Global CRO MarketTransformation, developments, opportunities and future of CRO market

P846-52 February 2015

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Table of Contents

Section Slide Numbers

Executive Summary 5

Market Overview 21

Competitive Playbook 34

Total CRO Market -

• External Challenges: Drivers and Restraints 44

• Forecast and Trends –Total Market 51

Competitive Environment 61

CRO Segment Analysis -

• Pre-clinical Trials Segment 75

• Phase I Trials Segment 83

• Phase II Trials Segment 92

• Phase III Trials Segment 99

• Phase IV Trials Segment 107

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Section Slide Numbers

• Data Management Segment 115

• Biostatistics Segment 123

• Pharmacovigilance Segment 131

• Health Economics & Outcomes Research (HEOR) Segment 139

• Pharmaceuticals and Biotech Laboratory Testing Services Segment 147

o Analytical Testing Services -

• cGMP Testing Segment 154

• Bio-analytical Testing Segment 162

o Analytical Testing Services Segment Competitive Environment 170

o Central Laboratory Testing Segment 181

Table of Contents (continued)

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Section Slide Numbers

Regional Breakdown -

• North America CRO Market Overview 188

• North America Segment Analysis by Phases 196

• Europe CRO Market Overview 205

• Europe Segment Analysis by Phases 212

• APAC CRO Market Overview 220

• APAC Segment Analysis by Phases 228

• Rest of the World (ROW) CRO Market Overview 236

• Rest of the World (ROW) Segment Analysis by Phases 244

The Last Word 252

Appendix 256

Table of Contents (continued)

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Market Size Estimation Methodology

Frost & Sullivan followed a three-step methodology to develop the analysis:

The information above was analysed and aggregated to produce this research service.

Frost & Sullivan uses the expertise of the global research staff

supported by the internal databases to develop insights into the

contract research market.

Secondary research is utilised to develop a baseline understanding of

the contract research industries as well as to identify key stakeholders

for the primary research phase.

Approximately 80 percent to 90 percent of the data provided in the

primary research is focused on obtaining targeted information from key

market participants by means of telephone and face to face interviews.

2. Secondary Research

3. Primary Research

1. Internal Expertise

Source: Frost & Sullivan

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Scope and Segmentation

Scope

Geographic coverage Global

Study period 2013–2019

Base year 2014

Forecast period 2014–2019

Monetary unit US Dollars

Geographical Segmentations:

• North America

• Europe

• APAC

• ROW

This research service analyses the global clinical trials and research outsourcing (CRO) market.

It provides revenue forecasts for CROs globally by phase, therapeutic type and region.

The research study addresses the major issues and challenges, unmet needs and emerging trends in the market. Also, outlines market drivers and restraints and R&D trends.

Source: Frost & Sullivan

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Key Questions This Study Will Answer

How will contract research outsourcing help in drug development by saving time and cost for manufacturers?

What is the impact of the market growth in different regions?

Who are the predominant market participants in the CRO market and their market share contribution?

What are the key market trends observed towards expansion of contract research organizations in drug development across key therapeutic areas?

Are the products/services offered today meeting customer needs or is additional development needed?

What are the key market segments to look out for and what are the key trends followed in the market?

Source: Frost & Sullivan

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Segmentation: CRO Value Chain

Source: Frost & Sullivan

Pre-clinical

Product Development Approval

Health Economic and outcome research (HEOR)

Phase I Phase II Phase III Phase IV

Central Lab

Biostatistics

Data Management

Late PhaseInterventional

Late PhaseObservational

Late Phase Pharmacovigilance

Other HealthcareSolutions

Commercialization

Bio-analytical TestingBio-analytical Testing

Total CRO Market: Stages of Clinical Development, Global, 2014

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Pharmaceuticals and Biotech Laboratory Testing Services: Market Overview

