Drug discovery is a process of inventing a new medication in the field of pharmaceuticals, biotechnology and pharmacology. Drug discovery is a complex, lengthy complicated and expensive process. This process is carried out in four stages namely, target identification, target validation, high-speed screening and lead optimization. Though advanced technologies are available, success rate of drug discovery is very low and the time involved is relatively high.

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The final stage of drug discovery involves obtaining a patent and running clinical trials. Most of the drugs entering into clinical trials fail and obsolete from the trials thus leading to waste of time, cost and efforts. Generally, small pharmaceutical companies develop new drug molecules and sell patent rights to big companies that can afford to conduct clinical trials. In order to focus on core competencies such as manufacturing, marketing and product labeling many companies outsource their drug discovery processes. 

Outsourcing of drug discovery saves time, cost and efforts of the pharmaceutical and biological companies. On the other hand companies providing outsourced services for drug discovery are equipped with developed infrastructure, highly developed technological front and skilled expertise. Rapidly progressing technologies, reduced turn-around time, increasing strategic partnerships and development of biosimilars, biologics and orphan drugs are some of the driving forces for the growth of the global drug discovery outsourcing market.

Though the market scope for drug discovery outsourcing market is vast, increase in clinical research organizations (CROs), regional expansion, niche CROs and public-private partnerships is leading to increased competition that is restraining growth of this market. 

The market of drug discovery outsourcing is segmented depending on various types of services offered such as:

-Biological services
-Chemical services 
-Lead Identification and screening  
-Lead optimization

Geographically, the global drug discovery outsourcing market can be categorized into North America, Europe, Asia-Pacific and rest of the world regions.North America currently leads this market and is followed by Europe due to existence and early adoption of highly developed technologies and supportive economy. Asia-Pacific is a promising market for drug discovery outsourcing and is expected to undergo rapid market growth.

Especially countries like China and India are promising regions, reason being many small biopharmaceutical companies prefer outsourcing their drug discovery activities to CROs in China and India. Apart from nations in Asia-Pacific, countries such as Russia and Ukraine will also show growth progress in the future.

Some of the market players in this industry segment are Galapagos NV, WIL Research Laboratories LLC, Albany Molecular Research, Inc. and Domainex, Ltd.