Your Five-Year Outlook for the CDMO Industry?

Looking toward 2030, I see several trends that I’m highly confident about and a few wild cards worth watching.

Patient-centric dosage forms will continue to grow in importance. Long-acting injectables, implants, drug-device combination products, and self-administered therapies are all gaining momentum, and for good reason. I speak from personal experience here: I’ve received monthly intravitreal injections for a retinal condition. The first time a needle the size of a small harpoon came toward my eye, I understood immediately what it means to patients when a dosing interval extends from monthly to quarterly. That’s not a minor convenience improvement;  it’s life-changing. I use that story whenever I talk about long-acting injectables, because I think it’s important for people who make these products to understand what they mean to the people who need them.

Water-insoluble small molecules will remain a persistent formulation challenge. About 80 percent of what we formulate has low aqueous solubility, and I don’t see that changing. Advanced drug delivery technologies like nanomilling, lipid-based systems, and amorphous solid dispersions will remain essential.

Targeted delivery will become more central to development strategy. Rather than systemic dosing, I expect growing interest in getting active compounds precisely where they need to be: intratumoral injections for oncology, localized antibiotic delivery for infection prophylaxis, and site-specific approaches that improve efficacy and reduce systemic burden. Why bomb the whole body when you can get the drug exactly where it needs to go?

Artificial intelligence will be a genuine disruptive force, particularly in the 505(b)(2) space, where AI-assisted candidate selection and pathway mapping (IP, regulatory, reimbursement, CMC, etc.) can compress development timelines dramatically – and significantly derisk assets. The financial value is real. But more important to me is the patient value: the faster we get safe, effective drugs to the people who need them, the better.

My advice to everyone in this industry: stay close to your clients. Listen carefully to what they’re actually asking for, not what you assume they need. And be willing to evolve your service model around that reality, not around what the industry has historically offered.

Q: Talk about the Importance of Finding the Right CDMO Partner

After 36 years in this industry, the thing I believe most strongly is this: the best CDMO relationships are not transactions. They’re partnerships built on trust, transparency, technical alignment, and a genuine shared investment in getting products to patients.

If you’re evaluating CDMO partners, I’d encourage you to go beyond the technical checklist. Look at the culture. Ask whether the organization has the human and infrastructure resources to actually fulfill its commitments and whether the people you’re working with understand what you’re trying to do well enough to translate that into the right scope of work. If you find a CDMO willing to grow with you, one that can take you from ground zero through clinical and into commercial, that meaningfully de-risks your asset and makes it more attractive from an investment perspective.

That’s what we’re building at Agno Pharmaceuticals. A technically differentiated, globally capable, deeply client-centric CDMO that sees its clients’ success as its own. Whether you’re a virtual pharma startup with a promising molecule and no manufacturing infrastructure, or an established sponsor looking for a specialty partner on a complex program, I’d love to talk about how we can help.

Connect with the Agno Pharmaceuticals team to learn how we can support your next program from formulation development through commercial manufacturing.