CENTRAL LAB MARKETDYNAMICS ANDOUTSOURCINGPERFORMANCE (2016-2019)M A Y , 2 0 1 6

P R E V I E W O F

C E N T R A L L A BM A R K E T D Y N A M I C S A N DO U T S O U R C I N GP E R F O R M A N C E

REPORT OVERVIEW

HOW YOU CAN USE THIS REPORT

125 PAGES

132 CHARTS

AND GRAPHS

VALUABLE FOR

MAJOR SECTIONS:1. Market Dynamics and

Outsourcing Environment

2. Regional Trends

3. Central Lab Service Provider Metrics and Selection

4. Service Provider Loyalty and Quality Profiles

5. Study Data – a comprehensive look at the responses to every question asked of participants

Introduction

SMARTER QUESTIONS SMARTER ANSWERS

Full table of contents included on next page.

FOR STUDY SPONSORS: • Understand the service areas expected to grow in demand

and the geographic trends associated with central lab service provider use to ensure you are up-to-date with how your industry peers are outsourcing their central lab work.

• Know the criteria used by peers to select central lab providers to help strategically and scientifically evaluate central lab bids for your business.

• Assess performance data provided in this report to select a provider that excels in areas important to you and/or determine how your current provider is performing relative to their competition.

FOR CENTRAL LAB SERVICE PROVIDERS:

• Determine the attributes and metrics critical to study sponsors in their selection of service providers to:

o Internally assess your lab’s capabilities in these areas and

o Evaluate whether your lab is marketing its abilities in the areas deemed important by sponsors.

• Gain knowledge of customers’ views of your performance and that of your competitors to be able to sufficiently tout your strengths and improve on perceived weaknesses.

The latest edition of ISR’s Central Lab Market Dynamics and Outsourcing Performance report evaluates a wide

variety of central lab service providers and key performance

measures. As in the past, analyses of market dynamics and

industry trends are also critical parts of this report.

New to this edition, we have included an examination of

translational labs, which support translational research

methodologies. Translational labs are designed to turn

fundamental research into medical and nursing practice and

meaningful health outcomes.

This report will help both study sponsors and providers

answer a number of questions relevant to selecting and

evaluating central lab service providers.

D A T A C O L L E C T I O N I N Q 1 , 2 0 1 6

2 0 - M I N U T E W E B - B A S E D

S U R V E Y

1 1 4 R E S P O N D E N T S F R O M N O R T H A M E R I C A ,

E U R O P E , A N D A S I A

SERVICE PROVIDERS

SPONSOR COMPANIES

OUTSOURCING DEPTS.

PROJECT MANAGERS

R&D FUNCTIONS

EXECUTIVE MANAGEMENT

CLINICAL OPERATIONS

Introduction

SMARTER QUESTIONS SMARTER ANSWERS

MARKET DYNAMICS AND OUTSOURCING ENVIRONMENT

Central Lab Market Dynamics and Outsourcing Performance (2016-2019) 14www.ISRreports.com ©2016

Outsourcing of Central Lab ActivitiesFirms requiring central lab support overwhelmingly seek outside suppliers� Overall, more than eight-in-ten (84%) central lab activities are outsourced�

More than half (54%) of those ISR interviewed outsource 100% of their central lab work�

Respondents see a slight increase in the average percent of central lab activities that will be outsourced from now (84%) to 2019 (86%)�

When your company conducts a clinical development study (whether in-house or outsourced), what percent of the central lab activities are outsourced? Your best estimate is fine. (n=114)Thinking three years from now, in 2019, when your company conducts a clinical development study, what percent of the central lab activities will be outsourced? Your best estimate is fine. (n=114)

CENTRAL LAB MARKET DYNAMICS AND OUTSOURCING PERFORMANCE REPORT (2016-2019)

