Strategic deal visibility creating opportunities for small CROs

30-Nov-2011 - Last updated on 30-Nov-2011 at 08:23 GMT

Online 24/7 news has accentuated big CROs’ ties to large pharma and created opportunities for smaller vendors, a CEO said.

Many leading CROs (contract research organisations) are increasingly reliant on a few big pharma partners. However, some believe perception of leading CROs’ ties to big pharma clients has changed more than the reality.

“I don’t think it’s intensified much, it’s just become a lot more visible. What has changed is the amount of electronic coverage of strategic outsourcing news”, John Illingworth, CEO of Illingworth Research, told Outsourcing-Pharma.

The higher profile of large vendors’ links to their top clients “accentuates the fact that a lot of the big CROs are mainly interested in strategic deals”, Illingworth said, and this has knock-on effects.

Consequences

Illingworth has seen an uptick in business, and “the pipeline for next year is wonderful”, but this could be linked more to other changes at the company than biotechs turning away from big CROs.

Lots of biotechs are still choosing to outsource to big CROs too. Peter Sausen, vice president of safety assessment, North America at Covance, said his project management team has more than doubled its number of clients since 2005.

The growth comes despite biotech funding difficulties, although Covance has still felt the impact of its clients’ capital constraints. From 2006 to 2009 Sausen’s team was bringing 40 molecules a year to IND (investigational new drug); last year this figure fell to 33 submissions.

Shifting perceptions

Illingworth has added at least three clients who, before increased awareness of strategic deals, he said would likely have chosen a big CRO. Increased discussion of big CROs’ ties to large pharma has made those on the periphery of drug development more aware of the situation, Illingworth said.

“We’ve had companies approach us in the past but back away, I think because the funders wanted a big CRO to be used. I think VCs (venture capitalists), or whoever’s providing funding, wanted to set criteria for who the biotech should outsource to.

“I’m seeing that disappear”, Illingworth said.