Cost containment and regulatory pressures within the pharma industry are driving R&D outsourcing across the globe. Clinical obstacles to approval have become more significant due to the growing availability of existing generic treatments, and the trend to adopt Health Economics Outcomes Research (HEOR) assessments is increasing the complexity of clinical research. As a result, the scope of the CRO industry is expanding, and the global market is predicted to value $35bn by 2013.
’The Top 10 Contract Research Organizations’ is a report published by Business Insights that examines the competitive landscape of the global CRO industry. The latest key issues and evolving business models in the CRO market are identified and the leading companies in this sector are profiled in detail. For each of the top 10 CRO companies, this report provides a detailed examination of financial performance by business segment and growth strategies in the form of key acquisitions and divestments. The opportunities and threats facing each of these leading players are also assessed. This report also examines the size and growth of the global CRO industry, with analysis of major market drivers and trends in CRO destinations.
Key Findings
The global CRO industry valued $18bn in 2008, an increase of 14% over 2007. The CRO market will grow at an annual rate of 14% over the 2009–13 period.
Quintiles leads the global CRO market having accrued a market share of 16.9% in 2007, equivalent to sales of $2.7bn. There are over 1,100 players in the industry, and the top 10 players only accounted for 56.1% of the global market in 2007.
The fragmented structure of the CRO industry has led to an increase in strategic alliances, acquisitions, joint-ventures and other partnership deals as companies attempt to expand their service offerings and geographical presence.
Covance is the second largest global CRO, having registered revenues of $1.5bn 2007, representing a market share of 9.7%. Covance is building global capabilities, with many clinical trials now being conducted in emerging markets.
Biomarkers have the potential to become an integral part of clinical research, after the FDA recommended their usage throughout clinical trials to demonstrate desired clinical activity and safety.
Use this report to...
• Compare the performances of the top 10 CRO companies across key business segments with this report’s analysis of Quintiles, Covance, Pharmal Product
Development, Charles River Labs, ICON, Parexel, MDS, Kendle, PharmaNet
Development and PRA International
• Identify the market dynamics of the global CRO industry over the 2007-08 period, discover which emerging markets are becoming the CRO destinations of the future and understand the latest industrial trends across the UK, Japan, France, Germany,
Italy, Spain and the US.
• Assess the future prospects of the top 10 CRO companies with this report’s analysis of each firm’s strengths, weaknesses, opportunities and threats, in addition to an examination of growth strategies via acquisitions and divestments.
• Measure the progress of other leading CRO companies by evaluating the financial performances of Aptuit, Life Sciences Research, Omnicare, SGS, CMIC, WuXi
Pharmatech, Galapagos (Biofocus), LAB Research, United BioSource and Bio-Imaging.
Explore issues including...
Industrial consolidation. Globalization and the need to provide a wider breadth of services to meet customer needs across the drug development process is driving consolidation.
Budget pressures for biopharma. The economic slowdown has limited the availability of funds for ’risky’ businesses such as biotechnology. This has led to many projects being suspended.
Consolidation in client industry. Consolidation in the pharma industry has led
to the creation of larger entities with better bargaining power. This is beginning to impact upon contract payment terms.
Demand for CRO services. Regulatory pressures are creating a need for larger trials
and increasing development timelines. Regulatory delays and phase IV monitoring requirements are also fuelling demand for CRO services.
Influx of private equity players. A number of factors are driving the participation of private equity players, including the nature of the service-based business model and recent shifts in the CRO industry led by globalization and the demand for full-service offerings.
Discover...
• Which countries are attracting offshore investment?
• What are the trends in the global CRO industry?
• Who are the top 20 players in the industry?
• What is the market share of each of the global leaders by company?
• What are the drivers and resistors of growth in the CRO industry ?
• How is consolidation expected to change the dynamics of the industry?
• What are the key strategies of the leading CRO companies?
• What are the strengths and weaknesses of the industry’s top players?
• Which phases of clinical research are driving the industry?
