Why biopharma needs asset-light manufacturing models now

While externalization and strategic collaboration are high on the agenda, some companies see strategic advantages in investing in manufacturing capacity, a key example being targeted buildouts for blockbuster drugs. Notably, Novo Holdings paid over US$11 billion in 2024 to acquire Catalent’s manufacturing sites, enabling Novo Nordisk to scale up manufacturing capacity of its GLP-1 therapies – at that point enjoying first-mover advantage in the anti-obesity market. At the other end of the spectrum, companies may be compelled to close entire sites outright if prospective externalization partners see limited commercial opportunities in their older, underutilized infrastructure. 

While no universal model fits all companies, the structural drivers mean many players stand to benefit from a more collaborative, asset‑light configuration.

One way forward: an asset-light biopharma future

Biopharma companies that follow this latter approach and explore Bioweave strategies for wider and deeper collaboration will have major opportunities to reimagine the entire product supply model. Working within their partner networks they will be able to pivot from the traditional “own to use” to more innovative “operate to collaborate” supply networks. This shift will enable companies to deploy an increasingly asset-light operating model, facilitated by an expanding network of strategic partners – diversifying beyond CDMOs to encompass professional infrastructure and real-estate firms, and a range of other funds and investors, including private equity partners.

Value areas and key considerations

Value levers

Yielding ownership and control of real estate assets, site services and manufacturing operations to a partnership network addresses some of the key inefficiencies and frictions within the established supply chain model. As shown in Figure 1, companies following this methodology can reduce fixed costs, free up capital, optimize site management responsibilities and overheads, and better monetize under-utilized manufacturing assets.

By leaning into external capabilities, companies can enable both right-sizing of operations (e.g. less/ the required duplications) and continuity of supply, including in the more challenging and complex new therapeutic modalities. When designed and executed properly, this model enables companies to deploy their financial and intellectual capital towards more value-generating investments – most critically in investing into discovering and developing new products that can help close the innovation gap and secure clinical advances and commercial growth.

To make this transition successful, companies need not only the technology platforms to enable more effective collaboration, but also the right mindset. The asset-light approach is a distinct change from the industry’s traditional standard operating procedure and involves companies relinquishing control over certain functions/ assets and properly managing the interfaces to unlock significant positive trade-offs. Companies also need the right alliance partners, which may be a mix of peer companies (e.g. via JVs), CDMOs, investors and others, depending on the depth of partnership and the commercial model each company chooses to pursue (see Figure 2). In every case, partners need to step up and take on more of the manufacturing and supply chain workload, responsibility and commitment.

Type of asset-light transactions

These novel manufacturing partnership constructs offer the life sciences industry a pathway to the Bioweave model of the future. Longer term, the Bioweave may be supplemented and even augmented by more ambitious solutions – from biopharmaceutical “gigafactories” operating as specialized supply hubs to serve multiple industry partners, to “slim factories” that achieve the same goals on a more specialized, satellite scale, perhaps focusing on regional. With the expanding capabilities of automation and AI, multiple downstream variations on these emerging supply chain constructs are possible. 

However the long-term strategy evolves, biopharma companies considering these opportunities today need to focus on seven critical needs near-term:

1. Building a strategic ecosystem to accelerate deeper and more frictionless collaboration between a network of stakeholders and partners.
2. Steering it based on data and AI/ digital capabilities to drive high-performing, increasingly virtual manufacturing networks and supply chains.
   
3. Streamlining and accelerating transactions to enable more effective integration of assets and more efficient coordination of operations around them.
   
4. Shaping new advanced frameworks to secure IP to enable sharing proprietary information with external partners while enforcing data security.
   
5. Developing and implementing new capabilities to build and manage the Bioweave ecosystem of partners, continuous improvements and the day-to-day collaboration.
   
6. Driving excellence across the value chain to develop and disseminate expertise and efficiency in all internal and external processes.
   
7. Managing complexity and mitigating risk to predict and offset the upstream and downstream challenges of complex, decentralized, multi-partner supply chains.

Taken together, these priorities define the operating blueprint for companies aiming to transition now, before capacity imbalance, cost pressures and competitive dynamics make the shift reactive instead of strategic.

An asset-light manufacturing and supply chain model will not be the answer for all biopharma companies. But for those that embrace this approach – and find the right partners to smooth the business model transition – this shift can offer a new way to redefine life sciences companies’ core value proposition and to unlock value growth into the future.

Biopharma leaders now face a decisive moment. Companies that pivot quickly to asset‑light, ecosystem‑driven manufacturing models will unlock capital, accelerate innovation and secure a structural advantage. Those that hesitate will be forced to adapt on far less favorable terms. The global EY organization is helping industry leaders make this shift now - designing ecosystem partnerships, enabling transaction pathways, securing IP, and deploying AI‑driven supply chain intelligence. The opportunity is clear: Move early, partner boldly, and build the manufacturing model that will win the next decade.

Fabio Nani, Partner, Ernst & Young AG, Ruhan (Mandy) Wang, EY-Parthenon Partner, EY Strategy & Transactions GmbH, Florian Schwalm, EY-Parthenon Partner, EY Strategy & Transactions GmbH, Falko Riechert, EY-Parthenon Partner, EY Strategy & Transactions GmbH, James Evans, EY Global Life Sciences Lead Analyst, and Rubi Gonzalez, EY-Parthenon Director, Life Sciences, EY Strategy & Transactions GmbH also contributed to this article.

Summary

Life sciences companies are facing a pivotal shift as traditional supply chains become less viable amid rising complexity and cost pressures. Adopting asset-light, ecosystem-driven models allows biopharma organizations to unlock capital, foster innovation, and gain lasting competitive advantage. Success hinges on building strategic partnerships, streamlining transactions, securing intellectual property, leveraging AI and managing risk. Companies that move proactively can redefine their value proposition and drive future growth, while those who delay, risk falling behind and adapting under less favorable conditions. Early strategic action is essential to thrive in the evolving landscape.