CRO market will have a healthier 2010; MDS

By Nick Taylor

- Last updated on GMT

Related tags: Mds pharma services, Pharmacology

The outsourcing “market is poised to return to healthier growth rates in 2010”, according to the president of MDS Pharma Services who also told Outsourcing-Pharma that CROs will play an increasingly important role in drug development.

Following the release of third quarter results, David Spaight, president of MDS Pharma Services, said that, although “dramatic improvements for the balance of 2009​” are unlikely, the market will pick up next year.

Spaight’s positivity is underpinned by the belief that “with the fundamental drug development paradigm changing, contract research organizations (CRO) are emerging with an increasingly important role in bringing new drugs to market safely and efficiently​”.

Other aspects of the operating environment will be more favourable to CROs in 2010, according to Spaight who cited pressures from healthcare reform, innovator patent expirations and patient demand for new treatments as drivers of growth in the sector.

Challenges of 2009

Net revenues in the third quarter fell by 28 per cent, accounting for discontinued operations, to $49m (€33.6m). This was attributed to economic pressures, delayed decision making, reduced access to capital for biotechs and also increased merger activity.

Spaight explained that MDS Pharma Services’ client base includes 44 of the top 50 pharmaceutical companies and consequently delayed drug development programmes as a result of mega-mergers have “been a major contributor to slower growth​”.

The company has also had to face clients “raising concerns about the future of MDS Pharma Services​” as a consequence as the strategic review process that has been ongoing.

However, Spaight believes the focus on discovery through Phase IIa and the proposed new ownership have helped to reassure clients “to some degree​”. Furthermore, MDS has addressed clients’ concerns openly and transparently and maintained service quality, according to Spaight.

New business wins fell year-on-year by 31 per cent to $52m. Adjusted EBITDA was a loss of $14m, which represents a $15m year-on-year decrease.

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