As CMOs wait to see the short-term fallout of the Pfizer-Allergan deal, an M&A expert says contract manufacturing will follow the CRO industry in embracing strategic alliances and consolidation.
CMO consolidation strategy has shifted from building scale and adding geographies towards niche technologies and biologics, according to the founder of trade association PBOA.
The fight between CROs for clinical research associates (CRAs) and people with certain other skillsets is hotting up, with both Icon and Quintiles identifying it as an issue faced by their businesses.
Reports Pfizer is considering buying Allergan to create a company worth $330bn have once again raised fears of disruption for contract research organisations (CRO), although there are reasons to think the deal would be less troublesome than earlier megamergers.
Covance has reported capacity use at its preclinical toxicology business is in the 70% range, meaning it is still well below optimal levels despite recent improvements.
As pharma sells off manufacturing capacity and outsources to large and specialist CMOs, smart contract houses will have an opportunity to grab market share in a currently fragmented sector, say experts.
Standard & Poor has assigned a ‘stable’ rating to Greatbatch after the contract manufacturer secured $1.5bn to buy fellow medical devicemaker Lake Region Medical.