13

Outsourcing of Central Lab Activities Firms requiring central lab support overwhelmingly seek outside suppliers. Overall, more than eight-in-ten (84%) central lab activities are outsourced. More than half (54%) of those ISR interviewed outsource 100% of their central lab work. Respondents see a slight increase in the average percent of central lab activities that will be outsourced from now (84%) to 2019 (86%). When your company conducts a clinical development study (whether in-house or outsourced), what percent of the central lab activities are outsourced? Your best estimate is fine. (n=114) Thinking three years from now, in 2019, when your company conducts a clinical development study, what percent of the central lab activities will be outsourced? Your best estimate is fine. (n=114)

1%

1%

1%

4%

2%

4%

5%

3%

14%

11%

54%

1%

2%

1%

3%

2%

6%

5%

5%

11%

11%

54%

0% 10% 20% 30% 40% 50% 60%

0% to 9%

10% to 19%

20% to 29%

30% to 39%

40% to 49%

50% to 59%

60% to 69%

70% to 79%

80% to 89%

90% to 99%

100%

% of Activies Outsourced

Currently 2019

Average Percent of Central Lab ActivitesOutsourcedCurrent 84%2019 86%

© Industry Standard Research

MARKET DYNAMICS AND OUTSOURCING ENVIRONMENT

Central Lab Market Dynamics and Outsourcing Performance (2016-2019) 14www.ISRreports.com ©2016

Outsourcing of Central Lab ActivitiesFirms requiring central lab support overwhelmingly seek outside suppliers� Overall, more than eight-in-ten (84%) central lab activities are outsourced�

More than half (54%) of those ISR interviewed outsource 100% of their central lab work�

Respondents see a slight increase in the average percent of central lab activities that will be outsourced from now (84%) to 2019 (86%)�

When your company conducts a clinical development study (whether in-house or outsourced), what percent of the central lab activities are outsourced? Your best estimate is fine. (n=114)Thinking three years from now, in 2019, when your company conducts a clinical development study, what percent of the central lab activities will be outsourced? Your best estimate is fine. (n=114)

CENTRAL LAB MARKET DYNAMICS AND OUTSOURCING PERFORMANCE REPORT (2016-2019)

13

Outsourcing of Central Lab Activities Firms requiring central lab support overwhelmingly seek outside suppliers. Overall, more than eight-in-ten (84%) central lab activities are outsourced. More than half (54%) of those ISR interviewed outsource 100% of their central lab work. Respondents see a slight increase in the average percent of central lab activities that will be outsourced from now (84%) to 2019 (86%). When your company conducts a clinical development study (whether in-house or outsourced), what percent of the central lab activities are outsourced? Your best estimate is fine. (n=114) Thinking three years from now, in 2019, when your company conducts a clinical development study, what percent of the central lab activities will be outsourced? Your best estimate is fine. (n=114)

1%

1%

1%

4%

2%

4%

5%

3%

14%

11%

54%

1%

2%

1%

3%

2%

6%

5%

5%

11%

11%

54%

0% 10% 20% 30% 40% 50% 60%

0% to 9%

10% to 19%

20% to 29%

30% to 39%

40% to 49%

50% to 59%

60% to 69%

70% to 79%

80% to 89%

90% to 99%

100%

% of Activies Outsourced

Currently 2019

Average Percent of Central Lab ActivitesOutsourcedCurrent 84%2019 86%

© Industry Standard Research

S A M P L E P A G E :

OUTSOURCING OF CENTRAL LAB ACTIVITIESISR surveyed 114 rindustry professionals for this report. The Market Dynamics and Outsourcing Environment section of this report includes data regarding current outsourcing volume, engagement structures, growth areas, and predictions for future trends.

This page details the percent of central lab activities currently outsourced, compared to predictions for 2019.

C L O S E R L O O K

Understanding the current and future outsourcing penetration will help sponsors and service providers make strategic decisions.

