The most direct signal from the CRO (Contract Research Organization) industry in 2025 is that leading companies are no longer universally expanding their workforce. The total employee count across ten major CRO firms increased from 97,918 to 98,299, a mere 0.39% growth. While the overall headcount appears stable on the surface, significant internal divergence is evident. Four companies—WuXi AppTec, Jiuzhou Pharmaceutical, JOINN, and Bide Pharmaceutical—collectively reduced their staff by 5,797 employees. In contrast, Pharmaron, TIGERMED, and ASYMCHEM continued to hire. This indicates a shift in the growth logic of the CRO sector, with companies now adopting a more cautious approach to human resource allocation, directing new hires only towards more certain business areas.
The era of rapid workforce expansion as a primary growth driver for CROs appears to have peaked in 2025. Among the ten leading domestic CRO firms, the total headcount saw a minimal increase of just 381 employees, or 0.39%, from the previous year. This marginal growth rate suggests that the phase where top CROs fueled growth primarily through hiring has largely concluded. Post-2025, the industry competition is shifting from who can scale operations the fastest to who can deploy personnel onto higher-value projects.
WuXi AppTec saw the most significant change. The reduction in its workforce primarily affected bachelor's and associate degree-level positions in execution roles. These positions historically supported the CRO's high growth, involving repetitive experiments, data recording, and other foundational tasks. During the industry's upswing, they contributed to capacity; as the sector enters a plateau, they are the first to reflect efficiency pressures. For a leader like WuXi AppTec, the rationale for further expanding headcount has diminished. Streamlining and consolidating the organization now aligns better with the current phase.
Conversely, Pharmaron continued its expansion. In 2025, its employee count reached 25,088, an increase of 3,718 from the previous year, representing a significant 17.40% growth. This expansion stands out against the backdrop of minimal overall headcount growth among leading CROs. Pharmaron's hiring spree corresponds to its business strategy, involving continued investment in clinical CRO services and large-molecule CDMO (Contract Development and Manufacturing Organization) segments. Its full-service model also requires more personnel to manage projects across different stages. The company's path diverges from WuXi AppTec's: while WuXi focuses on organizational efficiency, Pharmaron remains in a phase of business strengthening and capability expansion. The contrasting approaches of one company reducing and another increasing staff illustrate that workforce expansion in the CRO sector is now channeled only towards more defined business directions.
TIGERMED and ASYMCHEM also maintained relatively fast growth. In 2025, TIGERMED's employee count grew by 9.28%, and ASYMCHEM's by 10.65%. The former's growth was driven more by a recovery in clinical demand, while the latter's was linked to investments in new businesses like peptides and oligonucleotides. Areas such as clinical services, large molecules, peptides, oligonucleotides, and new technology platforms remain where companies are willing to continue hiring. However, this expansion is no longer the synchronized industry-wide growth of the past but is instead focused on specific business verticals.
The remaining companies have largely entered a phase of stable adjustment. Pharmablock Sciences saw an 8.04% increase, Medicilon grew by 6.60%, and Porton Pharma Solutions increased by 3.44%. Jiuzhou Pharmaceutical's workforce decreased by 4.20%. JOINN and Bide Pharmaceutical saw changes of less than 0.2%, essentially remaining flat. This reflects the real situation for most CRO companies: neither drastically contracting nor recklessly expanding. Order flow remains uncertain, and client budgets have not fully recovered to peak levels. The recovery in innovative drug financing takes time, and early-stage project screening is more cautious than before. In this environment, companies prefer to control their pace, continuing to invest in areas with confirmed demand while pausing hiring for roles with unclear returns.
From a sector performance perspective, listed CXO (including CRO and CDMO) companies reported combined revenue of 103.592 billion yuan in 2025, a year-on-year increase of 9.30%. Net profit attributable to shareholders reached 25.299 billion yuan, surging 78.38%. In Q1 2026, sector revenue was 27.075 billion yuan, up 16.04% year-on-year, with net profit attributable to shareholders at 6.205 billion yuan, growing 21.73%. The recovery in the CDMO segment was more concentrated. In Q1 2026, its overall revenue increased by 15.18% year-on-year, net profit attributable to shareholders grew 18.29%, adjusted net profit attributable to shareholders surged 54.17%, and gross margin returned to 43.28%. These figures indicate that CRO companies have not yet entered a comprehensive upcycle and remain in a recovery phase.
In Q1 2026, WuXi AppTec reported revenue of 12.44 billion yuan, up 28.8% year-on-year, with net profit attributable to shareholders at 4.652 billion yuan, increasing 26.68%. More crucially, the company's backlog for ongoing business reached 59.77 billion yuan, a 23.6% increase. Its small-molecule D&M (Discovery & Manufacturing) business provided the most significant support. During the quarter, WuXi's chemistry business revenue was 10.62 billion yuan, up 43.7% year-on-year; small-molecule D&M revenue reached 6.93 billion yuan, surging 80.1%; the number of clients served increased by 28%, and the number of molecules serviced grew by 59%. This demonstrates that even without large-scale workforce expansion, WuXi AppTec can still generate profits through platform conversion, order depth, and high-value business segments.
Meanwhile, Pharmaron reported Q1 2026 revenue of 3.578 billion yuan, a 15.48% increase year-on-year, with net profit attributable to shareholders at 335 million yuan, up 9.75%. While both revenue and profit grew, its gross margin was 32.50%, down 1.16 percentage points from the same period last year. Net cash flow from operating activities was 604 million yuan, a decline of 29.13%. The efficiency of Pharmaron's full-chain business model still needs further realization.
