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CROs should be more mindful of their smaller emerging biopharma clients and pay more attention to handling their needs.
Early this month, I presented on the topic “Why Aren’t Lessons Learned from Big Pharma/Big CROs Translating to Smaller Biopharma Relationships?” For years,
Applied Clinical Trials
has been the operational resource for clinical trials for sponsors, CROs, and academia. The transition of the contract research industry from a small cottage to a fully-matured one has seen numerous outsourcing models from the low-touch, very focused and accountable transactional service, to the high-touch, highly involved and complex strategic partnership. Another example has featured CROs taking on internal departments from pharma companies to ensure employees still had jobs, as well as the knowledge transfer relative to that pharma’s specific development needs and culture.
It may seem that by this point, sponsors of all shapes and sizes would know how to respond to the challenges relative to working with an outsourcer, no matter what type of relationship is involved. But in discussions I have with smaller biopharma, that does not seem to be the case. Why should CROs be concerned about their service offerings for these emerging players? Because they are not an insignificant part of the drug development landscape.
Consider the following:
The days of quickly selling a promising compound early on to a large pharma company or launching a full-fledged IPO are dwindling. An Ernst & Young report showed 75 biotech IPOs in 2014 compared to nine in the second half of 2016. These days, innovation hubs in major regions of the country are home to a vast number of companies looking to enter clinical trials, take their compound at least through Phase II, and some are fully intending to stick it through Phase III and even make it to a commercial stage company.
This is all evidence that these emerging biopharma are CROs’ latest boom of customers. But, as the new crop of uninitiated companies, they are having similar angst with their CRO. They feel unimportant to large CROs, costs get away quickly, oversight is difficult, projects don’t come in on time or budget…the same list that we’ve seen with outsourcing relationships over the years. The problem is that emerging biopharma companies face constraints that the large, traditional pharma never have. A single clinical trial could be the only thing the company has; basically, its whole survival. They are more financially-constrained and may either make poor decisions or cut corners, not to mention taking advice from new executives or external stakeholders that deviate from the original plan, which then results in out-of-scope charges or change orders.
The future of drug development does not lightly rest on an outsourced expert, it almost solely exists in their confines. It wouldn’t be a stretch to ask CROs to be more mindful of their smaller clients and take extra attention in handling their needs.