Industry overview 14
Quintiles 15
Covance 15
Pharmaceutical Product Development (PPD) 16
Charles River Laboratories (CRL) 16
ICON Clinical (ICON) 17
Parexel 17
MDS 18
Kendle 18
PharmaNet Development (PharmaNet) 19
PRA International 19
Chapter 1 Introduction 22
What is this report about? 22
Methodology 22
Chapter 2 Industry overview 24
Summary 24
Introduction 25
Market overview 25
Global CRO market: size and growth 25
Global positioning of the top 10 CROs 26
Key market drivers 29
Key market resistors 30
Business models 31
Full-services CROs 31
Niche CROs 31
Trends in the global CRO industry 32
Consolidation in the CRO industry 32
Evolution of software as a service (SaaS) based electronic data capture (EDC) 35
Implementation of biomarkers in clinical trials 36
Participation of private equity players 38
New CRO destinations 39
Asia-Pacific 39
India 39
China 40
Latin America 42
Eastern Europe 42
Africa 43
Chapter 3 Quintiles 46
Summary 46
Company overview 47
Recent financial performance 48
Growth strategies 48
Investing in infrastructure 48
Expansion of consulting business 50
Acquisitions and divestments 50
SWOT analysis 51
Strengths 52
Depth in service offerings 52
Strong presence in emerging economies 52
Weaknesses 53
Exposure in limited therapeutic areas 53
Opportunities 53
Launch of interactive data analysis tool 53
New facility in India 53
Expansion in Japan 53
Threats 54
Stringent regulations 54
Increasing competition 55
Chapter 4 Covance 58
Summary 58
Company overview 59
Recent financial performance 59
Performance by business segment 61
Growth strategies 61
Attaining operational efficiency through six sigma implementation 61
Develop capabilities in emerging markets 62
Acquisitions and divestments 62
SWOT analysis 63
Strengths 63
Global capabilities 63
Stronger therapeutic base 64
Strong liquidity position 64
Weaknesses 64
Declining performance in late-stage segment 64
Opportunities 65
Expanding facilities in mature pharmaceutical markets 65
R&D collaboration with Eli Lilly 65
Threats 66
Weakening early-stage development segment 66
Regulatory compliance 66
Chapter 5 Pharmaceutical Product Development 68
Summary 68
Company overview 69
Recent financial performance 69
Performance by business segment 70
Growth strategies 71
Collaboration for development of innovative compounds 71
Expansion in central laboratory services 71
Acquisitions and divestments 72
SWOT analysis 73
Strengths 74
Depth in phase II–IV service offering 74
Strong financial performance 74
Weaknesses 74
Declining revenue contribution from PPD’s discovery segment 74
Opportunities 75
Investment in technologies 75
Geographical expansion 75
Outsourcing deal with Merck 76
Threats 76
Dependence on a small number of industries and clients 76
Chapter 6 Charles River Laboratories 78
Summary 78
Company overview 79
Recent financial performance 79
Performance by business segment 80
Growth strategies 81
Building capabilities for clients 81
Acquisitions and divestments 81
SWOT analysis 82
Strengths 83
Strong technology platforms for pre-clinical testing 83
Weaknesses 83
Higher debt burden 83
Opportunities 84
Expansion in China 84
Threats 84
Cost cutting in biopharmaceutical industry 84
Chapter 7 ICON 86
Summary 86
Company overview 87
Recent financial performance 87
Performance by business segments 88
Growth strategies 88
Developing global capabilities and reach 88
Acquisitions and divestments 89
SWOT analysis 90
Strengths 90
Strong presence in oncology solutions 90
Technically enhanced service offerings 91
Unconventional service model 91
Weaknesses 92
Rising debt load 92
Opportunities 92
Expansion in India 92
Agreement with Phase Forward 92
Threats 93
Government regulations 93
Softness in non-Critical Path studies 93
Chapter 8 Parexel 96
Summary 96
Company overview 97
