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2016 CRO Market Size Projections 2015-2020

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The past three years have been quite eventful in the CRO world. We’ve had service provider mergers and we’ve had service provider mega-mergers. We’ve had biopharma mergers and we’ve had biopharma mega-mergers. We’ve had public offerings and we’ve had privatizations. Overall, the CRO market has been one of the best performing sectors in the financial circles.
ISR’s report gives quantitative insight into the perpetual question: “What is the size of the CRO market?” The data provide a thorough, rational perspective for clinical development services segmented by phase, geography, and service line.
ISR utilizes both publicly available information and data obtained through our syndicated primary market research efforts.

To download the full preview, please visit: http://www.isrreports.com/reports/2016-edition-of-the-cro-market-size-projections-2015-2020/

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2016 CRO Market Size Projections 2015-2020

  1. 1. 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 J A N U A R Y , 2 0 1 6 P R E V I E W O F C R O M A R K E T S I Z E 2 0 1 6
  2. 2. REPORT OVERVIEW What you will learn Report Structure The past three years have been quite eventful in the CRO world. We’ve had service provider mergers and we’ve had service provider mega-mergers. We’ve had biopharma mergers and we’ve had biopharma mega- mergers. We’ve had public offerings and we’ve had privatizations. Overall, the CRO market has been one of the best performing sectors in the financial circles. ISR’s report gives quantitative insight into the perpetual question: “What is the size of the CRO market?” The data provide a thorough, rational perspective for clinical development services segmented by phase, geography, and service line. ISR utilizes both publicly available information and data obtained through our syndicated primary market research efforts. • Estimated R&D expenditures through 2020 • Projected spending through 2020 segmented by source (sponsor type) and by: • Development • Phase I-IV Development • Outsourced Phase I-IV Development • 2016 Geographic Distribution of CRO Market Size • 2016 Service-line Assessment of CRO Market Size • 2016 Phase I-IV Assessment of CRO Market Size 1. Executive Summary 2. Overall Market Size and Growth • Top-down approach to market size • R&D sources and distribution • Model adjustments – From R&D to CRO market size • Development spending • Phase I-IV development spending • Outsourced Phase I-IV development spending • 2016 full model analysis 3. 2016 Geographic Assessment 4. 2016 Service-line Assessment 5. 2016 Development Phase I-IV Assessment 6. 2015-2020 CRO Market Model 7. 2015-2020 CRO Market Model – Growth Rates 8. 2014 Public CRO Market Share Introduction SMARTER QUESTIONS SMARTER ANSWERS WHY ISR? 1. ISR has leveraged data from our primary market research. These data, coupled with the “acts and figures” from secondary sources, allow for intelligent projections into the CRO market size. 2. The use of primary research data gives ISR the unique ability to break down the outsourced market further than ever before, by offering geographic, service line, and Phase I-IV assessments. 2016Publication Date 25Pages 24Charts and Graphs THIS PREVIEW INCLUDES SAMPLE PAGES FROM THE REPORT
  3. 3. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 FOR TABLE OF CONTENTS, PLEASE DOWNLOAD THE FULL PREVIEW AT: HTTP://WWW.ISRREPORTS.COM/REPORTS/2016-EDITION-OF-THE-CRO-MARKET-SIZE- PROJECTIONS-2015-2020/ TABLE OF CONTENTS
  4. 4. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 SMARTER QUESTONS SMARTER ANSWERS 2016 Edition of the CRO Market Size Projections: 2015-2020 5www.ISRreports.com ©2016 INTRODUCTION Welcome to the third edition of ISR’s CRO Market Size report� The past three years have been quite eventful in the CRO world� We’ve had service provider mergers and we’ve had service provider mega-mergers� We’ve had biopharma mergers and we’ve had biopharma mega- mergers� We’ve had public offerings and we’ve had privatizations� Overall, the CRO market has been one of the best performing sectors in the financial circles� In fact, over the past 12 months the Dow Jones Industrial Average is down 10%, while PRA Health is up 78%, INC Research is up 64%, ICON is up 19%, Quintiles is up 6%, and Parexel is up 2%� Yes, all the CROs have an “up” before their percentage� Why all the good news for CROs? As we have noted in the past, and in this current forecast, the market for their services is increasing� Sponsors continue to outsource more of their clinical development work across a broad range of services to service providers of all sizes� That said, for the past few reports on this topic we have been somewhat pessimistic on the long-range overall R&D spending by biopharmaceutical companies� In our 2015 CRO Market Size report, we projected that R&D spending on small molecule would decrease by a CAGR of 1% over the forecast period� Given the overall strength of the VC market continuing to invest in small biopharma companies and given large pharma’s propensity to continue to acquire assets or