July 1, 2006 (Vol. 26, No. 13)

Users Cite Benefits of Accelerated Development, Cost Cutting, and Reliable Expertise

According to a recent report from the Tufts Center for the Study of Drug Development (January/February 2006 CSDD Impact Report), drug companies that are high users of CROs tend to complete projects faster than those with low usage. Without loss of quality, projects involving more CRO usage (greater than 60% of total development budget) were submitted more than 30 days closer to the projected FDA submission date than low users (less than 40%). In 2004, CROs managed nearly 23,000 Phase I–IV studies at 152,000 clinical sites worldwide.

The Tufts study, the first to look at the overall impact of outsourcing on drug development performance and capacity, suggests that CRO business makes a vital contribution in terms of speed, cost containment, and advice to the pharma and biotech industries.

Whatever You Need

A CRO offers a wide variety of services ranging from preclinical studies and consultancy/advice to full clinical trials and regulatory support. Customers pick and choose the services they need. The business is highly competitive, and customers are looking for original products, services, and solutions.

The CRO market is also being driven by globalization of the industry and the increasing complexity of both clinical trials and regulatory demands. For many big pharmas, outsourcing clinical development is a sensible way of containing costs, while smaller companies need access to the expertise the CRO provides.

Faiz Kermani, Ph.D., European marketing manager, Chiltern International(www.chiltern.com), has written on the growth of the CRO business. “So many clinical trials are now international. Clients want to know that you can handle their work globally.”

Chiltern offers Phase I to Phase IV with customers across the U.S., Europe, and Asia. It has its own unit for Phase I work. Dr. Kermani points out that a company like Chiltern can act as an advisor, helping customers locate trials, especially for rare diseases where centers may be restricted. They may, for instance, start out by doing a feasibility study with the investigators for the trial’s sponsors.

In recent years, many more biotech-derived compounds are coming through, some of which may have been licensed-in by pharmas who then want advice from CROs on regulatory requirements. Similarly, there is a trend toward trials of compounds in new formulations, observes Dr. Kermani. “The CRO can play whatever role you want in drug development. They may be asked to do some tasks but not othersfor instance, clinical but not regulatory. However, there is a trend to go for the whole package as long as the customer can be convinced on the cost. For big companies, global trials are expensive, and small companies may be forced to outsource because they just don’t have the resources.”

Partnership or Fee For Service?

As far as the relationship with the customer is concerned, Dr. Kermani thinks that this is evolving into more of a partnership rather than a purely fee-for-service arrangement.

“India is becoming important and people are talking about China. There is a lot of emphasis on the emerging economies. But we need to be very aware of ethics and economic issues so it does not look as if we are trying to exploit people. Drug development is becoming increasingly global and we have to show we are capable of handling this trend.”

Charles River Laboratories (www.criver.com) is a major player in animal models, preclinical, and Phase I. “Our philosophy is to provide solutions for our customers. Each one is different, and we adopt a multidisciplinary approach, bringing to the table whatever tools are needed be it research models, GLP, consultancy, softwarein order to solve their problem,” explains Alan Johnston, head of client and regulatory services.

Over recent years, the role of the large CRO as an advisor has become more significant, especially for small biotechs and virtual companiesclients Charles River is happy to work with. “We’re not just interested in big pharma,” says Johnston.

Meanwhile, pharma companies are doing more outsourcing of preclinical and clinical research, mainly because of increased regulatory requirements for data and analysis.

“The strategic manager in a drug company might not like it, but they will recognize that it is cheaper and more effective to have this work done outside, while maintaining sufficient expertise in-house to monitor it,” says Johnston.

For instance, Charles River has specialist labs for long-term toxicology studiesan expense which even a large company could not justify. It plans to open the first phase (256,000 square feet) of what it says will become one of the world’s biggest preclinical facilities (400,000 square feet, up to 800 employees) in Shrewsbury, MA in January 2007. This is part of the company’s long-term plan to establish several such facilities worldwide.

Charles River has a strictly fee-for-service relationship with clients. “We like to develop a close relationship with customers but never take a financial interest in a product because it is really important to maintain our independence. We work with all the major companies, so if we had some kind of stake in one, it would affect the way we were perceived,” explains Johnston.

BioDynamics (www.biodynamics.com) is a GMP- and GLP-accredited CRO specializing in preclinical bioanalysis, metabolism, and radiotracer studies working mainly in the late-phase research to the proof-of-concept stage of drug development. According to Stephen Lewinton, managing director, there is increasing emphasis on doing ADMET studies at an earlier stage. The company has adopted various new technologies to this end, such as dermal-penetration models and in vitro time-dependent inhibition, which is a way of exploring how drugs bind to the CYP450 drug-metabolizing enzymes in the liver.

“We are finding that a growing number of companies are using CROs more strategically. They are realizing that they need help and are making more active decisions to work long-term with a CROfor instance, they may want an ADMET partner,” says Lewinton. This earlier search for a partner gives the CRO more opportunity to make valuable input into a project.

Much of Biodynamics’ work is done on a fee-for-service basis, although they have some partnerships. There is a lot of repeat business, as well as an increasing number of small and medium companies requiring their services. Lewinton agrees that the business is becoming increasingly competitive but says that Biodynamics’ combination of in vivo and in vitro services with metabolism and radiosynthesis is particularly beneficial to customers. “They increasingly want a package of services and a more collaborative approach.”

Meanwhile, SGS Life Sciences Services (www.sgs.com) is part of a global contract services organization that covers many different business sectors. SGS covers Phase I to Phase IV, offering clinical trials services, biostatistics management, and regulatory support. They supply a wide range of lab services also, such as bioanalytical and stability testing.

Aptuit (www.aptuit.com) specializes in drug development services and consultancy. It was launched by a group of industry experts and recently acquired the Quintiles (www.quintiles.com) early development and packaging business units, Almedica International and InfoPro Solutions, and now has more than 250 pharma and biotech clients worldwide.

The company offers a range of preclinical services along with manufacturing and supply of clinical trial materials. It also offers a seamless IT system allowing fully client-accessible project management and test data. Its most recent acquisition, Pharma Consulting, coincides with the setting up of Aptuit Consulting, which gives clients access to advice from experienced industry professionals in the IND chemistry and biology to proof-of-concept space. This service could be particularly appropriate for the smaller biotech that may lack the necessary in-house expertise.

Eurogentec (www.eurogentec.com) has been providing technology transfer, process development, and GMP-manufacturing services on a contract basis for over ten years. The biologics business unit of Eurogentec is specialized in the production of biopharmaceuticals in E. coli, Pichia pastoris, and other microbial systems. Over 270 batches of both clinical- and commercial-scale proteins, plasmid DNA, and bacterial vaccines have been provided to pharma, diagnostic, and biotech customers. These customers tend to come either with a process that is ready for GMP, or with one that needs a great deal of research and development (consisting, perhaps, of just an expression system).

The Key to a Successful Partnership

According to Philippe Cronet, Ph.D., director of the biologics business unit at Eurogentec, the biotech industry has become more mature over the last decade. “People now expect a broader range of servicesincluding, for instance, advice on regulatory affairsand Eurogentec is consolidating as a one-stop shop.” Eurogentec prefers to work on a fee-for-service basis rather than partnering in drug discovery. However, the company does aim to establish long-term relationships with clients, based upon recurrent manufacturing projects.

A key element to a successful partnership is to assign a dedicated project manager for the duration of each project. “We also put a lot of emphasis upon flexibility because projects involve more than high-quality manufacturing, and the unexpected can happen any time. We need to adapt ourselves and react rapidly to unforeseen or newly arising needs.”

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