Learn more in the full report:

www.ISRreports.com

Introduction

SMARTER QUESTIONS SMARTER ANSWERS

MARKET DYNAMICS AND OUTSOURCING ENVIRONMENT

Central Lab Market Dynamics and Outsourcing Performance (2016-2019) 18www.ISRreports.com ©2016

Central Labs Service Provider Future Growth AreasBiomarker services offered by central lab service providers are predicted to see the most growth in customer demand over the next three years, with nearly one-quarter of those interviewed (28% Preclinical through Proof of Concept and 23% Phase IIB through Commercialization) mentioning this service� Research areas, such as immunology, hematology, and genomics will see noticeable growth as well�

The services offered by the larger central lab service providers are numerous and broad. From the list below, which will see the most growth in demand from your company over the next three years? Please select all that apply. (n=114)

Again, the services offered by the larger central lab service providers are numerous and broad. From the list below, which three (3) will see the most growth in demand from your company over the next three years? (n=114)

Again, the services offered by the larger central lab service providers are numerous and broad. From the list below, which one (1) will see the most growth in demand from your company over the next three years? (n=114)

CENTRAL LAB MARKET DYNAMICS AND OUTSOURCING PERFORMANCE REPORT (2016-2019)

17

Central Labs Service Provider Future Growth Areas Biomarker services offered by central lab service providers are predicted to see the most growth in customer demand over the next three years, with nearly one-quarter of those interviewed (28% Preclinical through Proof of Concept and 23% Phase IIB through Commercialization) mentioning this service. Research areas, such as immunology, hematology, and genomics will see noticeable growth as well. The services offered by the larger central lab service providers are numerous and broad. From the list below, which will see the most growth in demand from your company over the next three years? Please select all that apply. (n=114) Again, the services offered by the larger central lab service providers are numerous and broad. From the list below, which three (3) will see the most growth in demand from your company over the next three years? (n=114) Again, the services offered by the larger central lab service providers are numerous and broad. From the list below, which one (1) will see the most growth in demand from your company over the next three years? (n=114)

8%

9%

16%

18%

7%

7%

13%

17%

18%

18%

21%

33%

15%

29%

25%

43%

63%

57%

2%

3%

5%

8%

3%

5%

7%

9%

11%

10%

11%

23%

10%

18%

18%

36%

51%

49%

1%

1%

1%

2%

2%

2%

2%

2%

3%

4%

4%

5%

6%

7%

10%

23%

28%

0% 20% 40% 60% 80%

Anatomic Pathology/ Histology

Genomics - Viral load testing

Special Chemistry - coagulation, electrophoresis,nephelometry, liquid chromatography, toxicology

Specimen Management & Storage - short term storageneeds

Genomics - Virus genotyping

Auto Chemistry (high volume specimen testing)

Microbiology

Flow cytometry

Genomics - Gene expression, circulating free DNA

Circulating tumor cells

Genomics - Extraction of DNA and RNA from patientspecimens

Genomics - Genotyping laboratory

Genomics - Drug resistance

Hematology

Specimen Management & Storage - long term storage needs(biorepository)

Immunology

Biomarkers - Phase IIb through Commercialization

Biomarkers - Preclinical through Proof of Concept

% of Respondents

Top Service Top 3 Services Top 5 Services

© Industry Standard Research

S A M P L E P A G E :

FUTURE GROWTH AREASThe services offered by central lab service providers are numerous. ISR asked respondents to identify which services they predict to see the most growth in demand from their companies.

The full data are available in the report, which can be downloaded from www.ISRreports.com.

D A T A H A V E B E E N R A N D O M I Z E D . F U L L C H A R T A V A I L A B L E I N T H E R E P O R T .

Introduction

SMARTER QUESTIONS SMARTER ANSWERS

Industry Standard Research (ISR) is the premier, full service market research provider to the pharma and pharma services industries.  With over a decade of experience in the industry, ISR delivers an unmatched level of domain expertise.   For more information about our off-the-shelf intelligence and custom research offerings, please visit our Web site at www.ISRreports.com, email info@ISRreports.com, or follow us on twitter @ISRreports.

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LEVEL

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Manager 29%

C-level 13%

VP 10%

BYEXPERIENCE

IN YEARS

16-20 years 23%

11-15 years 24%

6-10 years 11%

3-5 years 5%

20+ years 37%

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TYPE

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Sponsor 78%

CRO 6%

ResearchSite 10%