CRO market poised for 6% annual growth, Icon CFO says

By Zachary Brennan contact

- Last updated on GMT

Related tags: Contract research organization

CRO market poised for 6% annual growth, Icon CFO says
As biotech cash continues to flood the coffers of CROs (contract research organizations), large pharma R&D is still relatively flat, which means CROs will see about 6% growth annually, Brendan Brennan, CFO of Icon, told investors last week at the Jefferies Global Healthcare Conference.

Our thesis on this really boils down to: yes, there’s a lot of biotech funding out there at the moment, yes there’s a lot of small companies with capital to spend that are relatively new to the marketplace, but balance that with the heads of all big pharma departments being told to do more with less, and that’s what brings us to​” 2-3% growth in R&D overall, Brennan said.

In terms of penetration for CROs, Brennan said about a decade ago it was set around 25%, which has since grown to about 40%, though Icon seems to believe that level will peak at about 60% in the next five years, which coupled with the R&D growth, could mean the CRO industry growth will be about 6%.

The comments represent a step back in terms of expectations for the industry.  In January, Icon CEO Ciarran Murray told investors​ that the CRO market was set to grow 8% annually. However, in terms of market penetration, Brennan’s comments echoed those of Parexel CFO Ingo Bank​, who told investors late last year that that figure was likely to hit 60%.

Evolution of Outsourcing

As the industry has evolved and the complexity of trials has increased substantially, Brennan noted that “access to patients is still the number one goal​.”

And with the shifting landscape, he noted that CROs are now working more closely with sponsors and there’s a new concept of “portfolio management​” between the CRO and the sponsor.

In the past it was very much more about each individual drug, but now there’s a deeper conversation about how they manage their portfolio of drugs and how that investment is best utilized across their R&D portfolio​,” he added.

Evidence that a drug has value and can actually be reimbursed is another top area that CROs are now helping sponsors with, particularly on the biotech side, Brennan said.

And as the use of CRO services increases, companies are now seeing more visibility in a CRO’s backlog, which offers “greater visibility on how revenue will flow through​,” Brennan added, noting that “in the past there was much faster burn​.”

Related news

Show more

Related products

show more

What should a clinical metadata repository do?

What should a clinical metadata repository do?

Formedix | 26-Jul-2021 | Technical / White Paper

Choosing a clinical metadata repository (MDR) software can be a tough task as the capabilities and features of your chosen MDR could make or break your...

Adapting supply chains to new ways of working

Adapting supply chains to new ways of working

World Courier | 15-Jul-2021 | Technical / White Paper

COVID-19 has changed the way we operate. We have adapted our supply chain solutions to meet our clients’ requirements while following World Courier standard...

Empowering Clinical Trial Sponsors with Analytics

Empowering Clinical Trial Sponsors with Analytics

PerkinElmer | 14-Jul-2021 | Technical / White Paper

Is your Clinical Data Review creating problems or solving them? Take Control of Your Data. PerkinElmer Informatics Clinical Solutions, powered by Tibco...

Related suppliers

Follow us

Products

View more

Webinars