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CROs and Clinical Trials: Strategic Partnerships Driving Future Growth

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An analyst briefing presentation delivered by Frost & Sullivan Pharmaceuticals & Biotechnology Senior Industry Analyst Barath Shankar Subramanian.

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CROs and Clinical Trials: Strategic Partnerships Driving Future Growth

  1. 1. CROs & Clinical Trials: Strategic Partnerships Driving Future Growth? December 14 th , 2010
  2. 2. Agenda <ul><li>CRO Market Overview </li></ul><ul><li>2009-2010 Performance Review </li></ul><ul><li>Tactical vs. Strategic Outsourcing </li></ul><ul><li>Review of Major Strategic Deals </li></ul>
  3. 3. What do CROs offer?
  4. 4. Factors Affecting Market Growth CONTRACT RESEARCH ORGANIZATIONS MARKET (2010-2017) Shift Toward Strategic Outsourcing Pressure to Lower Fixed Costs Improving R&D Efficiency and Quality Demand for Global Trials Stringent Regulatory Environment Rising R&D Cost Pressure to Improve Clinical Pipeline Integration of Pharma and Biotech Commoditization of Services
  5. 5. CRO Market Structure
  6. 6. Review of 2009-2010 CRO Performance Top 6 Publicly Traded CROs: Covance, Charles River, ICON, Kendle, Parexel and PPD
  7. 7. Tactical vs Strategic Outsourcing <ul><li>Project-by-project focus </li></ul><ul><li>Integrated program outsourcing throughout lifecycle </li></ul><ul><li>Competitive bidding </li></ul><ul><li>Funnel a large percentage of work to a few strategic partners </li></ul><ul><li>Inconsistent monitoring </li></ul><ul><li>CRO performance monitored and tracked by internal benchmarks </li></ul><ul><li>Superior-subordinate relationship </li></ul><ul><li>Well-defined governance structure </li></ul>
  8. 8. Types of Outsourcing Relationships
  9. 9. Review of Major Strategic Deals
  10. 10. Covance – Eli Lilly (2008)
  11. 11. PPD – Merck (2009)
  12. 12. Covance – Sanofi Aventis (2010)
  13. 13. Review of Deals Win-Win
  14. 14. Key Strategic Objectives
  15. 15. Contract Services Employing Hybrid Business Models CRAMs CROs Drug Manufacturers Contract Research and Manufacturing Organizations Emerging Hybrid Business Model <ul><li>Global scale ─ ability to run clinical trials across global regions </li></ul><ul><li>eClinical capabilities for clinical trial management </li></ul><ul><li>Access to patient pools </li></ul><ul><li>Scalability of drug manufacturing from clinical trials to commercialization </li></ul><ul><li>Reduces fixed costs for pharmaceutical industry </li></ul><ul><li>Access to proprietary drug delivery platforms </li></ul>Source: Frost & Sullivan
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