Bayer CRO consolidation sets up Covance for rise in revenue

By Nick Taylor

- Last updated on GMT

Related tags Contract research organization Bristol-myers squibb Covance

Bayer CRO consolidation sets up Covance for rise in revenue
Bayer could spend up to 50 per cent more with Covance after it cuts ties with its other late phase CRO partner.

Last month Bayer strengthened its pre-existing relationship with Covance by inking a late phase deal with the contract research organisation (CRO). Before entering into the alliance Covance was one of two late phase CROs with which Bayer worked closely but it is now set to capture more of the work.

We view the fact that Bayer opted to shift from two clinical partners to only one as another strong indication that Covance is gaining credibility as a high‐quality, leading player in late‐stage clinical​,” John Kreger, equity analyst at William Blair, wrote in a note to investors.

By becoming the main source of late phase services Covance could generate up to 50 per cent more sales from Bayer over the next several years. Kreger, after hearing from Covance management at the William Blair Annual Growth Stock Conference, said extra sales of up to $125m (€99m) are possible.

The decision by Bayer to work with one late phase CRO partner goes against the thinking at several other major biopharmaceutical companies. Firms that have chosen two or more late phase partners include Bristol-Myers Squibb (B-MS), Shire, GlaxoSmithKline, Pfizer, Takeda, and UCB.

After B-MS inked an alliance with Icon and Parexel in 2010 a spokesperson for the pharma company told Outsourcing-Pharma.com that having two partners is “the best way to channel volume of work while ensuring some level of risk mitigation​.”

Moving away from a two-partner model to working with just Covance suggests, as Kreger noted, that Bayer is very confident the New Jersey-headquartered service provider can reliably meet its needs.

By increasing its standing in late-phase clinical, an area it traditionally lagged its CRO rivals, Covance has offset continued weak demand for toxicology and the slowing of growth in central laboratory.

Related topics Clinical Development Phase III-IV

Related news

Show more

Related products

show more

Using Define-XML to build more efficient studies

Using Define-XML to build more efficient studies

Content provided by Formedix | 14-Nov-2023 | White Paper

It is commonly thought that Define-XML is simply a dataset descriptor: a way to document what datasets look like, including the names and labels of datasets...

Overcoming rapid growth challenges with process liquid preparation

Overcoming rapid growth challenges with process liquid preparation

Content provided by Thermo Fisher Scientific - Process Liquid Preparation Services | 01-Nov-2023 | Case Study

A growing contract development manufacturing organization (CDMO) was challenged with the need to quickly expand their process liquid and buffer preparation...

Why should you use clinical trial technology?

Why should you use clinical trial technology?

Content provided by Formedix | 01-Nov-2023 | White Paper

New, innovative clinical trial technology is helping to revolutionize the research landscape. COVID-19 demonstrated that clinical trials can be run much...

Related suppliers

Follow us

Products

View more

Webinars