Unlikely CEE CROs & CMOs can maintain sustainable growth; report

28-Sep-2009 - Last updated on 29-Sep-2009 at 08:18 GMT

Fierce competition from India and China means it is unlikely that CROs and CMOs in CEE can generate sustainable growth, according to a report that believes the service model must be a “stepping stone” to creating innovative R&D businesses.

Since 2004 the European Union has undergone considerable expansion and the biotech markets of these new members, plus Turkey and Croatia that are in negotiations to join, are assessed in a report by EuropaBio and Venture Valuation.

In the 14 countries studied 70 per cent of biotech companies operate as services firms, with the majority being contract research organisations (CRO) and contract manufacturing organisations (CMO).

The report believes this business model will help the countries develop stable know-how and wealth in the healthcare field but is concerned about its long term prospects, noting it “is unlikely to be a sustainable growth sector due to the fierce competition with China and India”.

Consequently the report recommends that the countries increase efforts to develop an environment in which biotech innovation can prosper and has issued draft guidance detailing some measures.

Some actions have been taken by the countries but they are all at varying stages of development. Consequently the report divides them into four groups and issues different recommendations to each.

The most advanced biotech sectors are in Hungary, Poland, the Czech Republic and Estonia, according to the report that recommends the creation of science parks and biotech clusters and the promotion of funding opportunities in these countries.

Bulgaria, Malta and Croatia are regarded as the least advanced and for these countries the report recommends government’s strengthen political commitment to biotech and introduce related training and education.

The report can be viewed here and the draft guidance is available here.