Discovery Preclinical Phase 1 Phase 2 Phase 3 Phase 4 Market

Bio-analytical Testing

cGMP Testing

Central Laboratory Testing

Key Companies: Eurofins Scientific, PPD, Quintiles, Covance,

LabCorp, ICON

Key Companies: Eurofins Scientific, WuXi AppTec, SGS Life

Sciences, Bio Reliance, etc

Key Companies: Charles River Laboratory, Eurofins Scientific, Bio-

Reliance, WuXi AppTec, SGS Life Sciences, PPD

Core activity in Drug Development

Non-core activity in Drug Development

Pharmaceuticals and Biotech Laboratory Testing Services : Market Overview, Global, 2014

Pharmaceutical Laboratory Testing Market

Source: Company Presentation, Frost & Sullivan

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The Pharmaceutical Laboratory Testing outsourcing market comprises the following service segments:

1. cGMP Analytical Testing: QC Testing (Release, Environmental, Microbiology testing) Services, Purity, Safety and Characterization Services, Formulation & Stability and Storage Services, Package and Container Testing Services

2. Bio-Analytical Testing: Biomarker Testing, Cell-Based Assays, Immunogenicity & Neutralizing Antibody, Metabolite Profiling & Balance Studies (14C-Labeled Drug), Method Development Optimization & Validation, Pharmacokinetic Testing

3. Central Laboratories

Analytical Testing

Total Pharmaceuticals and Biotech Laboratory Testing Service Market

Pharmaceuticals and Biotech Laboratory Testing Services: Market Segmentation, Global, 2014

Bio Analytical

Testing

Pharmaceuticals and Biotech Laboratory Services Market Segmentation

Central Labs

cGMP Analytical

Testing

Source: Frost & Sullivan

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Rise in demand for conducting global trials

IT-enabled offerings to

grow

Data analytics to witness

radical growth

Increased strategic M&A

Speed time-to-market

Cost effective advance

innovation

Increase in laboratory

testing outsourcing

Demand for late-stage

development services

One stop shop for

laboratory services

Global CRO Key Market Trends

For detailed version, click here.

Source: Frost & Sullivan

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CEO’s Perspective

2

Rising competition from developing countries such as Asian and Latin American countries are impeding the market growth of developed nations

3Outsourcing in early phases of clinical trials will rise, as big pharmaceutical companies are exploring this as a cost saving measure

4Increased flexibility in services provided by CROs, especially in the function-to-function outsourcing model

5

Strengthening of outsourcing partnerships and alliances with leading pharmaceutical and biotech companies through improved strategic long-term contracts.

1

Adopting a forward looking business model to efficiently address the growing needs of the CRO industry. A model with constant improvisations in managing clinical trials

Source: Frost & Sullivan

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Sample of Key Highlights

• The global CRO market was xxxx billion in 2014 and is expected to reach xxx x billion in 2019,

growing at a robust CAGR of xx from 2013 to 2019.

• The penetration of global CRO market stood at xx in 2014 against the potential outsourcing market

providing a huge opportunity for CRO companies to increase their market share.

• The share of services, such as Data management, Biostatistics, Health economic outcome

research and Labs is expected to grow at a double digit rate in next 5-6 years.

• Geographic outsourcing to lower-cost locations is likely to result in lesser margins in the short term,

but increased volume share. However, with increased capacity and scale, companies are expected

to improve their margins during rest of the forecast period.

• The volume of outsourcing to emerging markets is expected to increase significantly. However,

North America will retain a large portion of the high-value business.

• Specialized services such as eClinical trial solutions, adaptive trial designs and outcomes research

are expected to transform the way clinical trials are performed today.

Source: Frost & Sullivan analysis.

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Partial List of Companies Interviewed

• CMIC Co. Ltd

• Covance, Inc.

• InVentiv health

• INC Research

• LSK Global Pharma Service

• Novotech (Australia) Pty Ltd

• PAREXEL International

• Pharmaceutical Product Development

(PPD)

• PhaseON Clinical Research Pvt. Ltd

• PRA International

Source: Frost & Sullivan research.

• QUANTICATE LTD

• Quintiles

• SGS Life Sciences

• Tigermed Consulting Ltd.

• WuXi PharmaTech