Looking at the first eight months of 2013, mergers and acquisitions (M&A) in the biopharmaceutical industry have increased on both a value and volume basis compared to the same period last year. Although there were no megamergers in the industry, there were several noteworthy deals, including Amgen’s proposed $10.4-billion acquisition of the biopharmaceutical company Onyx Pharmaceuticals. Additionally the number and value of deals involving a single innovative drug or part of the company were up significantly in 2013 thus far, reflecting the tactical nature of biopharmaceutical dealmaking. 

 A Burrill & Company analysis of overall M&A activity for innovative therapeutics companies during the first eight months of 2013 shows that total deal value increased 12.3% to $31 billion in 41 transactions compared to $27.6 billion in 38 transactions during the same period a year ago, according to a Sept. 3, 2013 press release by Burrill & Company. The Burrill & Company analysis further showed that upfront money in private company transactions increased and that more transactions involved a single innovative drug asset or part of a company. 

In 2013, average upfront payments represented 42% of the total potential values of transactions, compared to average upfront payments representing 26% of total potential transaction values in 2012. Overall, the number of privately held innovative therapeutics companies fell to 30 in the first eight months of 2013 compared to 39 in 2012, nearly a 25% decline, according to the Burrill analysis. “The resurgent IPO [initial public offering] market is providing alternatives to privately held biotechs that can access capital with attractive valuations,” said G. Steven Burrill, CEO of Burrill & Company, a global financial services firm focused exclusively on the life sciences, in the company’s September press release. “At the same time, though, acquirers are focusing more on buying assets rather than companies,” he added. The analysis found that a total of 55 transactions thus far in 2013 valued at $31.8 billion involved a single innovative drug asset or part of a company, compared to 26 such transactions worth $4 billion during the first eight months of 2012. Overall, life sciences M&A transactions were up 13.3%percent globally to $91.6 billion during the first eight months of 2013 compared to the period a year ago.

Thus far in 2013, there have been several noteworthy transactions. Amgen’s proposed $10.4-billion acquisition of the biopharmaceutical company Onyx Pharmaceuticals, is the largest therapeutics transactions of the year. In August 2013, seeking to build its oncology drug portfolio, Amgen agreed to acquire the biopharmaceutical Onyx Pharmaceuticals for $10.4 billion ($9.7 billion net of estimated Onxy cash). The deal is expected to close in the fourth quarter of 2013, subject to customary closing conditions and regulatory clearance. Onyx Pharmaceuticals has a growing multiple myeloma franchise, which includes Kyprolis (carfilzomib) for injection already approved in the United States. Onyx holds global rights to Kyprolis, excluding Japan. Kyprolis has orphan-drug designation in the United States with exclusivity until July 2019, and patents in the US that extend until at least 2025. In addition, Onyx has three partnered oncology assets: Nexavar (sorafenib) tablets (an Onyx and Bayer HealthCare Pharmaceuticals compound), anoral kinase inhibitor, approved in the US for unresectable hepatocellular carcinoma and advanced renal cell carcinoma; Stivarga (regorafenib) tablets (a Bayer compound), an oral kinase inhibitor, approved in the US for for metastatic colorectal cancer; and palbociclib (a Pfizer compound), an oral, small molecule cyclin-dependent kinase 4/6 inhibitor, now in Phase III trials, to treat ER+, HER2-negative advanced breast cancer. Amgen says that the acquisition of Onyx will add to Amgen's late-stage pipeline. This pipeline includes nine innovative products for which registration-enabling data are anticipated by 2016. Four of these products are oncology products. Onyx's pipeline complements Amgen's oncology portfolio, according to Amgen.

Also, in August 2013, Amgen closed on its deal with the French pharmaceutical company Servier under which Amgen has obtained commercial rights in the US to Servier's oral drug, approved in the European Union as Procoralan (ivabradine), for chronic heart failure and stable angina in patients with elevated heart rates. Amgen also received an exclusive option to develop and commercialize Servier's investigational molecule, S38844, for cardiovascular diseases in the US Currently, S38844 is in Phase II studies for the treatment of heart failure. Through the collaboration, Servier obtained an exclusive option to commercialize omecamtiv mecarbil in Europe. Omecamtiv mecarbil is an activator of cardiac myosin, which is currently being tested for potential applications in the treatment of heart failure in patients with systolic dysfunction.