Smaller and mid-sized companies exhibit greater volatility, with performance diverging more noticeably. Some traditional CDMO and API-related firms are still affected by major client project cycles, order shifts, and pricing pressures, indicating that the recovery is not uniform. In Q1 2026, Jiuzhou Pharmaceutical remained under pressure, with revenue of 1.201 billion yuan (down 19.43% year-on-year) and net profit attributable to shareholders of 172 million yuan (down 31.22%). Net cash flow from operating activities was 136 million yuan, a sharp decrease of 52.41%. In contrast, Porton Pharma Solutions returned to profitability. Its Q1 revenue was 886 million yuan, up 10.59% year-on-year, with net profit attributable to shareholders turning positive at 27.8651 million yuan. Adjusted net profit also turned positive at 24.7112 million yuan. However, net cash flow from operating activities was only 2.4069 million yuan, plummeting 97.19%, suggesting that while the income statement has improved, cash flow sustainability requires further validation.
Companies like Pharmablock Sciences, Bide Pharmaceutical, and Medicilon, while smaller in scale, are beginning to show profit elasticity. In Q1 2026, Pharmablock Sciences reported revenue of 508 million yuan and net profit attributable to shareholders of 48.8866 million yuan. Bide Pharmaceutical's revenue was 323 million yuan, with net profit attributable to shareholders reaching 46.8291 million yuan, a significant 52.57% increase. Medicilon's revenue grew 36.52% to 365 million yuan, and it achieved a turnaround with net profit attributable to shareholders of 15.6154 million yuan.
Therefore, based on Q1 2026 reports, the CRO industry has moved past its most difficult period but cannot yet be described as in full recovery. The pace and quality of recovery have already created disparities among different companies.
Following the performance recovery, CRO companies now face a more critical question: where will new growth come from? During the industry's prosperous period, abundant orders made the growth path relatively straightforward. However, Q1 2026 reports indicate that the traditional logic of growth through hiring is weakening, and simply looking at order volume is less meaningful. More accurately, the current round of CRO growth is shifting from "taking on more early-stage projects" to "undertaking higher-value projects closer to market approval and commercial production."
WuXi AppTec's small-molecule D&M business provides a clear example. In Q1 2026, this segment's revenue was 6.93 billion yuan, surging 80.1% year-on-year. Its small-molecule D&M pipeline added 328 new molecules, including 9 new Phase III clinical and commercial projects, indicating a shift of projects from the R&D end towards development and production. For CXO companies, backend projects determine revenue quality. A molecule stalled in early research has limited order value, and suppliers are easily replaceable. Once it enters later stages, quality systems and supply chains become more deeply embedded, raising the client's switching costs.
Pharmaron is also advancing in this direction. In Q1 2026, its small-molecule CDMO business revenue was 866 million yuan, up 25.01% year-on-year, with new orders in its CMC (Chemistry, Manufacturing, and Controls) segment growing over 50%. From a project stage perspective, the company's process validation and commercial-stage projects increased from 5 in 2021 to 34 in 2025. For a full-service company, laboratory services, CMC, and clinical services can all attract clients. However, what truly impacts profit elasticity is whether these clients remain within the system and advance their projects to validation batches and commercial production. The key metric for Pharmaron is not how many business areas it can cover, but whether these entry points can consistently translate into commercial production orders.
Pharmablock Sciences follows a similar pattern. In 2025, its new molecular entity business revenue reached 84 million yuan, growing over 50% year-on-year. It is advancing businesses related to oligonucleotides, peptides, and conjugate drugs. In oligonucleotides, it completed kilogram-scale GalNAc project process development and delivery; in peptides, it has achieved kilogram and hundred-kilogram scale supply for multiple products; in conjugate drugs, it has delivered over 200 Linkers, toxins, and Linker-Payload complexes.
Bide Pharmaceutical's performance reflects more of a recovery in R&D demand. In 2025, its molecular building blocks revenue was 1.088 billion yuan, up 16.21% year-on-year, while scientific reagent revenue reached 236 million yuan, increasing 42.21%. Its inventory of readily available products exceeds 100,000 types. Although not a typical CDMO company, the expansion of its molecular building blocks and reagent portfolio reflects changes in front-end R&D activity.
Clinical and preclinical services are also recovering. TIGERMED reported Q1 2026 revenue of 1.801 billion yuan, a 15.17% increase year-on-year, with adjusted net profit attributable to shareholders at 120 million yuan, up 17.65%. The company maintained high double-digit growth in new orders for the quarter, with clinical trial technical service revenue growing 20.8% and overseas clinical business showing good growth. This indicates that while the innovative drug industry has not returned to its peak financing period, projects that are truly advancing continue to move into clinical stages.
JOINN and Medicilon represent the recovery in preclinical demand. JOINN secured new orders worth approximately 910 million yuan in Q1, a substantial 111.6% increase year-on-year. Its order backlog at the end of Q1 stood at 3.1 billion yuan, up 40.9% year-on-year. Medicilon's Q1 revenue grew 36.52% to 365 million yuan, achieving profitability. This growth was primarily driven by integrated preclinical services, overseas business, and improved delivery efficiency.
In summary, while demand has returned to the CRO industry, it will not flow evenly to all companies. Firms capable of handling backend production, complex new molecule processes, and those following innovative drugs into global clinical development and overseas markets will be the first to capture the new growth.
The phase where CRO industry growth was primarily driven by workforce expansion is largely over. The next wave of CRO growth will be allocated only to companies that can secure backend orders, manage complex new molecules, and meet global clinical demand. Demand has returned, but industry selection has begun.
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