Clinical Research organisations during the recession – Frost report on CRO’s
According to a recent report carried out by Frost and Sullivan, the CRO industry will continue to expand despite conjecture resultant of the unstable economic climate we have recently gone through. In this climate, biotechnology and pharmaceutical organisations keep away from investing in in-house capabilities for the conduct of their studies and in turn rely on outsourcing to CROs.
A note of warning has also been reported, where “American CRO Market-Key Therapeutic Areas” expects that battling biotech and pharma organisations are likely to fail to pay current ongoing projects. However, this trend is not expected to last over the long term.
Senior industry analyst for Frost and Sullivan, Barath Shankar Subramanian revealed that the annual revenue growth for CROs has decreased from the 14-15% range to 10% this past year.
Projected Prediction – for pharmacology companies or CRO’s
Although, this is not all bad news – Subramanian claims that the industry’s annual revenues will double from now until the year 2015, growing from a current 12.91 billion to $22.87 billion in the years to come. This, he says, will be due to sponser firms increasingly adopting tactical partnerships with smaller services firms or CROs. “After 10 years of talking about such relationships, CROs and pharma companies are beginning to forge them,” he says.
Subramanian uses the huge Eli Lilly/Covance deal made in August last year to exemplify this claim, where Covance has contracted out $1.6 billion worth of drug development projects to Lilly for the next 10 years.
“That’s the flavour of the season,” Subramanian says. “We’re seeing some new models being explored when previously it was purely transactional, with CROs taking a wait and watch attitude toward strategic partnerships.”
A further development is CROs or clinical research organisations allowing sponsors to keep hold of hopeful molecules for longer into the research cycle. Biotechnology and Pharmaceutical companies just starting out would often out-licence products after Phases I and II; resulting in a vast amount of uncertainty of the future of the assignment. These days, on the other hand, more of these firms can retain products in their pipeline for longer, which means bringing them closer to the market. This is made possible by the cost savings associated with CRO partnerships. This is a great step forward for sponsors and CROs.
Author Tip: clinical studies conducted in the UK by professional CRO’s are the best choice for aquiring the most accurate data.
* Make sure that you consult your doctor before taking any medical advice of any kind.
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