companies to strengthen their pipelines, we have revisited our R&D assumptions� For the 2015- 2020 forecast we have increased both the small molecule and large molecule R&D figures to account for the influx in VC-based investment going mostly to smaller sponsor organizations� According to PricewaterhouseCoopers (PWC), since 2010 the average number of VC deals in the biopharma space is ~490 per year and this has not fluctuated much over the past five years� From 2010 through 2013, the average annual investments have totaled approximately $4�4B per year� However, in 2014 and 2015 the total investments rose to $6�3B and $7�4B, respectfully� When you do the math, not only has the absolute value of the investments increased, but so too has the average value per deal (rising from an average of $9�0M from 2010-2013 to $14�4M in 2014- 2015) – all of which we think point to strength in the funding market� As a result of increasing our R&D growth assumptions, readers of past CRO Market Size reports will notice a slight-moderate increase in the CRO market� That said, we will reiterate what we mentioned in the previous report: The major lever in CRO revenue is still the outsourcing propensity/penetration� One market dynamic we have not accounted for is the impact of biopharma mega-mergers� We have not modeled this because we don’t think there is a lasting macro impact of these mergers� However, we do think those mergers can and will have a significant impact on the CROs that are involved with those sponsor companies� Another impact readers will note is in the CRO market share section� With an increased CRO market, some of the public CROs will notice a slight drop in their market share� Given that most of the changes in our R&D model impacted the small sponsor segment, we think this aligns nicely with the public CROs’ traditional customer set (of large sponsors)� In our view, the pace of change in the CRO market will not slow down anytime soon� Look for more mergers as providers continue to scale up global capabilities and fill in their service offerings; look for more sophisticated marketing and branding efforts as the battle for market share increases; and perhaps look for “non- traditional” CRO service providers to enter the market via partnerships or outright acquisitions� We would also not be surprised to see interest gaining momentum for a CRO-CMO merger� S A M P L E P A G E : INTRODUCTION
  5. 5. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 SMARTER QUESTONS SMARTER ANSWERS 2016 Edition of the CRO Market Size Projections: 2015-2020 10www.ISRreports.com ©2016 Model adjustments – From R&D to CRO market size As previously stated, ISR utilizes a top-down approach to our market sizing calculations, starting with R&D spending� We then use a series of “deflators” in order to narrow the market applicable to pharmaceutical service providers� The steps taken for these calculations are outlined below� R&D expenditures are first analyzed to remove the “R” (research) and we are left with “D” (development) spending per segment� Development spending is then analyzed by the amount of spending done for Phase I-IV clinical studies� Phase I-IV clinical development spending is then segmented by the outsourcing penetration of each company size/ organization type to arrive at the market size for CROs� 2016 Phase I-IV Development: $78.8B 2016 R&D: $271.3B 2016 Development: $110.6B 2016 Outsourcing Phase I-IV Development Market: $29.8B © Industry Standard Research S A M P L E P A G E : MODEL ADJUSTMENT This page highlights ISR’s top-down approach to our market sizing calculations. The full analysis and figures for the 2016 Outsourcing Phase I-IV Development Market are available in the full report at www.ISRreports.com.
  6. 6. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 SMARTER QUESTONS SMARTER ANSWERS 2016 Edition of the CRO Market Size Projections: 2015-2020 19www.ISRreports.com ©2016 2016 SERVICE-LINE ASSESSMENT Based on ISR’s proprietary survey data, we provide an assessment of the CRO market based on the services CROs typically offer� We certainly understand that the distribution of service costs varies by study type, phase, compound, etc� However, on aggregate, we believe our data provide one of the most accurate representations of the CRO market size based on services in the industry� We use the same data and assumptions with respect to our model working down from R&D to development to Phase I-IV development activities to outsourcing propensity when working on our service-line splits� Table 10: 2016 service-line distribution (%) of the CRO market size 2016 Clinical Monitoring 21�7% Investigator Payments 13�1% Data Management 11�3% Laboratory 10�5% Project Management 9�0% Patient and site recruitment 8�5% Technology 6�9% Biostatistics 6�4% Medical Writing 3�4% Regulatory 2�8% Imaging 2�7% Quality Assurance 2�4% Other 1�3% Total 100% S A M P L E P A G E : 2016 SERVICE-LINE ASSESSMENT ISR provides an assessment of the CRO market based on the services CROs typically offer, based on ISR’s proprietary survey data. The following chart has been blinded. The full data are available in the report, which can be downloaded from www.ISRreports.com. 2016 Clinical Monitoring XX% Investigator Payments XX% Data Management XX% Laboratory XX% Project Management XX% Patient and site recruitment XX% Technology XX% Biostatistics XX% Medical Writing XX% Regulatory XX% Imaging XX% Quality Assurance XX% Other XX% Total 100%
