Contract Research Organisations (CRO) Market: US

December 2, 2008

The US CRO market is predicted to have a healthy future, with the greatest potential for growth in the preclinical sector, according to a report by Frost & Sullivan.

In areas such as toxicology studies outsourcing penetration is low, according to the report, which presents an opportunity for companies willing to invest in the sector.

The report says an increase in capital expenditure will be necessary to build or acquire the facilities needed to enter the preclinical toxicology market.

Despite this the report notes that several contract research organisations (CRO) have been making investments in their early stage capacity.

The report predicts that such investments will help the US CRO market grow from the $9.77bn it earned in 2008 to $23.78bn by 2015.

Biotechs are predicted to be the strongest driver of growth, followed by specialty pharmaceuticals and niche and startup small molecule companies.

Although the report predicts a bright future for the US CRO industry it also highlights necessary adaptations if companies are to prosper in an increasingly competitive and fragmented market.

It also forecasts that these factors will result in lower margins for contracts and consequently companies may find it difficult to translate a strong backlog into revenues.

In addition, the global nature of many CROs means that companies will need to work closer with IT vendors to ensure their systems are suitable for the changing market.

Consequently the report predicts that CROs will play an increasing role in choosing IT systems and platforms, with the power to make decisions shifting away from sponsors.

Source: Outsourcing Pharma

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