CRO Trends & Drivers
Specialty Pharma Biotech Driving Current CRO Growth & Trends 
Specialty Pharma – April 1, 2009

There is a strong demand for early stage services from the supply side (R&D spending) that could translate to higher business for Contract Research Organizations (CROs) if their services are positioned to meet the demand and requirements of sponsors. According to Frost and Sullivan, greater growth potential exists for CROs in early stage work with increased potential for outsourcing, especially in areas such as toxicology studies in which outsourcing penetration is lower. Several CROs are adding early stage capabilities to garner a greater share of outsourcing within this market segment. Companies looking to expand and capitalize on these opportunities, however, expect to increase capital expenditure and build new facilities or acquire them.

As CROs continue to expand their global presence, they must coordinate closer with IT vendors to ensure the systems are in-line with the rapidly changing requirements of the market. Also, moving forward, we are likely to witness a greater role for CROs in deciding on the IT systems and platforms to invest in as the decision-making moves away from sponsors.

One of the most significant trends within the US, as well as global CRO markets, is the move from transactional to strategic outsourcing by sponsors. The fact that CRO market growth has consistently outpaced R&D spending growth is an indicator that outsourcing penetration is on the rise. It is also interesting to note there have been several preferred partner announcements; the Covance-Eli Lilly partnership being the most recent and interesting one. More deals are expected to be announced, signifying a move toward this trend. These types of partnerships are driven by the fact that despite significant increases in R&D spending, the number of new drug approvals is at a historic low.

Specialty Pharma magazine recently asked some leading CROs to respond to some of the current trends that Frost & Sullivan has identified. Participants included the senior vice president of corporate strategy for Charles River…Read the full article.