The importance of midsized CROs in pharmaceutical and medical device development.
It’s no surprise to industry insiders that the largest pharmaceutical companies rely on the largest contract research organizations (CROs) for the lion’s share of their outsourced R&D. For example, in the first quarter of 2015, 34% of ICON’s total revenue (approximately $134 million of its estimated more than $500 million in annual sales) was with one client, presumably Pfizer; […] ICON, Parexel and PPD all have partnerships with Pfizer; Covance (LabCorp) has partnered with Eli Lilly, Bayer and Sanofi; and Quintiles has partnered with Takeda and Roche, to name a few.
The leading model for these relationships has increasingly become based on strategic partnerships offered by CROs. Strategic partnerships have largely supplanted project-by-project and preferred provider outsourcing methods, and for good reason. To remain profitable, sponsors are seeking greater productivity from their R&D investments, and this is often facilitated by highly integrated relationships spanning many years and multiple projects.
But, what does all this mean for pre-revenue, small and midsized pharma/biotech and medical device sponsors?
In his interesting article, Jason Monteleone explains with well structured arguments, why mid sized CROs might also be a source of world-class technology, global footprint, deep expertise in specific therapeutic areas or technologies or the most talented scientists.