Strategic alliances between CROs offer access to shared efficiencies in new geographic areas.

1. 1
The Evolving Dynamics of Collaboration
In Global Clinical Research
As sponsors of clinical trials
become more discerning
about the strengths of
individual contract research
organizations (CROs),
strategic alliances between
CROs offer access to
shared efficiencies in new
geographic areas
C a t o R e s e a r c h ’ s H e s c h i
Rotmensch, M.D., regards the
decision to partner with another
CRO on the same trial as fairly
natural and logical. "For the last 15
years, we have realized that we are
a mid-sized company relative to the
big multinational CROs," he says.
"If we want to play in the ground
of mid- and large-sized companies,
then we need to have collaborative
services." Rotmensch is Cato’s
senior vice president of drug
development; chief project officer;
and he manages all research
activities outside the U.S.
The company, he says, uses
caution as well as a gradual and
careful approach to be sure his firm
and a prospective partner CRO
can work smoothly together. The
company selects partners in
countries or geographic areas
w h e r e i t h a s n o e x i s t i n g
infrastructure. "We collaborate
based on mutual chemistry, vendor
audits and lengthy discussions to
s e e i f c o n c e p t u a l l y a n d
philosophically there is a fit,”
Rotmensch says. “We have started
always with small steps, giving a
small piece of work, and then
expand on that. That has worked
pretty well for us."
Cato tends to retain standard
clinical trial activities such as
project management. Other
assignments (regulatory affairs,
perhaps) are shared with other
firms that have the necessary
A White Paper
RETHINKING CRO ALLIANCES
ONTARGET•Spring2016

2. 2
specialized knowledge or expertise in a particular corner
of the globe.
Rotmensch says that sharing research-related
projects may require a certain well-established
confidence at both CROs, which must believe that a
valued client can be shared but not lost to a competitor.
"If you look at it narrowly, concerned and afraid about
exposing yourself—that someone will steal your client or
your processes—that is not a good start for a
collaboration," he says. Most sponsors are now
sufficiently sophisticated to understand that CROs have
areas of particular strength and unusual competence,
and slightly weaker areas that may be augmented by
other organizations.
Cato partners with Target Health and with other
CROs. For its projects around the globe, Cato has
ongoing collaborations with eight additional CROs on a
nonexclusive basis. “The experience with Target Health
has been quite smooth,” Rotmensch says. He and his
colleagues have appreciated the unusually speedy
responses from the Target Health electronic data
capture system programming wizards when the
inevitable minor glitches arise during any project.
Rotmensch believes both organizations have had
mutual benefits from the projects they have collaborated
upon. "We are working closely together for many
years,” he says. “We have not had any major disruptions
between the two organizations. Target Health has come
up with innovative concepts. We have added our
experience to whatever they had. We have contributed
improvements to their software."
Michael Harte of the Harte
Group oversees a network of
140 different clinical trial
service and technology
providers. Cumulatively, the
companies in his network
have 16,000 employees.
Harte doesn't work directly
with Target Health, but
suspects its technology may help to provide a standard
foundation, unifying people and processes on far-flung
research projects around the globe. Harte's firm is
generally hired by sponsors to partner with a few well-
vetted, seasoned small firms to toil on a trial together.
Harte functions like a general contractor, providing
vendor oversight and central project management. That
allows him to help select the right clinical development
partners and avoid some of the contorted processes that
can plague any big project or any large organization.
Often, Harte reports, his firm is retained to rescue
trials—only to discover that some sponsors have not
identified the most efficient ways to manage external
providers against
missed timelines
or ballooning
budgets. From a
b u s i n e s s
p e r s p e c t i v e ,
Harte and his
h a n d - p i c k e d
niche providers
generally try to
impart a greater
sense of urgency
than what they
first encounter. Based on his own projects, Harte
believes there are potentially large financial and time
savings from CROs working together.
Many large, publicly traded CROs are struggling to
reconcile the concerns of stakeholders in the sponsor
community with those of their own investors. As an
example, the use of esource and risk-based monitoring
might trim trial budgets and timelines. Sponsors would
approve. But CROs adopting such techniques could
face revenue shortfalls that would alarm their own
investors. More usage of technology at large CROs,
likewise, should provide sponsors with actionable
insights into study progress. But those same tools could
also require major realignments of both human
resources and revenue streams inside CROs.
Small, private CROs have none of these
constraints. In projects managed by Harte's network,
there is an eagerness to take advantage of all of the
time- and cost-savings that close teamwork and well-
chosen clinical trial software can provide. "What it boils
down to is having like-minded individuals and niche
providers," Harte says. "We propose our own teams and
systems. And we take ownership of them."
If the trial is on track, all participating firms share
in performance incentives. And if not? Harte is blunt
about the need to manage clinical trials in a hawklike
manner, like any other modern, complex business
process. "We own the contract," Harte says. "We
manage the accountability. If they don't perform, then
we provide a replacement." Like his own hand-picked
teams on trials, Harte says, Target Health and similar
The experience
with Target has
been quite
smooth
—Heschi
Rotmensch,
Cato Research
CROALLIANCESONTARGET•Spring2016

