1. What Does the Future Hold forClinical Service Provider-Sponsor Relationships?Executive Summary of Results from theAvoca 2010 Industry Survey June 2010

2. CONTENTS Introduction: Objectives of the Industry Survey Methodology Respondents Key Findings Conclusions 2

3. OBJECTIVES OF THE INDUSTRY SURVEY Each year, The Avoca Group polls industry management to understand trends in the outsourcing of clinical research. 2010: How outsourcing relationships are expected to change between the present and 2014. 3

4. OBJECTIVES OF THE INDUSTRY SURVEYQuestions were posed about: Drivers of change in sponsor-clinical service provider relationships Changes companies plan to make to increase the efficiency and quality of outsourced clinical trials Strategies for successful implementation of new outsourcing strategies and tactics How planned changes will impact outsourcing strategies, vendor selection priorities, and the management of outsourcing relationships. 4

5. METHODOLOGY Invitations to participate were emailed to selected executives and managers of sponsor and service provider companies during Q1 2010. Links within the emails directed respondents to the appropriate web-based survey instruments: sponsor perspective provider perspective Respondents who completed the survey were offered an executive summary of the survey results. For questions in which participants were asked to respond on behalf of their companies, only one respondent per company (the most senior) was used in the analysis in order to avoid over-representation of companies with multiple participants. 5

6. RESPONDENTS285 surveys 109 sponsor surveys 73 companies 72% pharmaceutical companies; 22% biotech; 6% other 48% self-described Top 20 70% executive/middle management 174 service provider surveys 88 companies 71% full-service CROs 59% self-described Top 20 79% executive/middle management 6

7. Sponsor Respondent CompaniesAbraxis Bioscience Cardiokine GlaxoSmithkline Orion Pharma Global Alliance for TB DrugAchaogen CareFusion Research Services OSI Pharmaceuticals DevelopmentActavis South Atlantic Celgene Grunenthal OtsukaActelion Celtic Pharma Development Hoffmann-La Roche Pain TherapeuticsActivX Biosciences Chugai Pharma Europe Incyte RatiopharmAdnexus Cognizant Intendis RegeneronAllergan Collins Johnson & Johnson SanofiAllon Therapeutics Cordis Corporation Knopp Neurosciences SantheraAmarin Technologies Coughlan Kowa Research Europe Shire Pharmaceuticals Dainippon Sumitomo PharmaAmgen Lexicon Solvay Pharmaceuticals AmericaAmylin Deltanoid Pharmaceuticals Lilly Teva PharmaceuticalsAstellas Pharma Dey LP Lundbeck TibotecAstraZeneca Eisai MedImmune Vicus TherapeuticsBaxter Endo Merck Wyeth ResearchBayer Schering Pharma Ferring MillenniumBIAL Five Prime Therapeutics Mitsubishi Pharma EuropeBiogen Idec Forest Laboratories NovartisBMS Fresenius Biotech Novo Nordisk Genentech, Member of RocheCadence Pharmaceuticals Ocasio group 7

8. Provider Respondent CompaniesAagami DCL Medical Laboratories KLIXAR QED Clinical ServicesAcurian Eurofins Medinet Kromite LLC QuanticateAepodia Eurotrials Kuantum CRO Quest DiagnosticsAsia Global Research ExecuPharm Laboratorio Hidalgo Quintiles FOCUS Clinical DrugAsiatic Clinical Research LatAm Clinical Trials Radiant Research DevelopmentAverion Forma Life Science Marketing Manipal Acunova Limited RadPharmAxiom Marketing Gagnon Medpace REGISTRATAXIS Clinicals GFA MedPoint Communications ResearchPointAxis Group GVK Biosciences Private Limited MRC RH Bouchard & Associates Ronald Fehst ResearchBeckman Coulter Genomics Harrison Clinical Research Group Myoderm ConsultantsBiomedical Systems Harte Group Ockham RxResearch StaffingC3i i3 Research Omnicare Sariola-HeinerClinForce ICON Paragon Biomedical SQV Clinical Research ServicesClinical Financial Services INC Research PAREXEL Stiris ResearchClinical Research Management IndiPharm Pharma Medica Research TFS Trial Form SupportCogent Performance InsightRx Consulting LLC Pharma Services Network TKL ResearchManagementCOMSYS Clinical Integrium PharmaNet TooneConsentSolutions invivodata PharmaWrite US OncologyCovance IRB SERVICES Pharm-Olam Vantage BioTrialsCRS Clinical Research Services Iris PPD VirtualScopicsCyncron John R Vogel Associates PRA Woodley Equipment CompanyDatatrial Kendle PSI ZeeCRO 8

