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Frost & Sullivan Identifies Focus on Quality Management and Adoption of a Full-service Model as Keys to the Growth of the European CRO Market

Monday, October 12, 2009 General News J E 4
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LONDON, October 12

Although cost efficiency is a major factor motivating pharmaceutical andbiotechnology firms to outsource research, there is an increased emphasis onexpertise and capabilities with the focus being on quality management. In thelong term, European contract research organisations (CROs) with scale, globalcapabilities and expertise will emerge winners. At the same time, there is anevident evolution towards a full-service model.

(Logo: http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

New analysis from Frost & Sullivan (http://www.pharma.frost.com),European CRO Markets - A Strategic Analysis, finds that the European CROmarket was $7.10 billion in 2008 and estimates this to reach $13.52 billionin 2015. The research analyses market dynamics, leading companies andindustry trends to offer an opportunity analysis for the CRO market in theregion.

If you are interested in a virtual brochure, which provides a briefsynopsis of the research and a table of contents, then send an e-mail toKatja Feick, Corporate Communications, at katja.feick@frost.com, with yourfull name, company name, title, telephone number, company e-mail address,company website, city, state and country. Upon receipt of the aboveinformation, a brochure will be sent to you by e-mail.

"The growth of the European CRO market is expected to be spurred by theneed for pharmaceutical and biotech companies to control costs and accelerateproduct development," notes Frost & Sullivan Industry Analyst RanjithGopinathan. "The high costs incurred when drugs fail during clinical trialshas prompted interest in biomarkers. Hence, the development of biomarkers isa new growth driver for CROs."

European CROs could assist biotechnology and pharmaceutical companies incompound selection, dose optimisation, efficacy and safety monitoring throughthe identification of biomarkers. They increasingly view this as an importantgrowth segment. For instance, France based CRO Biovays focuses on expression,localisation and quantification of biomarkers.

CROs in Europe are also establishing strategic partnerships withpharmaceutical companies and adopting effective outsourcing models. Inaddition, they are expanding their global operations. Clinical trials areincreasing in size and CROs are going offshore to benefit from untappedpatient populations and imperatives of cost efficiency. Moreover, there is anincreased opportunity for CROs offering initial screening programmes andcapabilities in preclinical and early clinical trials. For instance,medium-sized European CROs such as UK-based Melbourn Scientific are venturinginto the preclinical segment in order to capitalise on this trend.

"From early drug discovery through post-launch services, pharmaceuticalcompanies are moving their non-core functions to external providers," statesGopinathan. "CROs are expanding their scope of operations to leverage theirexisting functions."

Consolidation within the pharmaceuticals industry has led to increasedcompetition for CRO contracts. The rapid consolidation of the pharmaceuticaland biotech industry would constrain CROs to compete for a smaller pool ofcustomers. Consequently, there is a need for consolidation of the EuropeanCROs. For instance, PPD's acquisition of AbCRO, a European contract researchfirm offering Phase II-IV clinical services, will help PPD to penetrate keyCentral and Eastern European markets such as Romania, Bulgaria, Serbia andCroatia.

Even though cost efficiency is a major driver for any pharmaceutical andbiotechnology firm, currently there is greater emphasis on capabilitiesrather than on the ability to be a low-cost provider. Expertise is aprerequisite for CROs involved in late-stage clinical trials.

"Many European CROs are moving towards a full service model," remarksGopinathan. "In addition, European CROs such as Eurofins provide value addedservices like consultancy, in order to differentiate themselves in the highlycompetitive European CRO market landscape."

European CRO Markets - A Strategic Analysis is part of thePharmaceuticals & Biotechnology Growth Partnership Services programme, whichalso includes research in the following markets: European UrinaryIncontinence Therapeutics Markets, European Endometriosis TherapeuticsMarkets, Blockbusters Going Off-patent: Opportunities for GenericsManufacturers in Europe and, European Osteoarthritis Market. All researchincluded in subscriptions provide detailed market opportunities and industrytrends that have been evaluated following extensive interviews with marketparticipants.

Frost & Sullivan, the Growth Partnership Company, enables clients toaccelerate growth and achieve best in class positions in growth, innovationand leadership. The company's Growth Partnership Service provides the CEO andthe CEO's Growth Team with disciplined research and best practice models todrive the generation, evaluation, and implementation of powerful growthstrategies. Frost & Sullivan leverages over 45 years of experience inpartnering with Global 1000 companies, emerging businesses and the investmentcommunity from more than 35 offices on six continents. To join our GrowthPartnership, please visit http://www.frost.com.

European CRO Markets - A Strategic Analysis (M377)

Contact: Katja Feick Corporate Communications - Europe P: +49-(0)-69-7703343 E: katja.feick@frost.com http://www.frost.com

Katja Feick of Frost & Sullivan Corporate Communications - Europe, +49-(0)-69-7703343, katja.feick@frost.com; Photo: http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO
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