Specialist
Former executive at Pharmaceutical Product Development Inc (PPD)
Agenda
- CRO (contract research organisation) market trends and themes
- Competitive landscape across the CRO industry – Iqvia (NYSE: IQV), PPD (NASDAQ: PPD), Covance (NYSE: LH), Charles River Laboratories (NYSE: CRL)
- Contracting models in the CRO industry – product-based services vs outcome-based models
- CRO focus on patient centricity and DCTs (decentralised clinical trials)
- 12-18-month growth outlook for the CRO industry
Questions
1.
What recent developments and shifts within the CRO [contract research organisation] industry are worth highlighting?
2.
What is the impact of the recent inflation and high labour cost pressures on the CRO industry?
3.
Sources estimate that the biotech and pharma companies outsourcing services market size will be more than USD 90bn by 2028. How would you assess the demand for outsourced pharma currently, and what percentage of companies are outsourcing their services vs maintaining in-house capabilities?
4.
Small- to mid-cap biotechs are facing great losses, with 80% of them trading below their IPO price. How might this biotech funding slowdown put a dent in raising additional equity, and thus, crimp CRO demand and potentially disrupt revenue?
5.
There has been much M&A across the CRO industry, with recent acquisitions such as Charles River-Explora Labs, Labcorp with Covance and Thermo Fisher with PPD. How do you expect the M&A and consolidation trend to grow within this industry, and what are the potential synergies? What are the most attractive services within the CRO industry at this point?
6.
What else besides Syneos’ leadership team could be attractive about it for anyone to acquire?
7.
What type of services are most attractive and profitable within the CRO industry at the moment? Would it be contract research division between clinical and preclinical, contract development or manufacturing?
8.
What is the competitive positioning of players such as Iqvia, PPD, Syneos, Charles River and Medpace – whose stock has taken a beating – in terms of market share, service offerings and pricing?
9.
Covance focuses on preclinical and clinical, Charles River on preclinical and manufacturing and Iqvia happens to be a full-service provider. How much of a benefit is it to be a full-service provider, one-stop shop such as Iqvia vs a single-service provider such as Covance? Do you think it’s better for CROs to focus on one product or multiple products together?
10.
A CRO’s main focus is to reach the entire customer segment in a more holistic fashion, the trend starting with Quintiles. How would you assess players such as Iqvia and PPD, and their efforts to reach the customer? Which one has been the most successful in doing so, in your opinion?
11.
There are quite a few small companies which are small today but not too far behind, such as Science 37 and Lightship. How are the major CRO companies competing with these smaller companies, and how much of a threat could they be?
12.
Could you speak to the traction of niche and PE-backed CROs within the industry? What niche approaches are these CROs focused on, and how quickly do you expect them to grow?
13.
How strong do you think the larger CROs’ pricing power is, and do you think they can pass through cost and wage increases as easily as they would have you believe? Will we finally witness the disappearance of small- and medium-sized CROs, as they cannot invest as much money into new technologies and further advancements?
14.
How are contracting models trending within the CRO industry, specifically the move towards the outcome-based model from the traditional model? How fast is this shift occurring?
15.
How will the shift in contracting models change market dynamics, specifically with how services are bought and sold by different customers?
16.
You mentioned the pandemic has been a large catalyst with DCTs [decentralised control trials]. How have these been trending within the CROs? Would you be able to speak to the development of DCTs? Which companies have had the highest growth potential with DCT trials, and why?
17.
What is the expected growth for the CRO industry within the US and EU respectively, and how would you assess international players such as Wuxi’s competitive positioning vs large North America-based CROs we’ve discussed?
18.
How is the CRO industry advancing into the C> [cell and gene therapy] market, and how quickly? How do you see this playing out?
19.
What major hurdles are CROs facing at the moment, regulatory environment being one, and how is the regulatory environment changing within the CRO industry in the US?
20.
What is your 12-18-month outlook for the CRO industry? What are you most excited for, and what should we be looking out for?
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