  7. 7. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 FOR SAMPLE PAGES, PLEASE DOWNLOAD THE FULL PREVIEW AT: HTTP://WWW.ISRREPORTS.COM/REPORTS/2016-EDITION-OF- THE-CRO-MARKET-SIZE-PROJECTIONS-2015-2020/
  8. 8. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 ORDERING INFORMATION Industry Standard Research (ISR) is the premier, full service market research provider to the pharma and pharma services industries.  With over a decade of experience in the industry, ISR delivers an unmatched level of domain expertise.    For more information about our off-the-shelf intelligence and custom research offerings, please visit our Web site at www.ISRreports.com, email info@ISRreports.com, or follow us on twitter @ISRreports. ABOUT INDUSTRY STANDARD RESEARCH >> R E G I S T E R N O W >>Receive $250 instant credit towards any ISR report >>Earn 10% credit towards all future purchases >>Receive advanced notifications on ISR’s latest reports and free resources SAVE ON THIS, OR ANY ISR REPORT, BY CREATING A FREE ACCOUNT FOR PRICING AND ORDERING INFORMATION: HTTP://WWW.ISRREPORTS.COM/REPORTS/2016-EDITION- OF-THE-CRO-MARKET-SIZE-PROJECTIONS-2015-2020/
  9. 9. TO LEARN MORE: CONTACT US AT INFO@ISRREPORTS.COM OR +1(919)301-0106 Biosimilars & Biologics Clinical Trial Recruitment & Retention Commercialization Department Models & Structures Trends & Technologies Manufacturing Service Provider Quality Benchmarking CUSTOM RESEARCH UNDERSTAND YOUR MARKETS Leverage ISR’s experience and institutional knowledge to create a fit-for-purpose market research project that addresses the business decisions you need to make. Are you: • Developing a new product or service? • Evaluating a new market? • Targeting a new customer segment? • Entering a new geography? • Needing a deeper understanding of your customer or potential customer base? UNDERSTAND YOUR CUSTOMERS Who makes the decisions and in what contexts? ISR can help you gain a deeper understanding of your customers’ decision-making units (DMUs) and decision-making processes (DMPs). Key Questions Addressed: • What motivates the purchase decision? • How are companies, products, solutions, and/or brands evaluated? • What factors drive the final buying decision? • Where are your customers won or lost in the purchasing process? • Why were specific opportunities won or lost? • How do you keep customers engaged and manage their loyalty over time? CUSTOM RESEARCH SERVICES • Investigator Forum • Brand, Advertising, and Message Testing • Loyalty Management • New Product and Service Development • Competitive Intelligence • Strategy War Games • MORE S O M E T H I N G T O C O N S I D E R DISTINCTIVE – Receive novel insights from industry decision-makers on topics including: service provider quality, patient recruitment, biosimilars, clinical technology, manufacturing, clinical operations, and commercial activities. UNRESTRICTED – ISR doesn’t sell seats. Instantly obtain access for all employees within your organization AFFORDABLE – Receive access to ALL reports in ISR’s library, as well as those released during your subscription period. ISR’s competitive library pricing equates to the cost of a few individual report purchases. LIBRARY ACCESS SUBSCRIPTION ISR’s library access subscription provides your entire organization access to our full library of syndicated market research reports (100+ titles) plus access to all reports (~25 per year) released during your subscription period. Our research categories include:
  10. 10. Introduction 2016 CRO MARKET SIZE PROJECTIONS 2015-2020 www.ISRreports.com ©2013 | Preview of: Benchmarking the Pharma Industry’s HEOR Functions 10 act with confidence www.ISRreports.com ©2015 | Preview of: Epithelial Ovarian Cancer: Disease and Pipeline Analysis 10 act with confidence www.ISRreports.com ©2013 | Preview of: Benchmarking the Pharma Industry’s HEOR Functions 10 act with confidence www.ISRreports.com ©2014 | Preview of: Benchmarking European Investigator Payments 10 act with confidence www.ISRreports.com ©2013 | Preview of: Benchmarking the Pharma Industry’s HEOR Functions 10 act with confidence The ISR Difference Custom-quality syndicated market research www.ISRreports.com ISR's Reports The Common Syndicated Reportvs. How confident are you? vs. DataCollection ISR's proprietary data collection tools and channels support fast, high quality data collection Struggle to recruit the right targets and enough of them vs. SampleSizes Robust sample sizes that instill confidence Often insufficient industry representation that leaves you defending results vs.vs. Research methods Mostly primary research; always appropriate for the topic One size fits all; usually publically available data vs.vs. Respondents Sophisticated screening ensures genuine decision-makers Undisclosed methodologies and respondent demographics vs.vs. Analysts Decades of experience means more insights that are immediately usable Junior analysts capable of reporting numbers

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