The small molecule drug discovery market size is projected to reach US$ 106.77 billion by 2031 from US$ 50.93 billion in 2023. The market is expected to register a CAGR of 9.7% during 2023–2031. The growing adoption of artificial intelligence in drug discovery is likely to act as a future trend in the market.

Small Molecule Drug Discovery Market Analysis

The small molecule drug discovery market is mainly driven by increasing R&D by pharmaceutical and biotechnology companies in discovering novel drugs, government initiatives, and the prevalence of cancer. Other factors contributing to the market expansion include the globalization of clinical trials, rapid advancements in associated technologies, and an increase in demand for CROs for conducting clinical trials. In addition, increasing small molecule-based pipeline acts as an opportunity for the growth of the small molecule drug discovery market.

Small Molecule Drug Discovery Market Overview

Asia Pacific is expected to register the highest CAGR during the forecast period. An upsurge in technological advancements, a surge in collaborations (for the development of genomic research) among Asian and Western countries, a decrease in prices of DNA sequencing, and a rising prevalence of genetic and other target diseases are propelling the Asia Pacific small molecule drug discovery market. The market in Asia Pacific is expected to propel owing to the rising GDP resulting in the growth of the pharmaceutical industry. Additionally, the increasing disposable income is boosting the adoption of advanced healthcare techniques. Thus, there is a huge potential for the small molecule drug discovery market owing to the aforementioned factors.

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Small Molecule Drug Discovery Market: Strategic Insights

Market Size Value in	US$ 24,976.14 Million in 2019
Market Size Value by	US$ 50,823.06 Million by 2027
Growth rate	CAGR of 9.5% from 2020-2027
Forecast Period	2020-2027
Base Year	2020

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Small Molecule Drug Discovery Market Drivers and Opportunities

Flourishing Pharmaceutical Industry with Surge in R&D Activities

The pharmaceutical industry is one of the most R&D-intensive industries in the world. Efforts are being made to achieve greater effectiveness and efficiency in fulfilling patients' needs. The cost of medicines has been a prime concern for pharmaceutical companies as they bank on their R&D activities to achieve intended cost targets. Over the last decade, the number of new small molecule drugs approved yearly has drastically increased. The Food and Drug Administration (FDA) approved 55 new drugs in 2023. The small molecules dominated new drug approvals in 2023, accounting for 62% of all new molecular entities (NME) approved. Globally, the US is a leading country in terms of R&D investments, and the country produced over 50% of the world's new molecules in the past decade. An increase in approval has led to growing investments by companies for the development of small molecule drugs due to their potential in treating several severe diseases.

R&D Investments by Major Pharmaceutical Companies

Note: The current conversion rate is considered for presenting the currencies.

Source: Annual Reports and The Insight Partners Analysis

The R&D expenditure is instrumental in companies' efforts to discover, examine, and produce new products; make upfront payments; improve existing outcomes; and demonstrate product efficacy and regulatory compliance before launch. These investments differ as per the need and demand for drug discovery. The cost includes materials, supplies used, and employee salaries, along with the cost of developing quality control. According to PhRMA Member Companies 2021 report, the top 15 largest pharmaceutical companies by revenue invested US$ 133 billion in R&D cumulatively, and ~44% of the total R&D investment was allocated to drug discovery. Thus, the increasing R&D investments by companies are fueling the small molecule drug discovery market growth.

Increasing Small Molecule-Based Pipeline to Offer Opportunity for Market Growth

The pharmaceutical industry is continually evolving and there is always a need for new, innovative therapeutic approaches in the treatment of various chronic indications. Small molecule-based drug approvals have increased over the past five years owing to their effectiveness against a wide range of indications. Small molecule drug candidate-based pipelines are growing for a wide range of therapeutic applications, including oncology, hypertension, diabetes, and inflammatory disorders. Many big and small pharmaceutical companies are engaged in the development of several small-molecule drugs.

The growing pipeline of small molecule-based drugs for various indications is, in turn, boosting drug discovery activities across the industry.

Source: Company News and The Insight Partner Analysis

Small Molecule Drug Discovery Market Report Segmentation Analysis

Key segments that contributed to the derivation of the small molecule drug discovery market analysis are therapeutic area and process/phase.

• Based on therapeutic area, the small molecule drug discovery market is segmented into oncology, central nervous system, cardiovascular, respiratory, orthopedics, immunology, rare diseases, and other therapeutic areas. The oncology segment held the largest share of the market in 2023.
• By process/phase, the market is segmented into target discovery, target validation, lead generation and refinement, and preclinical development. The lead generation and refinement segment dominated the market in 2023.

Small Molecule Drug Discovery Market Share Analysis by Geography

The geographic scope of the small molecule drug discovery market report is mainly divided into five regions: North America, Asia Pacific, Europe, South & Central America, and the Middle East & Africa. In terms of revenue, North America dominated the market in 2023. Increasing research and development by pharmaceutical and biotechnology companies in discovering novel drugs, growing investments in pharmaceuticals, and prevalence of cancer are among the factors that are projected to accelerate the growth of the North America small molecule drug discovery market. The US is the largest and fastest-growing market for small molecule drug discovery. The increasing prevalence of chronic diseases such as cardiovascular diseases and cancer primarily drives the market growth in the country. As per the American Cancer Society, in 2024, ~2 million people are projected to suffer from new cancer cases, and ~611,000 death cases are expected to be registered in the US. Owing to this scenario, the US health system witnesses massive investments in research and developments for novel drug molecules. Further, a strong drug pipeline, along with therapeutic area approvals for small molecule drugs, is expected to drive the regional market. Apart from the rising number of approved drugs, increasing awareness of advanced therapeutics is likely to be responsible for the growth of the small molecule drug discovery market during the forecast period.

Small Molecule Drug Discovery Market Report Scope

Small Molecule Drug Discovery Market News and Recent Developments

The small molecule drug discovery market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the market are listed below:

• Oncodesign Services (ODS) acquired ZoBio, a Dutch CRO expert in biophysics-based small molecule drug discovery. This acquisition allows ODS to strengthen and extend its expertise and capabilities in the field of small molecule discovery to a fully integrated offering to support its customers' innovative programs from target validation to candidate selection.  (Source: Oncodesign Services, Company Website, January 2024)
• Merck entered into new strategic drug discovery collaborations aimed at harnessing powerful artificial intelligence (AI)-driven design and discovery capabilities, further advancing the company’s research efforts. The partnership of BenevolentAI  (London, UK) and Exscientia (Oxford, UK) is expected to generate several novel clinical development drug candidates with first-in-class and best-in-class potential in key therapeutic areas of oncology, neurology, and immunology.  (Source: Merck, Company Website, September 2023)

Small Molecule Drug Discovery Market Report Coverage and Deliverables

The "Small Molecule Drug Discovery Market Size and Forecast (2021–2031)" report provides a detailed analysis of the market covering below areas:

• Small molecule drug discovery market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
• Small molecule drug discovery market trends, as well as market dynamics such as drivers, restraints, and key opportunities
• Detailed PEST and SWOT analysis
• Small molecule drug discovery market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the small molecule drug discovery market
• Detailed company profiles