As austere times in the biopharma industry push companies to cut costs wherever they can, contract research organisations are well positioned to pick up the slack. And if they have a technology that can cut time and therefore cost from the drug development process, customers will beat a path to their door.
“More and more the role of a CRO will be to put the pieces of the puzzle, in terms of drug development, together, as a service to the pharma,” Jean-Marc Leroux, vice-president of global operations and business development at Covance, tells EP Vantage. In signing an agreement with the cancer-focused genetics testing firm NeoGenomics, Covance is betting that it will be able to assemble the jigsaw, at least in oncology, faster than its competitors.
The collaboration grants Covance access to NeoGenomics’ expertise in anatomic pathology, which it can use to speed drug development. “When you have to run a clinical trial globally, the main challenge is turnaround time,” Mr Leroux says. “Through the new process that we will set up, turnaround time will be reduced. If you can reduce development time by even a few months it will be beneficial for our clients.”
He explains that NeoGenomics needs the global reach Covance can provide. The CRO will be responsible for the collection of samples, the preparation, the staining and the imaging, worldwide. NeoGenomics will oversee the reading and interpretation of the slides – “The professional component,” as Mr Leroux puts it.
NeoGenomics’ immunohistochemistry and fluorescence in-situ hybridisation services, as well as its molecular diagnostic and genetic testing expertise, will be integrated into the drug development process, Mr Leroux says. “We will have access to their network of more than 500 pathologists with different expertise in different therapeutic areas.” He declined to disclose the financial details of the deal.
And if the technology can cut time, it can cut costs. “When we have a partner with all this expertise in speciality testing in terms of companion diagnostics and precision medicine for oncology, we would propose something very efficient,” Mr Leroux says. Perhaps Covance's customers will now seek lower prices as a result.
If all goes well, use of molecular tests to guide drug development will lead the companies into the area of personalised medicine. Mr Leroux says: “With this alliance both of us will be more prepared in terms of validation of companion diagnostics. This is an area where NeoGenomics already has experience.” Still, he cautions that synchronising the development of a drug and that of its companion diagnostic can be difficult.
In common with many players in this space, Covance is moving towards emerging markets. The company has five labs, based in Geneva, Indianapolis, Shanghai, Singapore and Tokyo, giving it a global footprint, Mr Leroux says.
“We are traditionally an American company but now more revenue comes from the rest of the world than from the US.
“We see a shift in clinical trials from US to Eastern Europe, and now to Asia. We are a mirror of the R&D structure of our clients, and as our clients are investing more in emerging markets we are adapting to their needs,” Mr Leroux says.
It is also vital to stay on top of new technologies that will require testing. “In the industry we think that we are dealing only with small and large molecules – but it’s not true anymore. We have had small molecules and biologicals now for a long time, but now you have gene therapy coming, microRNA therapy and cell-based therapies.”
Mr Leroux believes that the next boom will be with regenerative medicine and cell therapies. “We are seeing an increase in stem cell studies and a CRO has to get prepared to support this new therapy. There are at least 200 clinical trials right now at the earliest stages in regenerative medicine. What you see right now is only the tip of the iceberg.”
No choice but to outsource
Lately, Mr Leroux says, Covance has been capitalising on the cost-cutting programmes implemented by its clients. He says that currently around 40% of preclinical and clinical research is outsourced, but that this is increasing. He believes that this figure will reach at least 60%.
“We have to understand that with the pressure our clients are under with reimbursement of drugs and the patent cliff they have to go through, they are looking for a new paradigm. And that is to find companies like us who have a 'variable cost R&D concept' which allows them to be more efficient and to bring drugs to the market sooner.
“We are performing so well right now because we have the right size and scope to provide this new model to them. In future they will continue to outsource – I don’t think that they have another choice but to do that.”