Revenues for US contract research organisations (CROs) are set to soar from a total of $11.43 billion last year to $20.09 billion in 2017, forecasts a new report.
While the economic downturn took a toll on most markets in 2009, during that year the US CRO sector bucked the trend, growing 8.5%, says the study, which is published by Frost & Sullivan. The slowdown in funding for early-stage projects has undoubtedly dampened the market's prospects for the next three to four years, but this lack of funding has also restricted companies from investing in in-house clinical trials, creating opportunities for CROs, it suggests.
Market participants are optimistic about continued growth due to the interest shown by new sponsors, especially biotechnology and specialty pharmaceutical companies that are demanding full services, from the pre-clinical to post-commercialisation stages, says F&S, and it suggests that this spurt in demand and strategic partnerships with CROs could be mainly attributable to the sponsors' limited development infrastructure.
"The sponsor-CRO relationship has historically been heavily transaction-based. However, in the past few years, companies have been making a gradual shift to strategic alliances that are built on a long-term view of outsourcing rather than transactions," the study points out.
Traditionally, start-up pharmaceutical and biotechnology companies have out-licensed their products after Phase I/II of acquisition, thus raising a question mark over the future of these projects, but this trend is slowly phasing out as companies increasingly retain products within their pipelines and take them closer to the market through CROs, thereby increasing the value of the products and the company, it says.
F&S also forecasts that the enhanced profile of CROs in recent times will likely improve the market's penetration rates significantly. While the organisations have been in existence for more than two decades, the penetration rate of outsourcing currently accounts for less than 25% of total R&D spending, so there is great potential for CROs to grow through just expansion, it says.
Meantime, as clinical trials become ever-increasingly complex and global, the competition for access to patients, new investigators and fresh studies is heating up. The gap between patient access and trials has been rising consistently over the past decade and could affect future projects, while for trials that depend heavily on emerging markets, this gap could lower productivity by lengthening the time for each trial, the report warns.
Moreover, this gap is being widened further by an "underlying churn" among existing investigators, but CROs and sponsors are grappling with this situation and exploring new ways to increase access to patients, including partnering with patient recruitment firms.
"Service providers are also outsourcing large-scale global trials through the expanded reach of CRO partners, which enables access to an extensive patient pool," the study adds.