Think Big on Outsourcing: A Network Approach for Small Biopharma

When tracking the more recent evolution of clinical trial outsourcing in the biopharmaceutical industry, it has usually been the high-profile partnerships and alliances struck between large drugmakers and contract research organizations (CROs) that have received the most attention and coverage. What has been less readily known are the unique outsourcing needs of the small or so-called emerging biopharma company and how those differ from the larger sponsor organizations. The former is characterized by very strategic outsourcing decision-making, while, for the latter, decisions to outsource are often considered more tactical in nature.

“It's challenging for a virtual or a startup sponsor to get the kind of attention that it needs,” Keith Wenzel, Senior Director of Perceptive Partner Program (part of CRO Parexel), tells Applied Clinical Trials. “They often only have one program, and if that program fails, they are all out of business.”

Such realities have spurred increased collaboration to develop more personalized outsourcing approaches to aid fledgling drug sponsors. At the recent DIA 51st Annual Meeting, Wenzel, along with Solomon Babani, Global VP of Alliance Management for Covance, and R&D executives from two small biopharmas, presented a conceptual partnership model built on the idea of delivering value from alliances between networks of biopharma companies and CROs-involving clinical and technology functions.

“How can you bring a bunch of small, emerging biopharmas into a network and have them agree on standards and agree on technology?” Wenzel told us in an interview. “It’s turning the whole thing around and having a group of sponsors collaborating together so they could possibly get the attention of larger CROs. The large CRO would know that working with this group that it’s going to be able to work within a standardized manner, because they might have agreed on contracts, on forms, on SOPs, on technology, etc. Therefore, the CRO can say, 'Ok, I understand how I’m going to collaborate with these guys in the same way a large pharma and a large CRO agree on standards.'”

Large impact

The small/emerging biopharma segment is generally classified as those companies who spend $300 million or less on R&D annually. According to statistics cited by Wenzel during his DIA session, emerging biopharmas are responsible for about one-third of the global drug development outsourcing market, one estimated to total more than $25 billion. Wenzel, who is part of Parexel’s informatics group, which, through the Perceptive Partner Program, partners with technology companies on behalf of sponsors and CROs, notes that eClinical technology is one of the fastest growth areas in outsourcing today (the global eClinical solutions market is projected to reach almost $5 billion annually in 2018). Clinical data management systems (CDMS) and electronic data capture (EDC) tools make up the largest outsourcing segment in this space, followed by clinical trial management systems (CTMS), according to figures presented by Wenzel. He believes applying the principles of alliance management can help small and emerging sponsors capitalize on the eClinical growth.    

“When you think about the technology side of this, a small sponsor ramps up for a trial and then they stop, and they ramp up again and then they stop. They might not be able to invest in a CTMS system based off of that ebb and flow,” says Wenzel, who has a vast background in information systems, including working as product director at ClinPhone before Parexel acquired the company in 2008. “But if a group of sponsors committed to a CTMS system and they agreed on how they were going to use it and pay for it when they need it, they wouldn’t have this huge infrastructure investment. For example, maybe the CRO brings the CTMS system to the network, and it’s a standard implementation-any of them can use it; they can turn it on and turn it off depending on the needs of their particular trial.”

The proposed model discussed at the DIA meeting involves leveraging eClinical technology with CRO services, where members of the network can have combined purchasing power and can collaborate on collective and precompetitive innovation. (cont'd on next page)

“You can see the advantage of greater purchasing power because the network would have more power,” says Wenzel. “But we really think it’s the combination of the purchasing power plus the standards that will get you there-and it’s good for both sides, not just for one.”    

Wenzel believes the model also aligns well with the three pillars widely considered the foundation blocks of a strong outsourcing relationship: people, technology, and therapeutic expertise. He points out that small and emerging sponsors often have unique needs in these core areas, and usually have very defined questions when it comes to executing their R&D programs. Some of those questions include how does the sponsor identify issues early, so adjustments can be made before time and money are wasted; how does the company demonstrate that its drug will be commercially attractive; and what core competencies should exist/be kept in-house. 

 “A major pharma can make a five-year commitment to a large CRO,” says Wenzel. “But these smaller companies are saying, ‘I want that same level of service, but I don’t quite have the same purchasing power.’ That’s where the network of sponsors comes from. They may not have established SOPs, or they may not have a mature certain set of scientific expertise, so they really want the ability to do almost an a la carte. ‘OK, I need this kind of expertise from you, Mr. CRO. How can you package it for me and treat me just the same as you’re going to treat your big clients?’”

Keys to implementation

Transforming these concepts of alliance management from idea to reality-the establishment of a bona fide network of small and emerging biopharmas-naturally brings to mind several challenges. Wenzel says the biggest overarching concern may be clearly delineating when something is collaborative versus competitive, and where to draw the line between what members can share and what they’re not willing to share. Examples of the latter may include specific IP or scientific expertise or certain partnership models with payers.

“Coming in the door and saying you must use this technology or this is the way we handle alliance management-kind of take it or leave it-that’s not obviously the right solution, regardless of the size of the relationship,” Wenzel tells us. “It’s a two-way street. It’s not just about the CRO being responsible to the sponsor; the sponsor also has to find a way to work with the CRO.”

According to Wenzel, the key will be finding the “sweet spots” in the relationship. Could a network of sponsors, pursuing the same targets, collaborate and share clinical trial placebo arms, for example? Alternately, could a CRO, for instance, invest in a natural history study in a particular disease area, and then make the data available to a group of sponsors, so they wouldn’t each have to conduct the study individually?

“It’s the question around where could they share for advantage and where can’t they share because of competitive information?” says Wenzel.