Thus far, AstraZeneca has been active on the M&A front. In August 2013, MedImmune, the company’s biologics arm, agreed to acquire the biopharmaceutical company Amplimmune for $500 million with $225 million upfront and the rest contingent on the achievement of specified milestones. Amplimmune is a Maryland-based developer of cancer immunotherapeutics. The deal, which is subject to customary regulatory closings, is expected to close in the third quarter of 2013.

The acquisition will strengthen MedImmune’s oncology pipeline by obtaining multiple early-stage assets for its immune-mediated cancer therapy (IMT-C) portfolio, including AMP-514, an antiprogrammed cell death 1 monoclonal antibody (mAb). AMP-514 is in late-stage preclinical development, and Amplimmune expects to file an investigational new drug filing before the end of 2013. Other Amplimmune assets include multiple preclinical molecules targeting the B7 pathways.

Founded in 2007 and headquartered in Gaithersburg, Marlyand, Amplimmune is focused on developing costimulatory/co-inhibitory molecules that rebalance the immune system and are intended for treating cancer, autoimmune disease, infectious disease, and transplantation. Amplimmune has three biologic product candidates: AMP-224 is in Phase Ib trials in cancer; AMP-110 for autoimmune diseases in partnership with Daiichi Sankyo; and AMP-514 for cancer. The acquisition builds on MedImmune's oncology R&D activities. MedImmune’s oncology research is focused on IMT-C, a therapeutic approach that may lead to durable and prolonged response rates across a range of cancer types. IMT-Cs are being designed for the immune system to counteract the tactics employed by cancer cells to avoid detection and attack the body. MedImmune's clinical-stage program includes tremelimumab, an anti-OX40 mAb, and MEDI-4736, an anti-PD-L1 mAb. The acquisition of the Amplimmune technology and pipeline strengthens AstraZeneca's and MedImmune portfolio to enable the use of data-driven combinations of IMT-C molecules as well as combinations with highly targeted small molecules.

In another deal, in June 2013, AstraZeneca completed its $1.2-billion acquisition of Pearl Therapeutics, which is focused on the development of inhaled small-molecule therapeutics for respiratory disease. The acquisition gives AstraZeneca access to a potential new treatment for chronic obstructive pulmonary disease currently in late-stage development and inhaler and formulation technology that provides a platform for future combination products. The $1.2-billion deal included $560 million in upfront payments, $450 million in deferred compensation contingent on reaching certain development and regulatory milestones, and $140 million in sales payments, contingent on reaching sales thresholds. 

In May 2013, AstraZeneca agreed to acquire Omthera Pharmaceuticals, a specialty pharmaceutical company based in Princeton, New Jersey, focused on the development and commercialization of new therapies for abnormal levels of lipids in the blood for $323 million ($260 million in cash and $63 million for Omthera’s cash balance). Omthera’s investigational product, Epanova, being developed for the treatment of patients with very high triglycerides, is a omega-3 free fatty acid composition that has been shown to bolster levels of eicosapentaenoic acid and docosahexaenoic acid in the blood. In addition to the cash payment, each Omthera shareholder will receive contingent value rights of up to approximately $4.70 per share, equating to approximately $120 million in total, if specified milestones related to Epanova are achieved, or if a milestone related to global net sales is achieved. This will bring the total potential acquisition cost to approximately $443 million. The transaction is expected to close in the third quarter of 2013. Also in April 2013, MedImmune, the biologics arm of AstraZeneca, acquired AlphaCore Pharma, an Ann Arbor, Michigan-based biotechnology company focused on the development of ACP-501, a recombinant human lecithin-cholesterol acyltransferase (LCAT) enzyme.

In a move to bolster its oncology portfolio, Johnson & Johnson completed its $1-billion acquisition of Aragon Pharmaceuticals, a privately held pharmaceutical discovery and development company focused on drugs to treat hormonally driven cancers. The acquisition includes Aragon’s androgen receptor antagonist program. Aragon’s lead product candidate is a second-generation androgen receptor signaling inhibitor, ARN-509, in Phase III development for castration-resistant prostate cancer (CRPC). Under the terms of the agreement, Johnson & Johnson is making an upfront cash payment of $650 million, plus additional contingent payments of up to $350 million based on reaching predetermined milestones.

In May 2013, GlaxoSmithKline acquired Okairos, a Swiss privately held developer of vaccine platform technologies for EUR 250 million ($325 million) in cash. GSK plans to use the vaccine platform in its of new prophylactic vaccines (designed to prevent infection) as well as new classes of therapeutic vaccines (designed to treat infection or disease). The deal also includes a small number of early-stage assets.