3. 3
strategic CRO-CRO alliances may be able to sing from
the same hymn book to a degree that other larger firms
cannot yet match.
One CRO that is judiciously partnering with other
firms is George Clinical. Headquartered in Australia, it
is one of the top CROs in the region, with a focus on
the Asia Pacific region, including India and China.
Some of the CRO's personnel overlap with the
adjacent nonprofit George Institute.
Maria Ali, M.B.B.S., M.B.A., head of medical
safety and scientific liaison at George Clinical, believes
that in some CRO alliances, subtle corporate cultural
nuances may not receive sufficient attention early in the
assessment of any proposed alliance. Those issues
should loom as large as matching standard operating
processes (SOP) and more technical matters. "Just
working together does not mean that you are
collaborating," notes Ali. "Collaborating is working
together with respect for the key strengths that each
organization is bringing and allowing them to
maximally input those strengths into the project."
It doesn’t hurt to surprise the other partner in a
favorable way. On one endeavor, a Phase III project, Ali
was surprised that the aggressive timelines for the
project presented no difficulties for Target Health. "The
project had a very quick startup phase," she says. "The
timelines were quite challenging." In other industry
projects, she acknowledges ruefully, it is possible for the
implementation of competing clinical trial technologies
to delay the start of the
study.
Ali is particularly
intrigued by the paperless,
e-source technologies of
Target Health. Says Ali:
"That is the kind of thing
that makes them stand out.
Everyone is talking about
buzzwords. Target Health has actually done something,
submitted NDAs based on e-source." Of particular
interest to her company: the Target Health program to
handle trial master files electronically.
The two CROs have embarked on a limited
number of projects to date, but with high expectations
for more jointly shared trials. Ali says the relationship is
expected to be mutually auspicious for both companies.
"They could use our expertise in Asia-Pac," she says.
"We could use their software. It is a natural synergy."
A l i s a y s t h a t
George Clinical does
not always have the
ability to choose its
CRO partner. "We are
often told by the
sponsor who their
preferred provider is in
the U.S. and European
region," she says.
At TechnoSTAT, a contract research organization in
Israel, Yael Shtrit is department manager of clinical
data management. She says TechnoSTAT and Target
Health are working on "quite a few" trials. "We use the
Target Health platform and they assist us with any
additional programs,” says Shtrit.
TechnoSTAT has no in-house electronic data
capture system. She says the EDC solution from Target
Health works beautifully. And the people at Target also
prove easy to collaborate with. "It is very easy to work
with them," Shtrit says. "We have not had any
problems. We are not working with paper CRFs
anymore," she notes. "We are changing our way of
working, as we have Target Health.” Just as Southwest
Airlines uses a single type of jetliner for more efficient
training and repairs, TechnoSTAT uses the Target
Health technology exclusively. Says Shtrit: “It saves
something if you put all your eggs in the same basket."
One of the dynamics of projects in the Middle
East, Shtrit observes, is that even well-funded
biotechnology sponsors in the region are price-
conscious. Microsoft Excel remains a common tool for
clinical data collection. Needless to say, some large, well-
known EDC suppliers are simply not under
consideration because of the 6- or 7-digit cost of those
systems. Says Shtrit: "Prices are a big issue for them."
The pricing of Target Health's system, in contrast,
allows TechnoSTAT to share the project without
jeopardizing its financial return.
When bidding on new projects, TechnoSTAT CEO
Tal Zucker says, neither of the CROs feels at risk or
threatened by the other: "Target on their end are doing
their best to let us win each of the projects we are trying
to achieve. We get a good chance to win most of the
cases. We really appreciate the collaboration."
Prices are a
big issue
—Maria Ali,
George Clinical
CROALLIANCESONTARGET•Spring2016

