How and why the CRO industry must adapt to survive a changing drug development universe

Funding and innovation in biotech

Having worked in life sciences since the 1980s and in the contract research organization industry for over 20 years I have seen a lot of changes in the CRO industry. Whilst these are often influenced by macroeconomic events, such as the stock market crash of 2008, there are also other trends which influence how work is outsourced that can have as large an impact.

Following the 2008 crash the CRO industry had to tighten its belt. Only the fittest survived to fight another day. Since then the levels of investment in life science companies has recovered significantly and the amount of money pumped into start-ups in recent years has surpassed pre-2008 levels (see chart below).

William Blair, Fall 2019 Survey, Oct 16, 2019

Start-ups and virtual companies often have limited experience and expertise in drug discovery and early development and usually limited lab capabilities. This puts the onus on the CRO to provide strategic scientific and regulatory expertise in drug discovery and development in addition to the scientific expertise that they have always offered. This strategic expertise might range from understanding how to de-risk a product from on or off target safety liabilities, or building a time and cost efficient screening program, to advising on what studies are required for a particular therapeutic product to ensure that they make the right program design decisions, clearly understand the implications of issues when they arise and can find alternative strategies quickly. Consequently, continuity of service is important and outsourcing in a piecemeal fashion is no longer the most productive approach to ensure a streamlined, robust strategy and the best overall project timelines. 

Logistical Support

In addition to the strategic scientific and regulatory support the virtual drug development model (whether applied by a super-lean start-up, a commercially minded academic or a biotech-like group within a large Pharma company), also means that logistical Project Management support is essential. This support can be provided by external consultants or from within the CRO, so long as the person has the right skillset, experience, and tools to track complex, multi-discipline projects effectively.

Technological advances

But, it’s not just the ongoing trend in which companies are outsourcing discovery and early stage development work that is in play today.  The rate of innovation in therapeutic approaches is startling. As products become more complex the approach of simply following a path trodden by those developing other drugs in the same class becomes less applicable and we often find ourselves in uncharted regulatory and development landscapes where pathways for developing products are undefined, products fall between different guidelines, and where guidelines are ambiguous or simply do not yet exist.

This complexity means that companies are not simply asking CROs for a quote for a set of studies. They also need help defining the best screening and/or regulatory strategy, choosing the correct studies,, and figuring out how all studies should be designed to comprise a cohesive strategy that addresses all of the key development objectives effectively and at the right time in the development cycle. Again, this requires excellent strategic vision by the CRO and a clear understanding of the scientific, regulatory and commercial landscape, as well as specific expertise tailored to the product and target which can be difficult to find in one individual.

Many large Pharma companies are shifting their emphasis to later development stages and outsourcing more non-clinical safety assessment, and increasingly discovery work to CROs. This is leading to a deepening of the partnership between CROs and large Pharma, as more scientific support is provided by the CRO where expertise and experience within large Pharma is reduced.

Where large Pharma are involved in the earlier development stages they are shifting their focus from traditional small molecules and biologics to newer therapeutic approaches such as gene and cell therapy. In some cases large Pharma are absorbing small biotechs who have developed advanced therapies. Other companies are looking to bring that development in-house and are therefore looking to partner with CROs who can provide the scientific and regulatory experience that the company lacks internally.

Summary

As the pharmaceutical industry continues to evolve with more and more early development being provided by virtual and small companies CROs are evolving to provide the strategic scientific and regulatory support that these companies sometimes lack. However, perhaps the most seismic change is being wrought by the pace of technological advancement which puts large, scientifically driven CROs at the forefront of technological innovation with strategic scientific expertise being an absolute requirement for the CRO industry to serve both their small and large clients.