Articles

Global Feature

Mergers and acquisition activity on both a volume and value basis is up thus far in 2013 comparative to 2012.

Amgen’s Acqusition of Onyx Leads Biopharmaceutical Dealmaking in 2013

In an effort to increase the number of minority investigators in clinical research, 

Center for Drug Development and Clinical Trials at Roswell Park Cancer Institute 

 have formed a new collaborative training program specifically tailored to this growing group of investigators. The partnership will include a three-day clinical research workshop, "Reducing Cancer Disparities Through the Training of a Diverse Workforce," for minority physicians across the country. Workshops will begin in spring 2014 and will run through 2016. 

According to an Eli Lilly press release, there are approximately 10,400 oncologists in the United States, but approximately 1 to 2% are African American and approximately 2 to 3% are Hispanic. The goal of the new initiative is to train 75 to 150 oncologists in the conduct of clinical trials. The  goals of the workshop include: enhancing clinical research in minority and underserved populations through development of a cadre of well-trained minority investigators; educating participants about the principles of good clinical trial design and providing the necessary tools required to conduct trials that are relevant to minorities and under-represented populations; guiding participants to identify various challenges of clinical research, particularly in minority and underserved populations, and providing advice and education on how to overcome these challenges; providing ongoing mentorship to young minority investigators through career-long relationships with workshop faculty; and reducing cancer health disparities through increased clinical research targeting minority and underserved populations. Organizers are targeting minority physicians and senior fellows who have cancer-related subspecialties in medical, hematologic, radiation, pediatric, surgical, and gynecologic oncology. Faculty in the first five years of their academic appointments and those working full-time at an academic institution or practice with a track record of enrolling patients in cancer clinical trials may apply to participate in the workshop. 

 (GSK) it has increased its commitment to the 

 to provide vaccines to developing countries. The company will provide an additional 240 million doses of Synflorix to developing countries over the next 10 years to help protect up to 80 million more children from pneumococcal diseases such as meningitis and pneumonia. GSK has committed to provide the additional 240 million doses of Synflorix to GAVI at $3.40 per dose. To date, more than 50 million doses of the vaccine have been delivered to GAVI countries, including Uganda, Mozambique, Madagascar, Kenya, Ethiopia, and Pakistan. Zambia is the most recent country to include the vaccine in its national immunization programme under the AMC in July 2013.

The additional commitment builds on the 480 million doses of the vaccine that GSK has already committed to GAVI through the Advance Market Commitment (AMC) framework, which is designed to bring heavily discounted vaccines to children living in the developing world. GSK provides GAVI with a several vaccines, including Synflorix which protects against pneumococcal disease; Rotarix, which is a vaccine for rotavirus, a common cause of diarrhea; Cervarix, which helps protect against cervical cancer caused by human papilloma virus; and a combined vaccination for diphtheria, tetanus, pertussis, hepatitis B and Haemophilus influenzae Type b, With this new vaccine supply agreement extension, GSK is committed to provide more than 850 million vaccine doses that will help protect up to 300 million children and adolescent girls in the developing world from these diseases by 2024. 

 has invited 60 students from international universities in 21 countries to its headquarters in Switzerland for the International Biotechnology Leadership Camp (BioCamp). Over the course of three days, students will gain first-hand experience of starting a biotechnology company as well as developing and launching an innovative healthcare product. This year's BioCamp focuses on the company's innovation efforts in new business approaches to the healthcare industry. Some of the company's g outcome-based business models include collaborations with payors on pricing arrangements, patient-compliance programs as well as online support and education. 

 formed a development and licensing agreement with Biological E Limited (BioE), a biopharmaceutical company based in India, for two vaccines to protect against typhoid and paratyphoid fevers. The agreement advances the Novartis goal to deliver accessible and affordable vaccines that address unmet medical need in endemic regions. Under the license, the Novartis Vaccines Institute for Global Health (NVGH), part of the Novartis Institutes for BioMedical Research, will transfer technology to BioE, which will have financial and operational responsibility for manufacturing, further clinical development, approval, and distribution in the developing world. The typhoid vaccine (Vi-CRM197) has achieved proof of concept, had successful Phase II results, and will be transferred to BioE. A combined typhoid-paratyphoid vaccine will be transferred once proof of concept is completed through early, small-scale studies in humans to determine safety and immunogenicity. 