4. 4
TechnoSTAT did explore working with a few other
firms, she says, but has been fairly impressed by the
Target-enabled transition away from paper case report
forms. “We are now almost stopping to do paper
CRFs,” Zucker says.
Working with other CROs is nothing new for Young
Jack Lee of LSK Global, the company's founder and
president. The Korean company has completed 700
projects since its start in
2000. Its forte is local
knowledge, says Lee. "If
Korean authorities ask
something relatively
simple about the design,
global CROs or local
affiliates have to go back
to their headquarters,”
he says. “They don't
have the expertise in
statistics. Headquarters
has to think about it and
get back to the affiliate.
That takes time. We can
answer much better and faster."
Early in his career, while working for a large global
CRO, Lee got a question about a trial from the Korean
government. He could have answered it in minutes. But
that approach would have violated his then-employer’s
policy. Under its approved process, the answer slowly
passed through multiple levels of the CRO in Korea, the
United Kingdom, the U.S.—and back down the chain
of command to Korea. The process took three months,
Lee notes ruefully.
Lee says some big multinational CROs trying to
operate all over the world can become a bit rigid,
insisting on finely-honed processes without ever
compromising. That can make it hard for his project
teams in particular locales to operate in the most
efficient manner available. Target Health, he says, is
more flexible: "Target Health is very willing to
accommodate us or accommodate the study, whatever
particularities we may have."
In Korea, Lee reports, Target Health doesn't have a
large number of strong competitors. "Target Health is
sort of the standard of practice for EDC in Korea," Lee
says, partly because there is no doubt it is battle-tested to
meet global and U.S. regulatory standards, a claim small
locally-developed Korean EDC systems usually cannot
match. Lee notes that some sponsors do occasionally ask
him to support other major EDC solutions.
When a sponsor asks LSK Global to use a different
EDC system, Lee says, he pushes back. He is especially
uninterested in risking a project on a small, in-house
clinical system that has been developed in Korea. For
Lee, the operational and regulatory risks to sponsors
(and his company’s reputation) are too great. "We say
no," he says. "Quality is more important. We simply
refuse to work with the locally developed system.”
In Korea, Lee notes, the
paper case report form is
heading to the same extinction
territory as the do-do bird.
" T h e p a p e r C R F i s
disappearing," he says flatly.
"But there are sponsors that
like to use paper. We can use
Target Health for paper data
entry." The Target system has
supported trials using the
Chinese, Japanese and Spanish
languages in addition to
English.
At this point, inside Korea,
Lee feels that his firm is uniquely positioned to match
the capabilities of a big multinational firm. "We can do
everything global CROs can do," he says.
His assessment of Target Health is that the
functionality of its EDC system is equivalent to any firm
in the niche. Even with a large observational study that
collects only a small quantity of data about each patient,
he says, the systems from Target are perfectly attuned.
Says Lee: "Target Health is very flexible. We could even
build a pharmacovigilance program based on Target
Health. On other EDC systems, you cannot do that.
Target Health is not a one size fits all kind of service.
They are flexible and they try to accommodate."
The president of New York-based Target Health, Jules
Mitchel, Ph.D, M.B.A., actively seeks out alliances with
other CROs. He believes the contracts can be mutually
beneficial. His company is a traditional CRO with a
major clinical software development emphasis. After
supporting over 400 clinical trials over the years, Target
Health is genuinely global, recently launching an
electronic informed consent module in English,
Japanese and Spanish. Mitchel says that in an optimal
alliance, each potential partner should understand its
CROALLIANCESONTARGET•Spring2016

5. 5
strong suit. Ideal candidates for partnering, needless to
say, have different domains of special expertise.
A few elements of some trials are more standard.
And either firm in the partnership can capably handle
those tasks. But Mitchel doesn't lose a great deal of
sleep over jockeying for a particular contract if the
relationship, over time, seems to work for both CROs.
" O n e o f t h e
companies that
we work with got
some business
that we could
have done," he
notes. "We got
some business from them that maybe they could have
done. What you can't do is court the client that you
got introduced to in order to get more business for
yourself."
Why are so many disparate CROs in the U.S.,
Korea, Israel and other countries eager to partner
with Target Health? The firm's technology is a draw.
"We do have features the other electronic data capture
companies do not have," says Mitchel. "We have an e-
source solution. You can enter data in real time. That
is available to all of our collaborators." The
technology has been used in more than 20 trials.
Also, Target Health prices for data management
and electronic data capture (EDC) are hyper-
competitive in an era in which some suppliers of EDC
are taking advantage of higher pricing due to a
smaller pool of providers. Target’s fee structure is
often a simple annual license, with a cost per study
and hosting fees—not a bewildering compendium of
hundreds of charges for each discrete change order or
system modification.
In some cases, Mitchel says, a CRO alliance
requires a discussion about which company’s process
to use in a particular aspect of the trial. “The biggest
issue for CROs is optimizing their processes,” he says.
“But there are no conflicts." CROs of all sizes, he
believes, are starting to explore less paper-intensive
processes—and how such processes could fit within
strategic alliances and evolving business models. “The
size of the company is not the key issue,” he says.
“What matters is having
a n o p e n - m i n d e d
a p p r o a c h t o h o w
technology can help in
clinical development.”
CROs outside the
U.S. are being strongly
pressured on price, and don't possess in-house EDC
solutions. In such cases, it makes sense to partner with
a company like Target Health.
It's not a secret to the industry that trials are
complex. And in some cases, Mitchel believes, the
sponsor community still does not judge the top EDC
solutions to have all of the optimal and necessary
functionality to support what sponsors desire.
"Clinical trials are not simple," Mitchel observes.
"All of a sudden, in the middle of a study ... can you
do this? Can you do an interim database lock? You
need both the database and the electronic data
capture—and knowledge of pharmaceutical data
management. That is what is wrong with some of the
systems. They are too simplistic.” In the complex
world of modern trials, he says, it can be helpful to
have an experienced partner.
Mitchel has a philosophical outlook on the
division of tasks between allied CROs. With the best
alliances, everything seems to even out in the end. "I
don't have to win the whole program," Mitchel says.
"We are willing to share. To us, relationships are very,
very important."
CROALLIANCESONTARGET•Spring2016
The paper CRF is disappearing
Young Jack Lee, LSK Global