A leap in the number of compounds entering Phase I development in recent years has created a bottleneck in clinical capacity that a newly-formed company – Roanoke Clinical Research – aims to capitalise on.

Roanoke Clinical has been set up by Carilion Biomedical Institute, a non-profit research incubator based in Roanoke, Virginia, USA. The new firm will serve both the pharma and biotech industries.

The new company “will supply needed Phase I clinical research services to an industry that faces aggressive drug development timelines and is currently facing capacity shortages,” said Daniel Barchi, CBI’s president and chief executive.

The CRO industry generates between $6 and $10 billion each year in revenues - up from approximately $1 billion just a decade ago - and an estimated 25% of this revenue is generated from early stage clinical work (Phase I/IIa studies), clinical laboratory and bioanalytical laboratory services, according to market research.

According to industry sources, in 2004, there were a third more compounds in Phase I testing than in 2000. This increase and the demand for early development services is being driven by efforts to improve the efficiency of research and development operations by quickly moving more candidates through the drug development pipeline and also by the improved funding environment for early-stage companies, according to Roanoke Clinical.

But the increase, while driving demand for early stage clinical testing, is causing backlogs in study scheduling of up to six months, so the company is expecting strong demand for its new capacity.

Roanoke Clinical could potentially begin enrolling subjects in six to nine months, and is currently securing additional funding and seeking appropriate real estate to locate the business.

Meantime, the firm is upbeat about the prospects for the CRO services market, pointing out that it historically posts high operating margins averaging at about 15%-20%.

“The market remains strong and is expected to continue to post impressive growth,” said Roanoke Clinical in a statement.