 has signed a new supply agreement with the GAVI Alliance regarding the signing of a new supply agreement for Pfizer to provide additional doses of Prevenar 13 (pneumococcal polysaccharide conjugate vaccine [13-valent, adsorbed]), the company’s 13-valent pneumococcal conjugate vaccine, for use in infants and young children to help protect against pneumococcal disease in developing countries under the terms of the Advanced Market Commitment (AMC). Under the terms of the new supply agreement, Pfizer has committed to supply the United Nations Children's Fund (UNICEF) with up to 260 million doses of Prevenar 13, at a reduced tail price, over the course of the agreement period (through 2025). This amount is in addition to 480 million doses of the vaccine already committed through the first two supply agreements. The tail price is the reduced price per dose set by the manufacturer and paid by GAVI; the remaining amount is paid by the AMC. Pfizer will offer Prevenar 13 through the AMC at the reduced price of $3.40 per dose for the remainder of this year, at which time the price will further decrease to $3.30 per dose for the remainder of the agreement. This pricing will apply to doses purchased under all AMC supply agreements. 

Pfizer entered into the first supply agreement to participate in the AMC in March 2010, and then expanded its commitment through a second supply agreement in 2011, pledging to supply Prevenar 13 through 2023. Since Pfizer’s original agreement with the AMC in 2010, more than 20 countries have introduced Prevenar 13 into their immunization programs, and pneumococcal vaccines are expected to reach more than 50 GAVI-supported countries by 2015. 

 have formed an agreement to increase access to Roche’s Valcyte (valganciclovir), a key medicine to treat cytomegalovirus (CMV). CMV is a viral infection that can result in loss of vision and greater risk of death in people living with HIV. This infection affects around 1 in 10 people living with HIV in low-and middle-income countries. The supply agreement between the Medicines Patent Pool and Roche will improve access to Valcyte– by making it up to 90% cheaper in 138 developing and emerging countries than it is currently available. The Medicines Patent Pool and Roche will consider adding more countries to the initial scope if there is a need and will also explore licensing and technology transfer as a second step to help local production of Valcyte and increase access to Valcyte in developing countries. 

, reports that one of its quadrivalent vaccines to prevent invasive meningococcal disease has been prequalified by the World Health Organization (WHO). The prequalification procedure accepts Menomune vaccine for purchase by United Nations Agencies. The UNICEF supply division has been notified of Menomune vaccine’s acceptance by the WHO. The purpose of the United Nations prequalification assessment is to provide assurance that candidate vaccines meet WHO recommendations on quality, safety and efficacy, including compliance with WHO’s recommended standards for GMP and good clinical practice. This Menomune vaccine prequalification was performed through a streamlined procedure in which the WHO worked closely with FDA. 

Menomune vaccine is designed for active immunization against invasive meningococcal disease caused by Neisseria meningitidis serogroups A, C, Y, and W 135 for use in persons two years of age and older. It is the first quadrivalent meningococcal vaccine prequalified by the WHO. The WHO notification to UNICEF states that following the evaluation of consistency of final product characteristics, GMP, and quality system audits of the manufacturing facilities, and followup of implementation of recommendations made by WHO reviewers during the evaluation, the Menomune vaccine is acceptable. It is manufactured at Sanofi’s facility in Pennsylvania. 

CSR and Sustainability Forum

A roundup of developments in global health and sustainability from the bio/pharmaceutical industry, its suppliers, and other public and private organizations.

Pharma News in Global Health and Sustainability

	The vaccine industry, particularly, in major Western markets, continues to be dominated by a few major, long-established players that primarily manufacture aging, long-marketed, non-recombinant (nongenetically engineered) vaccines. The industry, however, will be changing in the coming years and this change may come rather rapidly. According to BioPlan's recently released analysis of 10-year industry trends (1), a confluence of technological advances in bioprocessing is making vaccine manufacture cheaper, faster, and simpler. These advances include:

		Single-use systems (SUS)/disposable bioprocessing systems

		Modular/transportable bioprocessing facilities

		Novel expression systems/improved cell lines

As these technologies advance and are increasingly adopted for commercial-scale manufacturing, the industry will see an evolution in vaccine manufacture. Significant improvements are now commonly being reported as companies develop, adopt, and adapt bioprocessing technologies to vaccine manufacture.

