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CROs & Clinical Trials:Strategic Partnerships Driving
Future Growth?
December 14th, 2010
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Agenda
• CRO Market Overview
• 2009-2010 Performance Review
• Tactical vs. Strategic Outsourcing
• Review of Major Strategic Deals
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What do CROs offer?
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Factors Affecting Market Growth
CONTRACT RESEARCH ORGANIZATIONS MARKET (2010-2017)
Shift Toward Strategic Outsourcing
Pressure to Lower Fixed Costs
Improving R&D Efficiency and Quality
Demand for Global Trials
Stringent Regulatory EnvironmentRising R&D Cost
Pressure to Improve Clinical Pipeline
Integration of Pharma and Biotech Commoditization of Services
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CRO Market Structure
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Review of 2009-2010 CRO Performance
Top 6 Publicly Traded CROs: Covance, Charles River, ICON, Kendle, Parexel and PPD
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Tactical vs Strategic Outsourcing
• Project-by-project focus • Integrated program outsourcing throughout lifecycle
• Competitive bidding • Funnel a large percentage of work to a few strategic partners
• Inconsistent monitoring • CRO performance monitored and tracked by internal benchmarks
• Superior-subordinate relationship
• Well-defined governance structure
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Types of Outsourcing Relationships
9
Review of Major Strategic Deals
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Covance – Eli Lilly (2008)
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PPD – Merck (2009)
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Covance – Sanofi Aventis (2010)
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Review of Deals
Win-WinWin-Win
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Key Strategic Objectives
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CRAMsCRAMs
CROsCROs Drug ManufacturersDrug Manufacturers
Contract Research and Manufacturing Contract Research and Manufacturing OrganizationsOrganizations
Emerging Hybrid Business ModelEmerging Hybrid Business Model
• Global scale ─ ability to run clinical trials across global regions
• eClinical capabilities for clinical trial management
• Access to patient pools
• Global scale ─ ability to run clinical trials across global regions
• eClinical capabilities for clinical trial management
• Access to patient pools
• Scalability of drug manufacturing from clinical trials to commercialization
• Reduces fixed costs for pharmaceutical industry
• Access to proprietary drug delivery platforms
• Scalability of drug manufacturing from clinical trials to commercialization
• Reduces fixed costs for pharmaceutical industry
• Access to proprietary drug delivery platforms
Contract Services Employing Hybrid Business Models
Source: Frost & SullivanSource: Frost & Sullivan
16
Questions?
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Next Steps
Request a proposal for or Growth Partnership Services or Growth Consulting Services to
support you and your team to accelerate the growth of your company. ([email protected]) 1-
877-GoFrost (1-877-463-7678)
Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global
Congress on Corporate Growth (www.gil-global.com)
Register for the next Chairman’s Series on Growth: Driving Innovation – The What, Why, and
How. Visions and Benchmarks as the Innovation Key
(October 5th) (http://www.frost.com/growth)
Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative
growth opportunities
(www.frost.com/news)
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Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?Please inform us by taking our survey.
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Frost & Sullivan’s Growth Consulting can assist with your growth strategies
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For Additional Information
NameCorporate CommunicationsIndustry(210) [email protected]
NameSales ManagerIndustry(XXX) [email protected]
Jennifer BriceIndustry ManagerPharmaceuticals & Biotechnology(650) [email protected]
NameSales ManagerIndustry(XXX) [email protected]