October 1, 2013 (Vol. 33, No. 17)

Contract research organizations (CROs) have developed into a burgeoning support industry for pharmaceutical companies and biotechs since they gained a foothold in the late 1980s and into the 1990s.

Now, CROs represent a multibillion dollar industry and make up a large portion of the R&D budgets of many large drug manufacturers.

Navigating the variety of different CROs can be challenging. A manager looking to outsource scientific labor to a CRO needs to consider the expertise that the CRO can bring to the table. He or she must understand the needs of the company’s project when trying to figure out how much scientific input will be required from the CRO. Also, what type of CRO should be engaged?

“As a CRO working in the rapidly evolving field of highly multiplexed mass spec-based protein biomarker discovery and validation, MRM Proteomics’ sponsors look to us for guidance on experimental design or for advice on data quality control and analysis needs for the identification of protein signatures,” says Andrew Munk, Ph.D., president and CEO of MRM Proteomics.

According to Dr. Munk, sponsors used to view CROs as simply an outsourced solutions provider.

“Our philosophy has been focused on building long-term two-way partnerships with our sponsors where information is openly exchanged,” he explains. “We have found that through this process our sponsors do indeed realize that our teams care and are invested in our sponsor’s drug or diagnostic development programs.”

Timothy Galitski, Ph.D., head of science and technology at EMD Millipore, maintains that CRO clients need pipeline decisions of greater quality and celerity. “In the absence of scientific input to these decisions, all that’s left for a CRO to offer is low cost and reliability, a minimal value proposition. There’s an opportunity for those who can get their customers closer to what they need and value most,” he said.

Peter Sausen, Ph.D., vp of global safety assessment at Covance, sees his company’s ability to help clients solve problems in a timely manner as vital to its success.

“When science happens and issues arise, I can pull five to seven Ph.D.s together in a conference room—literally in 15 to 30 minutes—and we can sit at a whiteboard and figure out what’s going on with the client on the phone,” explains Dr. Sausen. “When you talk about being in partnerships with biotechs, we are the thought partners, and the level of thought partnership depends on what the client needs.”

Models of Service

Another issue biotech companies have to seriously consider is what kinds of CRO partnering models are available and which might best suit their needs. For example, should a biotech be working with a full-service CRO, or should they be working with a niche CRO?

“The answer depends on what they’re looking for,” says Dave Serota, Ph.D., senior vp of drug safety and discovery, and senior principal study director of MPI Research. “MPI Research is clearly an example of one-stop shopping which, from a logistical point of view, we think is attractive to our customers.”

Dr. Serota also mentions the difficulty of narrowing down partnership models in concrete terms, “A lot of what happens in the CRO industry is based on relationships and ‘whom you know’ and ‘whom have you worked with in the past.’ Everything falls back to your comfort level. Whom are you comfortable with doing the work that’s going to make or break your company down the road in terms of their ability to do quality work and first-rate science and to meet on-time reporting. I don’t think one size fits all.”

Dr. Sausen envisions three distinct partnership structures that CROs can assess.

“In terms of biotech support, it largely varies depending on what the client needs. The first type client I’ll call the ‘virtual biotech.’ They have little or no infrastructure.”

Dr. Sausen goes on to describe one client who was able to take a compound he synthesized in his home and recruited Covance to assist in the development of preclinical testing. “We helped him design his preclinical program to support the compound. We were successful in providing regulatory drug development support.

“These virtual guys don’t have to build the bricks and mortar. You can have a relatively small infrastructure and tap into a full-service CRO like Covance and get your product where it needs to go.”

Dr. Sausen described the next category as the “emerging biotech,” with 50–100 employees.

“These folks come into the business with a strong academic or scientific background,” he explains. “They may have some brick and mortars or some leased space, or small labs for pharmacology and wet lab experiments. Many times [they] are lacking in development experience so they come to us for help to design their nonclinical program.”

Sometimes Covance goes with these clients to the FDA for a pre-IND meeting. “Many times we’ll write their INDs…to get the molecule on its way,” continues Dr. Sausen.

Next on Dr. Sausen’s list were the large biopharma, having a 500-1,000 employee base.

“These companies usually have expertise across the board. They come to us from the perspective of both being a soft partner and a work partner,” he points out. “What I mean by a soft partner is that we’re really an extension of their minds relative to what we can offer them to help them move their molecules into the clinic.”

In this situation, the large biopharma has a good idea as to what kinds of experiments need to be run. In a work partner model, the CRO is tasked with actually performing the experiments.

“So when a biotech company asks Which CRO should I go to?, they have to ask themselves: Do we need scientific breadth and depth? The ability to move into the clinic? Or to work in the pharmacology space?”

CROs are landing more business as pressure grows to complete toxicology studies accurately, quickly, and economically while adhering to FDA and international regulatory requirements. [MPI Research]

Simple Dichotomy

Jeremy Minshull, Ph.D., CEO of DNA 2.0, compresses this continuum of service levels into a simple dichotomy.

“At one extreme, a CRO is more like the CMO. Instead of carrying out research, they’re really doing more manufacturing,” he explains. In that model, the CRO simply does exactly what the client tells them to do. That is a relatively low-value proposition for the CRO. And I think it’s less valuable for the clients because there is a sort of gap between data generation and data analysis.”

Dr. Minshull maintains that it’s critical to have people who know what they’re doing actually conducting the experiment. “Sometimes there will be things that may not seem important at first but are actually vital to the execution of the experiment,” he points out. “Unless you’re reasonably experienced you won’t necessarily know that.”

At the other end, continues Dr. Minshull, is where the CRO does all the thinking. “The client gives specifications, and the CRO provides them with exactly the functionality that they’ve asked for. This tends to be very expensive.”

Part of that cost is driven by the fact that the CRO is redeveloping capabilities that the client already possesses, he explains.

“DNA 2.0 takes the middle ground. We apply our expertise, and we know how to evaluate scientific experiments,” he says. “But we don’t want to replicate capabilities. We are more likely to succeed than the simple ‘follow my instructions’ model.”

Different CROs also can come in a variety of sizes, some filling small but crucial niches with a workforce of 10–20 employees and others operating with thousands of workers. What are the advantages and disadvantages of small versus large CROs?

“In general, small CROs are more willing and able to change with the market and can develop new technologies more rapidly,” claims Jack Vanden Heuvel, Ph.D., CSO of Indigo Biosciences. “However, large CROs have the distinct advantage of being able to offer an integrated set of services and products. This soup-to-nuts CRO is more likely to garner the larger projects as the biotech company can have the majority of its research performed with one provider.”

Dr. Vanden Heuvel’s sentiment is echoed by Florent Hediard, life science services marketing director at SGS Vitrology.

“Working with a small CRO has the advantage of having a real expert available with a dedicated and supportive team during the process at an affordable cost, but with a very limited service offer and geographic scope,” notes Hediard.

“A large CRO can bring the full-package service offer and the financial investment in its own infrastructure to support the operation under contract.”

Overall, companies looking to outsource work can find a variety of service levels and expectations. Certain CROs are willing to perform the majority of the footwork on experimentation, while others are more apt to provide technical assistance and expertise with respect to moving through regulatory challenges.

The key aspect, as told by almost every interviewed CRO, is to build relationships and trust on both ends of the contract to assure the highest-quality work.

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