BioPlan's 10th Annual Report documents increasing adoption of these technologies and their impact on biopharmaceutical manufacturers. Survey data show that bioprocessing at pre-commercial scales, such as manufacture for clinical trials, is now thoroughly dominated by SUS (i.e., disposables) use. This increase included 78% of those surveyed reporting current use of SUS bioreactors and 92% using SUS filter cartridges at some level in bioprocessing (see 

SUS have moved into large-scale vaccines manufacture more slowly, partly due to the demands for large-scale equipment. In the BioPlan study, vendors were asked if they provide sufficiently scalable single-use disposables and techniques. Overall, 53% of the industry considers scale to be a significant adoption restriction. And vaccine manufacturers place inability to scale up SUS devices high on the list of concerns. SUS involve one-time use of bioprocessing equipment composed of plastics, not traditional stainless steel. SUS allow flexible manufacture when, and at the scale needed, with substantial reductions in costs and time, including presterilized equipment. In contrast, stainless-steel bioreactor-anchored facilities require costly and complex infrastructure, which further includes complex piping, including steam used for sterilizing stainless-steel equipment so it may be reused, which adds weeks to batch turnaround time.

	Currently, SUS bioreactors top out at 2000 L, with many engineering challenges (e.g., weight) when larger. Where this does not provide sufficient manufacturing capacity, multiple parallel SUS process lines can be implemented. With advancing SUS technology, better plastics and new designs are being developed using SUS (vs. stainless steel) for their application in precommercial R&D, clinical-trial-material supply, and commercial manufacture. This use of SUS is projected to result in the market (primarily US and EU) for SUS equipment at a commercial scale growing 1000% in five years to $1.5 billion/year (2).


	Going modular is the next advancement in bioprocessing hardware. It is closely related to the adoption of SUS technologies and involves housing SUS bioprocessing equipment within their own cleanroom cabinets-whether portable prefabricated trailers or equipment sealed within dedicated isolator cabinets-with these increasingly designed for plug-and-play simplicity. Bioprocessing facilities that formerly required years for planning and construction can be brought on line in a matter of months or even weeks. SUS have become common in less than a decade, in as short as 5 or 10 years; however, we may comparably be talking about industry widespread adoption of flexible bioprocessing modules and plug-and-play factories. Vaccines are expected to be one of the first product sectors affected by this trend. Modular technology will accelerate worldwide proliferation of vaccine manufacturing, including transfer of bioprocessing to lesser-developed countries. Even easier than with SUS process lines, modular systems allow whole plants to be essentially cloned, potentially allowing cGMP manufacture in many developing countries. Many foreign countries are and can be expected to demand local vaccine manufacture, particularly once modular facilities become commonplace, and equipment vendors plan to actively pursue this market.

	Companies developing modular systems for vaccine manufacture include G-Con, which is working with partners, including Sartorius Stedim Biotech and GE/Xcellerex. For example, Project GreenVax, a private

public consortium, is currently constructing an influenza vaccine manufacturing facility (to be operated by G-Con, developer of the modular units being used) in Texas for manufacture of recombinant tobacco plant-expressed influenza vaccines, with a projected final scale capacity of 100 million doses per month [1.2 billion doses/year], according to company projections and production costs of pennies/dose compared with conventional dollars/dose for conventional egg-culture manufacturing. The Project Greenvax influenza vaccine-manufacturing facility, subsidized by biodefense funding, uses single-use equipment, housed within plug-and-play-type modular trailers, using tobacco plant expression technology. Medicago and other companies are also developing vaccines using tobacco-plant expression.


	Improved versions of currently-predominate expression systems (i.e., genetically-engineered cell lines such as Chinese hamster ovary [CHO], yeast, and 

) for recombinant protein expression are further making vaccine manufacture easier and cost-effective and reducing the scale and investment required to manufacture products. The BioPlan annual survey of bioprocessing professionals and other studies show a rather consistent doubling of mammalian-cell protein expression and product yield about every five years, with yields now typically in the upper 2-3 g/L (bioreactor volume) range. Newer expression systems coming on line promise even higher yields and/or cost-effectiveness, with yields of more than 30 g/L being reported. These upcoming systems include plants (both laboratory-grown and field-grown), such as from iBio (Newark, DE); transgenic animals; PER.C6 and other novel high-yield human-cell lines; and various bacteria other than the usual 

 Using the same manufacturing systems and culture media, these new systems produce the same amount of product at commensurately lower cost and often much faster. This higher yield has lead to US biodefense programs providing R&D support for diverse vaccine-expression systems.

