I have posted a number of notes about contract research organizations (CROs) in the past, primarily relating to Covance and Charles River. My interest in them has been sparked by the fact that lab testing comprises a large component of the clinical trials that they manage.The news continues to be bullish on CROs, in part because of the active outsourcing of Big Pharma to the CROs which have been quite willing to respond to these new opportunities (see: Lilly outpacing the industry in accelerating its clinical research outsourcing). Below is an excerpt from the article (boldface emphasis mine):
The CRO market was recently estimated at $16.3B for 2006 by Turner Investment Partners with 12.6% compounded annual growth through 2011. Significant growth drivers are the focus on cost control and emphasis of internal efforts on developing the drug pipeline.This week, Eli Lilly announced three deals with Covance, Quintiles, and i3 that easily could more than double their current level of outsourcing.
- The biggest of these three deals by far is the 10-year, $1.6B deal with Covance selling them their Greenfield Indiana facility for $50M and assuming 260 Lilly employees. According to Forbes, the Covance CEO says they already do “about $70 million in work annually for Lilly. The new contract will lock that in and add $90 million annually.”
- U.S. clinical-trial monitoring work will be transferred to Quintiles, another large CRO.
- Data management will be transferred to i3, a CRO subsidiary of United Healthcare.
The integration between pharmaceutical companies like Lilly and a CRO like Covance continues with the latter now absorbing some of the former's employees. I have published a number of notes about United Healthcare in the past, but was not aware that the company had a CRO as a subsidiary.
The CROs are obviously expanding their mission statements in response to this eye-popping growth and demand for a broader range of services from the pharmaceutical companies. As one example, here is such a statement from i3 copied from its home page:
Help at every stage of the pharmaceutical product lifecycle
Develop: Focused therapeutic and scientific expertise from discovery to launch.
Market: The vision to help you realize the full potential of your brands.
Manage: Comprehensive clinical data, drug safety, and staffing services.
Improve: Strategies for monitoring safety and increasing competitive advantage.
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