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European Pharmaceutical Contractor
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It has been estimated that outsourcing pharmaceutical R&D represents approximately 30 per cent of the US$50 billion spent in the period between 2000 and 2001, with the proportion in some areas (such as toxicology) amounting to over 50 per cent. The growth in turnover by leading contract research organisations (CROs) has been around 120 per cent in recent years, while the R&D expenditure of the leading pharmaceutical companies grew by just 14 per cent in the same period. These figures substantiate the growing importance of outsourcing as a strategic option and suggest that more and more companies are using outsourcing in an effort to accelerate the discovery process, control development costs, exploit profitable niche markets and minimise time-to-market.
One of the strategies to arise in recent years is that of the virtual company. Such companies are based around a core of project managers and a highly outsourced model of operation, with the main professed advantages being increased flexibility and reduced exposure to infrastructure costs. The argument goes that in a project with variable demands for multiple resources, one should outsource to the peak level of demand and insource to the trough.
The origins of these major changes lie in the huge pressures that have built up in the industry. Increasing regulatory demands; pressures on pricing and reimbursement; decreasing effective patent life; and increasingly difficult therapeutic areas of investigation have been facts of life for many years now. In addition, and perhaps as a result of these pressures, mergers, acquisitions and other corporate realignments have brought organisational instability to large companies, and their pre-eminence as centres for innovative research has been challenged. The effective barriers for entry into the pharmaceutical R&D pool have been broken down by the acceptance of start-up academic companies as incubators of new technology.
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By Dr David Cavalla, CEO of Arachnova Ltd
Following his studies at the University of Cambridge, UK, and postdoctoral research in Washington, US, David Cavalla joined Glaxo Group Research where he worked on the medicinal chemistry projects that led to the marketed drugs Zofran and Imigran. Subsequently, as Head of BioScience at Napp Research Centre, he initiated the PDE4 inhibitor project and directed a research strategy for asthma. This work, from discovery to clinic, was the first example of a successful research project carried out using a virtual strategy and was completed with the use of external resources co-ordinated by a small team of multidisciplinary project managers.
David is the Author of Modern Strategy for Preclinical R&D - Towards the Virtual Research Company, and is Chairman of the UK Society for Medicines Research.
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C21 BioVentures
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C21 BioVentures™(C21) is the leading conference where early stage innovators, investors and pharma partners come together to do the deals that will make 2010 the year of global partnering. C21 features private company presentations, pre-scheduled face-to-face partnering meetings, expert panels, workshops and three days of networking opportunities at an intimate world-class resort and spa.
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