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CROs & Clinical Trials:Strategic Partnerships Driving
Future Growth?
December 14th, 2010
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Agenda
• CRO Market Overview
• 2009-2010 Performance Review
• Tactical vs. Strategic Outsourcing
• Review of Major Strategic Deals
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What do CROs offer?
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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 EnvironmentRising R&D Cost
Pressure to Improve Clinical Pipeline
Integration of Pharma and Biotech Commoditization of Services
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CRO Market Structure
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Review of 2009-2010 CRO Performance
Top 6 Publicly Traded CROs: Covance, Charles River, ICON, Kendle, Parexel and PPD
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Tactical vs Strategic Outsourcing
• Project-by-project focus • Integrated program outsourcing throughout lifecycle
• Competitive bidding • Funnel a large percentage of work to a few strategic partners
• Inconsistent monitoring • CRO performance monitored and tracked by internal benchmarks
• Superior-subordinate relationship
• Well-defined governance structure
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Types of Outsourcing Relationships
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Review of Major Strategic Deals
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Covance – Eli Lilly (2008)
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PPD – Merck (2009)
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Covance – Sanofi Aventis (2010)
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Review of Deals
Win-WinWin-Win
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Key Strategic Objectives
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CRAMsCRAMs
CROsCROs Drug ManufacturersDrug Manufacturers
Contract Research and Manufacturing Contract Research and Manufacturing OrganizationsOrganizations
Emerging Hybrid Business ModelEmerging Hybrid Business Model
• Global scale ─ ability to run clinical trials across global regions
• eClinical capabilities for clinical trial management
• Access to patient pools
• Global scale ─ ability to run clinical trials across global regions
• eClinical capabilities for clinical trial management
• Access to patient pools
• Scalability of drug manufacturing from clinical trials to commercialization
• Reduces fixed costs for pharmaceutical industry
• Access to proprietary drug delivery platforms
• Scalability of drug manufacturing from clinical trials to commercialization
• Reduces fixed costs for pharmaceutical industry
• Access to proprietary drug delivery platforms
Contract Services Employing Hybrid Business Models
Source: Frost & SullivanSource: Frost & Sullivan
16
Questions?
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Next Steps
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For Additional Information
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Jennifer BriceIndustry ManagerPharmaceuticals & Biotechnology(650) [email protected]
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