Taking On a New Competitive Landscape in Phase I

Medical discoveries, major investments from the private and public sectors, and growing markets for certain treatments have taken the engines of drug development from a purr to a roar. But like any healthy industry, a byproduct of boom times is intense competition. Some CROs have, to an extent, insulated themselves from this competition by focusing on niche markets based on specific therapeutic areas. But as recent challenges in early-phase research lead to new interactions among early-phase CROs, that may be changing. What are these new developments? What’s driving them, and what threats and opportunities do they present to both niche and non-niche CROs in this highly competitive era?

Collaborations, acquisitions, and a changing paradigm for CROs

The market research group Beroe analysis divides the Phase I CRO landscape into three groups: global players, emerging players, and niche players. However, Beroe predicts that, over the next several years, a flurry of acquisitions, collaborations, and expansions among these groups will cause the lines separating CROs into niches to become less defined.1 These activities may be related to an uptick in trial complexity that has taken hold in early-phase clinical research in recent years. Over 80% of respondents in a 2011 survey, all involved with Phase I research, noted that “early stage trials are increasingly complex, with patients now included more often.”2 Last year, a global CRO acquired a smaller niche player out of the belief that the resulting expansion of therapeutic expertise would “improve [the CRO’s] ability to manage increasingly complex trials.”

What implications could all this have for the ways CROs of all types and sizes compete with each other? For global and non-specialized CROs, acquisitions and collaborations can protect against the challenges arising from this evolution in Phase I trials. By seeking partnerships with niche companies, they can bolster their scientific capabilities and better manage these new complexities, making them more attractive to Sponsors. As for niche CROs, whose competitive refuge may be endangered as other companies encroach upon their therapeutic area, acquisitions and collaborations may pose a threat. These companies may find themselves up against much stronger competition as their competitors become more powerful through partnerships with CROs elsewhere in the industry. On the other hand, it could represent a chance to enter into collaborations that would expand their niches, making them stronger contenders for Sponsors’ business and narrowing the field of competitors through consolidation. This would mitigate a sharp increase in the number of CROs that took place over the first decade of the 21st Century. 3

Keeping a competitive edge

As Phase I trials become more complex and companies expand into new therapeutic areas, niche CROs have a choice: hold their own against the companies expanding into their areas, or embrace these changes to the competitive landscape and open themselves up to acquisitions and partnerships with global CROs and other players. But whether competing for Sponsor business or for partnerships with other companies, CROs will need to remain competitive among larger and more powerful research entities. How can they do this?

Few things in clinical research are valued more than speed and efficiency, and so the ideal game plan may be for CROs to do everything possible to bolster their ability to build studies quickly and affordably, maximize data integrity, and deliver results within their Sponsors’ timelines. Acquiring a cutting-edge electronic data capture (EDC) software can help achieve these goals. By now, EDC is a well-established industry. Still, a surprising number of researchers are still dependent on paper throughout their studies, lending an invaluable advantage to companies whose eClinical software offers tools like eSource and a cloud-based infrastructure to minimize paper usage and maximize efficiency.

If current predictions for the Phase I research services market come true, CRO specializations will become blurred through increased acquisitions and collaborations. Companies looking to expand into new therapeutic territory will likely look to partner with technologically-advanced niche companies that can offer great speed and efficiency. Existing niche companies would be wise to invest in gaining such capabilities, either to market themselves for partnerships or to defend against stronger competition. In any case, forward-thinking CROs that use modern and flexible EDC, as well as other advanced tools available today, may well be the ones that come out on top.

1 Ilancheran, Mathini; Phase I Clinical Supply Landscape: Trends, Demarcation and Security; Clinical Leader; 30 August 2016
2 Taylor, Nick; Big CROs losing out as complex trials favour Phase I specialists;; 12 September 2011
3 Andreu-Vieyra, Claudia; Five Traits to Look for When Choosing a CRO to Manage Your Oncology Trials; MedNet Solutions; 24 September 2014

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