Do Niche CROs have a Role in Drug Development?

Dr Nermeen Varawalla, MD, DPhil (Oxon), MBA

President & CEOECCRO

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Disclaimer

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Role of Specialist CROs in Drug Development

• Definition and place in CRO Market• Industry Analysis• Sponsor’s Perspective• Best Working Practices

Agenda

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Segmentation of the CRO Industry

Large Full Service Global

Niche / Specialist

• Over 75% Market Share• Enjoy disproportionately large share of sector growth• Annual Revenues range from $250M to over $1B

Main Categories of CROs

Mid-Sized• Approx. 15% Market Share• At risk of being “squeezed” between two groups• Annual Revenues range from $50M to $200M

• Less than 10% market share• Highly fragmented, usually privately owned• Include regional, therapeutic & functional specialists

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Complexity of Drug Development is Increasing.

•Increase in Mean Number of diagnostic procedures performed per subject•Driven by

• regulatory need to enhance pharmacovigilance

• quest for improved efficacy and outcome data

•Global reach escalating•Spend per accrued subject increasing

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In the Post Credit Crunch Environment

Imperative to enhance the cost

effectiveness of drug development is huge.

Real pricing pressures and

competition amongst CROs.

William Blair and Company, LLC, April 2009. Survey of 19 biopharmaceutical sponsors

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Sponsors want more for less from their CROs

CROs able to meet sponsor

expectations are valued and rewarded.

William Blair and Company, LLC, April 2009. Survey of 19 biopharmaceutical sponsors

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Engaging a Specialist CRO

• Expertise in a geographical region• Strength in a function• Relationships with leadership• Track record of delivery• Innovation and consistent quality

William Blair and Company, LLC, April 2009. Survey of 19 biopharmaceutical sponsors

Common Reasons for Selecting a Specialist / Niche CRO

• Fragmented market with a handful of leading players• More than 30% of respondents have no experience with niche vendors• Consistent usage is rare

However,

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• Limited in-house project / vendor management resource

• More personalised & better service from similar sized vendor, hence opt for mid-sized

• Cash available for high value projects, but must be wisely deployed

• Big is not always beautiful

Virtual Model

Mixed Resourcing: in house + full service preferred provider

Growing aversion to change orders

Recognise and value specialist expertise

Expect large CRO to sub-contract as needed

Large Pharma

Engaging Niche CROs: Customer Views

ECCRO survey of 6 sponsors, August 2009

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The role of Specialist CROs

• Best in class expertise in a region or function• Customised, flexible service• Engagement of experience• Potential to innovate and be creative• Drug development today needs big and small vendors

What do Specialist / Niche CROs offer?

• Provision for resource cost for multiple vendor management • Niche CROs must fit in with big, global player• Clear and consistent value delivery

How best to work with Specialist / Niche CROs?

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Dr Nermeen Varawalla, MD, DPhil (Oxon), MBAPresident & CEOECCROLondon, UK

Tel: +44 207 1210173E-mail: nermeen.varawalla@eccro.com

Questions…..