At DCAT Week 2026, 24/7 Biopharma had the opportunity to sit down for a long-form interview about the state of the CDMO industry with Hamilton Lenox, Chief Commercial Officer, and Matt Grazioli, Senior Marketing Manager, of LGM Pharma. The discussion touched on LGM’s recent facility expansions, shifting market demands in the CDMO segment, and how the company is responding to the uncertain state of the global economy, among various other topics.
Facility Expansions and Contextualizing Reshoring Demands
LGM Pharma is a US-based CDMO whose drug product division is spread across three sites in Colorado, California, and Texas. Shortly before our interview, LGM Pharma announced plans to further expand its drug product sites in Rosenberg, Texas, and Colorado Springs, Colorado, by investing an additional $9 million into the sites. This represented a $15 million total investment into facility expansions, following a $6 million investment announced in March 2025.
The Colorado site works with oral solid dosages, providing R&D services, pilot plant capabilities, and a small commercial footprint for that market segment. LGM plans to launch what they’re calling “branded generics” in the next two to three years from this location, some of which include orally disintegrating tablets for products that have never been given to patients in that dosage form. The company’s overarching strategy for that facility, according to Lenox, is to build out an infrastructure that can support lower volume, higher value commercial products.
“It’s something we need to invest in long-term. For example, two of the products that we’re transferring to our Colorado Springs location are commercial, oral solid products for rare diseases, and we’re looking at products for orphan designation as well, [that have a] typically much smaller patient population,” said Lenox. “The FDA and other regulatory bodies like to keep these products on the market, because oftentimes if they go off the market, they don’t come back, simply because it’s a small patient population, and there’s a large investment to get these commercially approved.”
Conversely, the Texas site focuses on non-sterile solutions, suspensions, semi-solids, and suppositories. While suppositories are typically considered a more niche product, Lenox and Grazioli both noted they’ve seen a noticeable uptick in demand for that dosage form, specifically vaginal suppositories. While neither could attribute a precise cause, Lenox opined that it might stem from an increase in direct-to-consumer platforms and a corresponding increase in marketing aimed at health awareness, the company is nonetheless preparing itself to best serve this market.
“The pharmaceutical sector in women’s health is expected to grow 8-to-10% annually over the next five years,” said Grazioli. “Vaginal suppositories are growing at a higher rate than rectal suppositories, but the suppository dosage form overall is seeing steady and strong growth.”
Investments in these facilities are, broadly speaking, intended to increase commercial capacity, expand R&D capabilities, and support what Lenox cites as increased demand for U.S.-based manufacturing. According to Lenox, while there has been a broader push for U.S.-based manufacturing reshoring, client demand for U.S.-based manufacturing has largely centered on drug product manufacturing operations.
“There’s obviously been this push for onshoring. We’re not seeing that happen with drug substances outside of New Molecular Entities, where Lilly and others are putting billions of dollars into it,” said Lenox. “But that’s really for NME manufacturing, it’s not for your typical older API’s.”
“Where we are still seeing a push for — whether it be generics [or] 505(b)(2) manufacturing — as much as they can have onshoring for at least drug product manufacturing, we are seeing increasing demand for that,” added Lenox.
Indeed, while all of LGM’s drug product services are based in the United States, the company largely sources its drug substance from the rest of the globe. Companies in India, China, and Europe make up the bulk of their suppliers, according to Lenox.
Steering Through Murky Waters
When talking about the macro-economic state of the biopharma industry, both Lenox and Grazioli acknowledged that the biopharma industry has faced notable headwinds in the past year.
“I think that holistically, from what we are seeing, it has not been a strong year in the past 12 months,” said Lenox. “There’s been contraction, there have been challenges, and I can’t point to any single thing that we feel is driving it.”
Lenox pointed to Big Pharma as an example, which has recently had mass layoffs. This has led to knock-on effects like more outsized layoffs throughout the rest of the biotech space and contractions in investment. Additionally, what investment dollars remain tend to be reallocated towards later-stage assets, which are typically seen as safer investments, shrinking the pie for companies operating in other phases.
However, according to Grazioli, LGM has acted in ways that can hopefully mitigate the impact of these trends on the company. For example, the aforementioned site expansions were tiered into multiple phases because the company wanted to make capital investments that were large enough to shift site operations towards markets where they were observing increased demand, but small enough that they could be entirely self-funded and not cause operational difficulties for existing customers.
“We’re doing this not in a single large investment, but more strategically, both to make sure that we’re doing it with a long-term perspective, but also to make sure that we can maintain operations for our current clients and not have to pause any ongoing manufacturing,” said Grazioli.
This is the approach LGM takes to any industry downturns. For instance, Lenox pointed to the conflict in Iran, which has disrupted air travel, in turn resulting in fewer air routes and a higher cost for getting air freight shipped. LGM, however, has been largely protected from this because the company accounts for potential disruptions in its planning cycles. In this instance, its diversified sourcing strategy mitigates the damages.
“From an API supply chain standpoint, we always do practice that approach of geographic diversity, diversification, and risk mitigation,” said Lenox. “Our recommendation has always been, look at disparate geographic territories. If your primary source for your active or for your drug product is in Europe, your secondary source should be in the US, or in India, or in China — from an alternate region.”
Similarly, according to Lenox, the just-in-time supply chain model — once an industry standard before the COVID-19 pandemic — does not currently work, at least with regard to the CDMO and API supply chain. While he acknowledges that just-in-time can still be potentially used for certain molecules, it inherently invites considerable risk. Consequently, per Lenox, any company that wants to lean into this model needs to adopt key risk mitigation procedures, such as maintaining three to six months of “safety stock” in inventory.
For LGM, this proactive, cautious approach extends to most areas of their business. Staying on top of evolving FDA standards, for instance, can be as simple as looking at what other companies are receiving warning letters for. And it is a mindset that they strive to bring to the forefront of all client relations.
“As a CDMO, we are a solution provider,” said Lenox. “First and foremost, customers usually come to us with a problem, so our job is to solve that problem and anticipate problems that they have not even thought of, and those regulatory and compliance challenges and risks are things that oftentimes customers are not cognizant of now. Our job is to go ahead and address those before they ever become a complication for our customers.”
References
- LGM Pharma Expands U.S. Manufacturing, Bringing Total Investment to $15M Across Texas and Colorado Sites
- LGM Pharma Invests $6M in U.S. Drug Manufacturing Capabilities for Liquids, Suspensions, Semi-Solids, and Suppositories
- GlobalData, State of the Biopharmaceutical Industry Webinar, September 2025