Recent financial performance 97
Performance by business segments 98
Growth strategies 99
Expansion in emerging markets 99
Acquisitions and divestments 100
SWOT analysis 101
Strengths 101
Strong global presence 101
Stronger therapeutic presence 102
Weaknesses 102
Increased receivable turnover period 102
Opportunities 102
Expansion in early-phase service offerings 102
Threats 103
Consolidation in the industry 103
Declining R&D spending growth 103
Chapter 9 MDS 106
Summary 106
Company overview 107
Recent financial performance 107
Performance by business segment 109
Growth strategies 109
Internal restructuring 109
Investment in infrastructure across geographies 110
Acquisitions and divestments 110
SWOT analysis 111
Strengths 111
Robust performance of late-stage contract research services 111
Weaknesses 112
Limited therapeutic focus 112
Opportunities 112
Investment in technology 112
Expansion in Asian markets 113
Threats 113
Regulatory review 113
Chapter 10 Kendle 116
Summary 116
Company overview 117
Recent financial performance 117
Performance by business segment 119
Growth strategies 119
Participation in mega-trials 119
Acquisitions and divestments 120
SWOT analysis 121
Strengths 121
Strong presence in phase I–IV clinical services 121
Growth in operating profit 122
Broader therapeutic exposure 122
Weaknesses 123
Rising debt burden 123
Opportunities 123
Growth in the early-stage research segment 123
Expansion in Asia-Pacific 124
Threats 124
Highly competitive environment 124
Chapter 11 PharmaNet 126
Summary 126
Company overview 127
Recent financial performance 127
Performance by business segments 129
Growth strategies 129
Global expansion of capacity 129
Early-stage expansion 129
Late-stage expansion 130
Investment in technology 130
Acquisitions and divestments 130
SWOT analysis 131
Strengths 131
Extensive services spectrum 131
Diverse client base across geographies 132
Weaknesses 133
Late-stage project cancellations 133
Opportunities 133
Investing in laboratory capabilities to analyze complex molecules 133
Threats 133
Legal proceedings 133
Refinancing convertible debt 134
Government regulations 134
Chapter 12 PRA International 136
Summary 136
Company overview 137
Recent financial performance 137
Growth strategies 138
Capacity expansion across geographies 138
Increased prominence in oncology 139
Acquisitions and divestments 139
SWOT analysis 140
Strengths 140
Services portfolio 140
Weaknesses 141
Limited therapeutic expertise 141
Lower sales growth during 2004–07 141
Opportunities 141
Collaboration with Frontage Laboratories 141
Growing opportunities in India 142
Threats 142
Intense competition 142
Regulatory compliance 143
Chapter 13 Other key players 146
Aptuit 146
Company overview 146
Recent financial performance 146
Life Sciences Research 147
Company overview 147
Recent financial performance 147
Omnicare 149
Company overview 149
Recent financial performance 149
SGS 151
Company overview 151
Recent financial performance 151
CMIC 153
Company overview 153
Recent financial performance 153
WuXi Pharmatech 155
Company overview 155
Recent financial performance 155
Galapagos (BioFocus) 157
Company overview 157
Recent financial performance 157
LAB Research 159
Company overview 159
Recent financial performance 159
United BioSource 161
Company overview 161
Recent financial performance 161
Bio-Imaging 162
Company overview 162
Recent financial performance 162
Chapter 14 Appendix 166
Glossary 166
Index 168
List of Figures
Figure 2.1: Global CRO market size ($bn), 2008–13 26
Figure 2.2: Top 10 CRO companies market share (%), 2007 27
Figure 2.3: Market position of the global top 10 CROs, 2007 28
Figure 2.4: Comparative analysis of leading CRO companies 29
Figure 2.5: Comparison between India and China CROs 41
Figure 3.6: Quintiles SWOT analysis 51
