SOURCE: Cutting Edge Information

Cutting Edge Information

June 04, 2009 10:17 ET

Clinical Development Riding Out Recession; Cutting Edge Information Examines Trends and Provides Strategies for Eliminating Obstacles

RESEARCH TRIANGLE PARK, NC--(Marketwire - June 4, 2009) - The worldwide recession threatens to hamper drug development as companies reexamine their plans for clinical testing.

Major late-stage projects -- the drugs closest to regulatory approval -- won't feel the pinch. Nor will studies funded by major pharmaceutical and biotech companies, whose finances are relatively stable.

However, trial sponsors (drug companies) and the clinical services industry are feeling the effects of economic struggles. Standard and Poor's estimates that the clinical research organization (CRO) sector alone is generating $20 billion of revenue per year, but projected cancellations continue to shrink revenue. Global CROs such as Kendle and PPD, for example, announced disappointing Q1 returns thanks in part to struggles among client firms. Smaller sponsors, especially those companies not yet producing revenue, have had to reassess development plans as operating capital dwindles and the future remains unclear.

For clinical services, however, the recession should prove a temporary slowdown. Firms continue to expand or build their clinical capabilities. For example, Tata Consultancy Services (TCS), the Indian information technology giant, has focused on growing its existing clinical data management service. As sponsors look to cut development costs and improve clinical productivity, more firms will increase their presence in clinical development.

Although the economic downturn may fade into memory for clinical service companies, relationship management with clients will always be a chief concern. A recent study by research firm Cutting Edge Information reports that sponsors ranked "finding experienced personnel" as a 4.1 out of 5 in terms of importance when selecting a clinical services partner. Likewise, a vendor's "reputation for success" is rated 4.1 out of 5.

"Companies are rapidly filling an expanding set of specialized roles in clinical development," said Jeremy Spivey, author of the report. "At the same time, sponsors are diligent in the vendor selection process. Their needs must be met, whether with a preferred vendor or with a new partner."

The report, "Clinical Outsourcing Strategy: Selecting Partners and Managing Relationships" ( discusses benefits and drawbacks when outsourcing trials. The report examines clinical outsourcing trends and provides strategies for eliminating common obstacles in CRO selection and management. It also shows trial sponsors how to formulate a proactive outsourcing strategy, establish criteria for selecting a vendor, and manage day-to-day CRO relationships.

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