CyberMedia Research-BioSpectrum Asia-Pacific Contract Research Outsourcing (CRO) Survey 2011 reveals



• Asia-Pacific market for CRO services to grow at 20% CAGR to US$ 2.5 Bn by 2015
• Quality and reliability key considerations in selecting a CRO partner
• India, China hotspots for patient recruitment and clinical trials
• Oncology, Cardiovascular diseases, Dermatology, Neurology and Respiratory diseases top therapeutic focus areas

New Delhi : Contract Research Outsourcing (CRO) and BioPharma firms in the Asia-Pacific region, headed for an exciting phase of growth ahead, need to make radical changes in their business model and growth strategy to align themselves with the huge opportunities that lie ahead of them. The Asia-Pacific CRO market for clinical services (excluding drug discovery) is forecast to grow at a CAGR of 20% to reach close to US$ 2.5 Billion by 2015.

“The outlook for the Asia-Pacific clinical and contract research outsourcing or ‘CRO’ industry is optimistic, with R&D spending expected to post consistent growth over the next three years to 2015,” says Anirban Banerjee, Associate Vice President, Research and Advisory Services, CyberMedia Research.

Mr Banerjee made these observations while releasing the CyberMedia Research-BioSpectrum Asia-Pacific Survey for Clinical and Contract Research Organizations 2011.

The survey details are being published in the September 2011 issue of BioSpectrum, the region’s leading biotechnology and pharmaceuticals industry journal.

According to BioSpectrum estimates, with a 16.6% growth, the Asia-Pacific life sciences industry clocked revenue of US$ 128 Billion in 2010. A variety of factors are contributing to growth of CROs in the region.

Large economies like China, India and Korea, as well as smaller markets like Malaysia and Singapore are expected to drive the Asia-Pacific CRO industry growth on the back of a healthy growth of the bio-pharma sector in the region.

According to Prabhu Ram, General Manager, Healthcare Research and Advisory Practice, CyberMedia Research, “Our research points to ongoing changes and evolution in the business model for CRO enterprises from transaction-oriented engagements to strategic partnerships. The CROs as well as Sponsors need to build long term partnerships such that it leads to a win-win situation allowing for better leverage of limited resources.”

“Over a period of time, such strategic partnerships will give diversity to the business portfolio of Asia-Pacific CROs by providing them an opportunity to drive the long term drug discovery and development vision of global pharma MNCs”, Prabhu added.

The CyberMedia Research-BioSpectrum 2011 survey results indicate that China (26%), India (25%) and Korea (14%) lead in patient recruitments and have emerged as the hotspots for clinical trials in the Asia-Pacific region.

Survey respondents listed Taiwan (7%); Singapore, Australia and Thailand (6% each); Japan (5%); and Malaysia (4%) as other major geographies contributing to significant patient recruitment.

Figure 1. Geographical Spread of Patient Recruitments in the Asia-Pacific Region, 2011

 Source: CyberMedia Research, 2011

Survey respondents from full service CRO category made up 66% of the sample, while 34% were niche firms. Survey respondents overwhelmingly feel that Sponsor budgets are set to rise over the next three years.

According to Nandita Singh, Editor, BioSpectrum Asia, “Strategic outsourcing by large multi national pharma firms is expected to increase as they reduce the number of CROs they work with directly. This trend is expected to continue in the near future.”

“The key priorities of Asia-Pacific CRO firms are growing customer base (47%), followed by a focus on revenue growth (30%), product development (12%) and geographical expansion (11%)”, Nandita further added.

The CyberMedia Research-BioSpectrum 2011 survey reports that over 81% of CROs operating in the Asia-Pacific region received contracts between US$1 to US$ 10 million last year; 10% of the respondents indicated winning orders between US$ 11 and US$ 25 million, while 3% won orders ranging between US$ 26 and US$ 50 million. Contracts valued in the range of US$ 101 and US$ 200 million were cited by 6% of the respondents.

“Although a majority of Asia-Pacific CRO firms are small to mid-size with access to limited resources, they are capable of moving up the value chain and execute large orders. This is evident from the fact that the top-tier firms have displayed the maturity and expertise to manage complex and multi-location trials of contract values greater than US$ 100 million”, Prabhu Ram, General Manager, Healthcare Research and Advisory Practice, CyberMedia Research concluded.

Some of the other key highlights of the CyberMedia Research-BioSpectrum Asia-Pacific Survey for Clinical and Contract Research Organizations 2011 are:

  • Market Opportunity Assessment. Majority of survey respondents said market opportunities would increase for full-service and niche operators over the next 3 years to 2015.
  • Therapeutic areas of focus for CROs. Oncology, Cardiovascular diseases, Dermatology, Neurology, and Respiratory diseases are the top five focus areas for the surveyed CRO firms.
  • Concentration of clinical trials. The concentration of projects is mainly in Phase III clinical trials. A few niche CRO firms operate in Phase I and preclinical research, while other CRO firms span across the developmental pipeline.
  • Key considerations for assessing CROs. When assessing a CRO/CMO, the key considerations for Sponsors are quality and reliability, pricing, regulatory compliance, and productivity, in that order.

About the Survey
The CyberMedia Research-BioSpectrum Asia-Pacific Survey for Clinical and Contract Research Organizations 2011 included a mix of quantitative and qualitative questions, administered through email, and direct telephonic interviews.

The scope of the survey includes multinational, regional and local CROs based in the Asia-Pacific region with annual revenues up to US$ 1 Billion. The survey also includes opinions of biopharmaceutical enterprises in the large, mid and small categories.

The survey targeted a set of 422 respondents spread across large, regional and small firms in the Asia-Pacific CRO industry, and 90 respondents from the BioPharma industry. The survey respondents were based in India, China, Malaysia, Singapore, Taiwan, South Korea, Australia as well as those based in Ireland, Scotland, and North America.