The contract research organisation's (CRO's) phase I business is in growth mode - despite what some may have predicted after the negative publicity the firm received following the Tegenero drug trial incident last year where six out of eight men it carried out a Phase I trial on experienced a severe and systemic adverse reaction and were admitted to intensive care with hours of taking the experimental drug. The firm has proved the old adage that there is no such thing as bad publicity and it seems that those in the industry are largely aware that what happened on that dark day could have happened to any CRO. In April, Parexel announced yet another set of healthy financial results, with third fiscal quarter sales in its contract service business, including the Clinical Research Services (CRS) segment, climbing 27 per cent to $143.5m (€106.5m). On the delicate subject of Tegenero, Herman Scholtz, corporate vice president and worldwide head of Clinical Pharmacology - early phase development, spoke candidly. "Tegenero was a wake-up call for this industry, which up until then had a very good safety record," he told Outsourcing-Pharma at last week's Drug Information Association (DIA) conference in Atlanta. "It has reinforced the concept that first-in-man trials carry risk and refocused everyone's attention again on procedures and safety drills." According to Scholtz, the incident also emphasised the value of running such trials in a hospital setting, and also pointed out that Parexel is the "leading hospital-based CRO," with six Phase I clinical facilities actually in hospitals and two others on hospital campuses. Another lesson learned is that if a new biologic molecule is perceived to be 'high risk,' then more extensive preclinical testing is called for, he added. On the newly-implemented UK guidelines which call for extra scrutiny of approval for first-in-man studies on high risk compounds, Scholtz thinks they are "good overall" but is concerned that they may cause certain compounds to be "labelled as high-risk early on in their development." "This label could be unfair and one should be careful," he said. "Most of the criticism I have seen directed towards these guidelines has centred around how molecules are going to be defined as high risk, however, of course it is better to err on the side of caution." The UK has led the way on such guidelines and Europe is also in the progress of developing something similar. Scholtz believes the US Food and Drug Administration (FDA) will eventually follow suit, although it does already provide some coverage for first-in-man trials, and it is possible it may wait for the formation of a new International Conference on Harmonisation (ICH) guideline on the issue. Meanwhile, Scholtz said that the company is currently witnessing a "definite trend toward clients that are wanting to test the efficacy of their Phase I compounds in patient populations as soon as possible." Because of the nature of Phase I trials, it has been common practice to do single dose studies in healthy volunteers, then move to multiple dose studies in healthy volunteers, and after around two to three months, move on to trials in the target patient population. "Now it is increasingly common that after initial first-in-man studies are carried out, trials move straight into patient populations, although in order to do this strict inclusion/exclusion criteria for these patients needs to be followed, based on factors such as age or stability of disease, to ensure they are as 'healthy' as possible," said Scholtz. In this way, drug development timelines can be cut, he explained. Each day saved in clinical development is one day earlier the drug can be released onto the market and start bringing in the bucks. This can be the difference of millions of dollars in the case of a blockbuster. "Most of our Phase I work is currently coming from small companies who are developing new compounds with the intention of selling them to big pharma and for these small firms, first-in-man and proof of concept (POC) studies are critical requirements for licensing deals," said Scholtz. "As soon as companies can demonstrate signs of efficacy and safety they can begin negotiating these licensing deals." Meanwhile, another trend the firm is witnessing is the increase in QTc studies along with insulin clamp studies. "QTc studies are a growing market because they need to be done as a precautionary measure on all drugs that may have the ability to affect the heart," said Scholtz. This was mandated by the FDA two years ago following a number of concerns over drugs that were found to induce rhythmic disturbances. In addition, insulin clamp studies are ballooning as a result of the amount of diabetes research now being conducted. Parexel is currently conducting a lot of this work from its facilities in South Africa, which offer a cost-friendly environment for such trials. The average cost of running a US-based Phase I clinical trial has been estimated at $5404 per patient. "In Phase I, the motivation for using emerging markets is cost," said Scholtz, as opposed to the later clinical phases, where "the access to a large pool of possible trial subjects is more of a drawcard." "We choose to do this type of Phase I work rather than a lot of first-in-man work in South Africa because we want to be seen to be acting as ethically-responsibly as possible." Likewise, India is a well-documented emerging and low-cost clinical research hot spot and Parexel is also eyeing this region for more future investment. Currently India is not strong in terms of Phase I research, and it is one of the few countries that also has a ban in place for Phase I studies on drugs that aren't domestically produced. All this is expected to change over the next 18 months and when it does, Parexel will begin offering the same Phase I services as it does in its other global locations, including first-in-man studies, indicated Scholtz. The firm has already begun edging itself into the region through a joint venture formed in July last year with Bangalore-based Synchron Research Services, which among other things, brought it a 20 per cent equity interest in the 86-bed clinical-pharmacology business of Synchron in Ahmedabad. The firm has also just announced the establishment of its first wholly-owned operation in India, where it will now offer data management and other clinical support services such as monitoring and project management from its new site in Hyderabad.