Figure 4.7: Covance financial performance ($m), 2003–07 60
Figure 4.8: Covance SWOT analysis 63
Figure 5.9: PPD financial performance ($m), 2003–07 70
Figure 5.10: PPD SWOT analysis 73
Figure 6.11: CRL financial performance ($m), 2004–07 80
Figure 6.12: CRL SWOT analysis 82
Figure 7.13: ICON SWOT analysis 90
Figure 8.14: Parexel financial performance ($m), 2004–08 98
Figure 8.15: Parexel SWOT analysis 101
Figure 9.16: MDS financial performance ($m), 2005–07 108
Figure 9.17: MDS SWOT analysis 111
Figure 10.18: Kendle financial performance ($m), 2003–07 118
Figure 10.19: Kendle SWOT analysis 121
Figure 11.20: PharmaNet financial performance ($m), 2004–07 128
Figure 11.21: PharmaNet SWOT analysis 131
Figure 12.22: PRA International financial performance ($m), 2003–07 138
Figure 12.23: PRA International SWOT analysis 140
Figure 13.24: LSR financial performance ($m), 2003–07 148
Figure 13.25: Omnicare financial performance ($m), 2003–07 150
Figure 13.26: SGS financial performance ($m), 2003–07 152
Figure 13.27: CMIC financial performance ($m), 2005–08 154
Figure 13.28: WuXi Pharmatech financial performance ($m), 2003–07 156
Figure 13.29: BioFocus financial performance ($m), 2005–07 158
Figure 13.30: Lab Research financial performance ($m), 2005–07 160
Figure 13.31: Bio-Imaging financial performance ($m), 2003–07 163
List of Tables
Table 2.1: Global CRO market size ($bn), 2008–13 26
Table 2.2: Select M&A deals in CRO industry 2007–08 32
Table 2.3: Select private equity deals in CRO industry ($m), 2007–08 38
Table 3.4: Quintiles snapshot 46
Table 3.5: Quintiles financial performance ($m), 2003–07 48
Table 4.6: Covance snapshot 58
Table 4.7: Covance financial performance ($m), 2003–07 59
Table 4.8: Covance business segment performance, 2007 61
Table 5.9: PPD snapshot 68
Table 5.10: PPD financial performance ($m), 2003–07 69
Table 5.11: PPD business segment performance, 2007 70
Table 6.12: CRL snapshot 78
Table 6.13: CRL financial performance ($m), 2004–07 79
Table 6.14: CRL business segment performance, 2007 80
Table 7.15: ICON snapshot 86
Table 7.16: ICON financial performance ($m), 2003–07 87
Table 7.17: ICON business segment performance, 2007 88
Table 8.18: Parexel snapshot 96
Table 8.19: Parexel financial performance ($m), 2004–08 97
Table 8.20: Parexel business segment performance, 2008 99
Table 9.21: MDS snapshot 106
Table 9.22: MDS financial performance ($m), 2005–07 108
Table 9.23: MDS business segment performance, 2007 109
Table 10.24: Kendle snapshot 116
Table 10.25: Kendle financial performance ($m), 2003–07 117
Table 10.26: Kendle business segment performance, 2007 119
Table 11.27: PharmaNet snapshot 126
Table 11.28: PharmaNet financial performance ($m), 2004–07 128
Table 11.29: PharmaNet business segment performance, 2007 129
Table 12.30: PRA International snapshot 136
Table 12.31: PRA International financial performance ($m), 2003–07 137
Table 13.32: Aptuit Snapshot 146
Table 13.33: LSR Snapshot 147
Table 13.34: LSR financial performance ($m), 2003–07 148
Table 13.35: Omnicare Snapshot 149
Table 13.36: Omnicare financial performance ($m), 2003–07 150
Table 13.37: SGS Snapshot 151
Table 13.38: SGS financial performance ($m), 2003–07 152
Table 13.39: CMIC Snapshot 153
Table 13.40: CMIC financial performance ($m), 2005–08 154
Table 13.41: WuXi Pharmatech Snapshot 155
Table 13.42: WuXi Pharmatech financial performance ($m), 2003–07 156
Table 13.43: BioFocus Snapshot 157
Table 13.44: BioFocus financial performance ($m), 2005–07 158
Table 13.45: LAB Research Snapshot 159
Table 13.46: LAB Research financial performance ($m), 2005–07 160
Table 13.47: UBC Snapshot 161
Table 13.48: Bio-Imaging Snapshot 162
Table 13.49: Bio-Imaging financial performance ($m), 2003–07 163
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