Envigo CEO: growth strategy, industry challenges

Earlier this year, Envigo appointed Dr. Adrian Hardy as the company’s new president and CEO. To learn more about the appointment and the company’s vison moving forward, Outsourcing-Pharma.com talked with Hardy about challenges and opportunities in the industry.

Outsourcing-Pharma.com: ​What is Envigo’s growth strategy moving forward?

Adrian Hardy:​ Envigo is a diversified, full service CRO, and we see ourselves well positioned for growth with our pharmaceutical customers. Over the last couple of years we have seen some consolidation in the non-clinical CRO space that has left three large scale, global players who are able to serve both smaller biotech customers and multinational pharmaceutical companies.

We might be the smallest of the big three, but we punch above our weight thanks to our experience and investments in science and technology that make us a market-leading firm in therapeutic areas, such as respiratory and oncology. Envigo is also highly regarded for our safety and efficacy testing of new biological entities. Hence we will capitalize on those key areas of strength as one of the elements of our go-to-market strategy.

Having the research models business in Envigo’s portfolio is also a big plus because we can offer a broader range of products and services to customers. Our position here is unique, as our customers can do their research in the same animals, being fed the same diet with the same nutritional content as when those animals were bred. And further, we can carry this through to the development phases in our laboratories.

Another element of our strategy is to diversify and improve our service offerings. Envigo is always looking for smart ways to add to our capabilities, being very much led by what our customers need to meet their regulatory and commercial challenges. Some services we will develop internally, and you may have seen recently that we launched an R&D funding structure specifically for new developments, managed and distributed by our Science and Technology Advisory Group. And we will always keep our eyes open for interesting new technologies to acquire and bring into the portfolio.

Finally, we believe Envigo’s growth will be driven by creating a differentiated experience for our customers when working with us. Recently we hired a VP of Customer Experience to focus exclusively on this -- enhancing the voice of our customers within Envigo and shaping our thinking and our processes throughout interactions with them. It’s a big commitment from the organization, but our research convinces me that it is really important to our customers, and so it is very important to me.

Outsourcing-Pharma.com: ​How will the company work to overcome challenges in the industry?

Hardy:​ Increased regulation is a double edged sword for a CRO like Envigo. On one side we do have to continually invest in ongoing professional development of our staff to stay ahead of changes, and occasionally new technologies, approaches or IT infrastructure to meet new requirements, such as SEND-ready reporting.

Conversely, increased regulation also tends to affect our customers, and typically leads to a more complex regulatory environment. Our expertise is then a great help to customers, ensuring they follow the right path in full compliance. We have a large and hugely experienced regulatory team that brings a lot of value to customers. It is one of the key service-level differentiators we have in the market place.

Outsourcing-Pharma.com: ​What are the biggest areas of opportunity for Envigo and for the industry as a whole?

Hardy:​ I think for the industry one the biggest drivers is the continued decrease in the amount of non-clinical development that large pharmaceutical companies choose to do in-house and instead choose to outsource to CROs like Envigo. I’ve seen this change quite rapidly in the 15 years I’ve been in this industry as drug companies have increasingly seen the speed and cost-efficiency benefits of using a CRO.

When I started, no big pharma company would outsource their pre-IND development to a CRO, whereas just last year one of the largest pharmaceutical companies in the world gave us exclusive first right of refusal to all of their new molecule pre-IND packages. Exactly how much in-house non-clinical work remains to be outsourced is the subject of widely varying estimates in the market, but I am sure there is still plenty of market growth available to our industry.

The second factor that I think is key is the ever increasing complexity of drug development. First it was the rise of biologic drugs such as monoclonal antibodies and recombinant proteins, which demanded new approaches to regulatory development as the focus shifted from off-target toxicity to on-target exaggerated pharmacology.

Then, with the advent of initiatives such as the Critical Path Initiative from the FDA we saw a rise in safety and efficacy biomarkers being applied in toxicology studies. It is not uncommon now to run safety studies where the value of the toxicology is less than the associated chemistries.

Finally, I think there continues to be a large opportunity for CROs and customers to partner with each other to improve the productivity of R&D. We have seen great progress recently in this regard, but there is still a lot to do. While the number of new drugs approved by regulatory agencies has increased steadily the past 5-7 years, and the percentage of sales spent by companies on R&D has stabilized, there are still many ways we can make R&D more efficient.

For example, today current technologies and methods of conducting non-clinical R&D are providing the industry with ways to gather more and better data to make go-no-go decisions. As an industry we must remain focused on such opportunities.