Mark Shapiro is the Vice President of Clinical Development at Clinipace.
In the November issue of CenterWatch Monthly, writer Karyn Korieth tackles the subject of private equity and its role in reshaping the CRO landscape. In her summation, private equity (PE) has given the industry “financial stability it might not otherwise have and providing the capital for CROs to expand, both organically and inorganically, to offer a broader range of services and greater efficiency to support R&D innovation.”
PE firms and CROs have consistently entered into strategic partnerships, well documented for at least the past 10 years, such that PE investment has become the norm for medium and larger CROs.
Why is this happening? What does it mean for study sponsors? The CRO industry has been steadily growing for many years—last year generating nearly $25B in revenue. Perhaps most attractive to investors is the steady growth in outsourcing and forecasts of continued growth well into the future.
As Karyn points out in her article,
“As the outsourcing landscape evolves, fueled in large part by PE investment, CROs will move toward providing a greater breadth and depth of services to support R&D innovation and development.”
As a medium-sized CRO serving venture-backed, mid-tier and strategic pharma, biotech and medical device companies, this is something we at Clinipace can certainly appreciate. In my conversation with Karyn, I shared that,
“We’re just starting to appreciate how changed the landscape is, and we are starting to consider how all of this affects our go-forward strategy. Should we change our strategy or rethink our strategy, based on just how much the CRO industry has changed?”
Ultimately, PE investment has greatly benefited sponsors and CROs, enabling the industry to invest in new technology, globalize operations, and maintain business continuity in a rapidly changing environment.
What’s your opinion? We’d love to hear from you.
To access other CenterWatch news and resources online, click here.
You might also be interested in reading my previous blog post, “Understanding the Role of Private Equity Investment in the CRO Industry.”