The Tangled Web of Large Outsourced Providers

CROs, as an industry, appear to be in a period of change. The overall market for mergers and acquisitions since the year of COVID have needles moving in various directions. Let’s dial those in.

First up is largest financial transaction, Thermo Fisher’s acquisition of PPD, worth $17.4 billion, which should close in the third quarter. Thermo Fisher has long eyed its importance to the clinical trials space because of its manufacturing capabilities around APIs and clinical trial supplies. It, like others, jumped on the decentralized trials bandwagon in late October through its Direct-to-Patient service offering bringing those medications directly to the patient. The acquisition of PPD grows its clinical trials scope, as well as nests its existing manufacturing customers with an extended value proposition in the services chain.

Two additional M&As worth mentioning are the Syneos acquisition of CRO Synteract for $400 million in late October. This acquisition calls for the former to leverage the latter’s small-to-midsize biopharma client base. The second is ICON’s $12 billion purchase of PRA Health Sciences in February. That acquisition elevates the number fifth and sixth largest CROs to the second spot, behind IQVIA. The ICON/PRA merger also plans to capitalize on the decentralized trials movement through its mobile technologies and site platform network.

Meanwhile, in mid-May, mid-size CRO Premier Research acquired Camargo Pharmaceutical Services. Camargo will allow Premier to leverage its focus on emerging biopharma’s needs for rare disease and complex development programs, as well as the accelerated approval pathways more common among smaller biopharma.

What trends can we untangle from these transactions? The CMO/CDMO space is looking to capitalize on the needed manufacturing capabilities for vaccines and biologics that are more prevalent in the drug development landscape by offering those services as part of their portfolios. Not since the transformation of the INC Research and inVentiv Health to Syneos Health and the IMS/Quintiles to IQVIA for an extended clinical research-to-commercialization chain has a market extended its horizontal reach to existing customers.

We can infer that that the attraction to emerging, small and midsize biopharma clients will continue to be a focus for the expertise in clinical operations, regulatory, decentralized trials, and manufacturing they require. What does that mean for clinops professionals? Not so much day-to-day, but an understanding of the bigger picture regarding the needs of smaller sponsors is vital.

Lisa Henderson is Editor-in-Chief of Applied Clinical Trials. She can be reached at lhenderson@mjhlifesciences.com.