9. Key Findings

10. Sponsor Data 10 15 20 25 30 35 40 45 50 0 5 Better measurement of provider performance (Key Performance Indicators [KPI]) Increased use of preferred providershipsWhat changes has your Better methods of/criteria for provider selectioncompany recently (last Better internal information sharing regarding clinical research provider performance 2 years) made, or is it Reduced number of providers currently making, to Better delineation of expectationsimprove the efficiency Implementation of a functional "Lessons Learned" program of its outsourcing Improved outsourcing models relationships? Better capturing of relationship metrics (Key Relationship Indicators [KRI]) Increased use of technology platforms to improve communications (73 companies) Change in specific providers used More functional outsourcing More full-service outsourcing Increased incorporation of performance bonuses into contracts Increased incorporation of performance penalties into contracts Increased number of providers 10

11. Provider Data 10 20 30 40 50 60 70 80 0 Enhanced focus on repeat business Improved relationship managementWhat changes has your Increased pursuit of preferred providershipscompany recently (last Better capture of customer feedback 2 years) made, or is it More senior management involvement currently making, toimprove the efficiency Better delineation of expectations of its work with Better measurement of performance (Key Performance Indicators [KPI]) sponsors? Increased use of technology platforms to improve communications Better internal information sharing regarding sponsor expectations Improved outsourcing models (88 companies) Different resourcing models Implementation of a functional "Lessons Learned" program Better capture of relationship metrics (Key Relationship Indicators [KRI]) Increased incorporation of performance bonuses into contracts Increased incorporation of performance penalties into contracts 11

12. ThemesFor sponsors: Consolidation of outsourced work with a restricted number of preferred providers Changing criteria for selection of providers and preferred providers Investment in formal programs for measuring and managing performance and relationship qualityFor providers: Increased focus on pursuit of long-term preferred client relationships Investment in formal programs for measuring and managing performance and relationship quality 12

13. Future Direction #1 Sponsors:Consolidation of outsourced work with preferred providers Providers: Increased focus on pursuit of long-term preferred client relationships

14. Where are we now? 69% of sponsors currently have preferred provider arrangements. More than of providers are increasing their pursuit of repeat business, and more than half are increasingly pursuing preferred provider relationships in particular. 14

15. Sponsor Data What approximate percentage of your How has this percentage changedclinical research outsourcing spend went between 2007 and the present? to your preferred providers in 2009? 11% Increased 0% - 25% 26% 26% - 50% Decreased 42% 25% 51% - 75% 4% Stayed the 76% - 99% same 70% Dont know Dont know 22% N=45 N=47 15

16. Provider DataWhat approximate percentage of your How has this percentage changedannual revenue came from preferred between 2007 and the present? clients in 2009? 11% Increased 0% - 25% 31% 35% 26% - 50% Decreased 23% 51% - 75% 55% Stayed the 76% - 99% same 14% Dont know Dont know 31% N=71 N=67 16

17. Is there evidence that increased allocation topreferred providers results in higher quality work or greater value? If so, why? 17

18. Sponsor DataIn general, how satisfied are you with the work that has been done for you by Clinical Service Providers? N % spend to preferred providers No preferred providers 52% 24% 24% 21 0 - 75% 64% 16% 20% 25 76% - 99% 5% 58% 32% 5% 19 0% 20% 40% 60% 80% 100% Very satisfied - 5 4 Neither satisfied nor dissatisfied - 3 2 Very dissatisfied - 1 18

19. Sponsor DataIn general, how satisfied are you with the value that you have received for the money spent on your Clinical Service Providers? N % spend to preferred providers* No preferred providers 5% 14% 48% 33% 21 0 - 75% 48% 28% 24% 26 76% - 99% 58% 37% 5% 19 0% 20% 40% 60% 80% 100%* p