	Thus, the same equipment can essentially be used to manufacture twice as much product as what was possible only about five years ago. These improvements, however, come amidst intense regulation as major changes in products' bioprocessing are only implemented for new bioprocesses/products as they are developed with established processes rarely undergoing major changes. Upcoming new bioreactor technologies will further increase vaccine-manufacturing flexibility and reduce costs. This includes perfusion. Capillary hollow fiber perfusion bioreactors being developed by FiberCell Systems, for example, are expected to comparably produce up to 1000 x (based on bioreactor size) the output from conventional bioreactor (e.g., a 50-L desktop perfusion bioreactor matching the overall output of a 5000-L bioreactor).


	Novel purification technologies are also in development. These improvements are much needed, as advances in upstream manufacturing (everything through product formation in the bioreactor) causing capacity constraints and problems, because later downstream processing, primarily purification, have not advanced as rapidly as expression systems, and other upstream technolgies have. The BioPlan study shows that many facilities are considering upgrading (i.e., adopting, new purification technologies). This trend includes 54% considering high-capacity chromatography resins; 44%, single-use filters; 38%, automated buffer dilution systems; and 35%, single-use tangential flow filtration. Other advances being adapted for large-scale use include simulated moving bed chromatography systems and membrane filters, which are starting to replace chromatography columns. Cast-in-place "monolithic" chromatography media, rather than labor-intensive packing of columns, are yet another example of improvements approaching adoption for commercial-scale manufacture.


	Further practical advances and synergies can be expected when these technological advances are combined, thereby resulting in simpler, cheaper, and transportable vaccine manufacturing. A number of other vaccines currently in the development pipeline are being manufactured in SUS, are being developed for manufacturing using modular units, are using novel, higher-yield expression systems, and/or are adopting newer purification technologies. Besides federal biodefense programs funding, many of these efforts are independently funded or also being funded by PATH and other vaccine development-oriented philanthropic organizations.

	The confluence and combination of ongoing bioprocessing technological advances will increasingly enable manufacture of vaccines quicker, simpler, and at significantly-reduced costs, often just pennies/dose, with many future vaccines likely to be sold at prices that are comparable or even below current manufacturing costs.

is senior director, Technical Research, at BioPlan Associates. 

 is president of BioPlan Associates, tel. 301.921.5979, elanger@bioplanassociates.com and a periodic contributor to 

10th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production

Outsourcing

Advances in techniques and single-use systems are revolutionizing vaccine manufacturing.

Bioprocessing Advances in Vaccine Manufacture

Mitigating employee turnover and improving employee retention rates are important objectives of any business, but it is particularly important for contract services providers, which seek to present stable operations to prospective pharmaceutical customers. A recent survey of employee retention and compensation patterns among CROs shows difficulties in the CRO industry as a whole to limit employee turnover. 

Preliminary results from a recent survey by HR+Survey Solutions, a compensation consulting and research firm, showed that CROs continue to struggle with ways to retain talent, according to an Aug. 19, 2013 HR+Survey Solutions press release. The initial findings of an HR+Survey Solutions study reveal that the employee turnover rate at CROs based in the United States remained stagnant in 2012 with 18.6% of employees leaving their companies in 2012 compared with 9.7% in 2011. The turnover rate among CROs outside of the US increased from 17.8% in 2011 to nearly 22% in 2012. The survey examined 20 public and private CROs with sizes ranging from firms with employees of fewer than 500 to organizations with more than 12,000 employees. Compensation data was collected and analyzed for 34 countries worldwide in addition to the US. The high turnover was found among all types of positions from clinical monitoring to data analysis. Project managers were an exception, however, with this group of employees experiencing a decrease in turnover from 21% in 2011 to 10.5% in 2012. 

Although turnover rates remained high in 2012, the use of bonuses by CROs to attract and retain talent increased in 2012, according to the survey. There was a nearly 25% increase in companies that used recruitment bonuses (65% in 2011 and 88% in 2012). In addition, more companies used bonuses to retain talented employees. Fifty‐three percent of companies reported using retention bonuses in 2012 versus 29% in 2011. Companies reported using recruitment bonuses at salaries less than $60,000, and 30% of the companies used them for nonexempt employees.

“We often think of recruitment and retention bonuses being used at the top of the house, but in this tough job market, more and more companies are experimenting with bonuses to attract and retain employees at lower levels,” said Judy Canavan, partner, HR+Survey Solutions, in the company release. “And, with almost all companies planning to implement bonuses in 2013 (87% recruitment and 78% retention), the trick is for them to design the bonus program to meet the needs of the organization. This could mean including time or performance triggers,” she said. 

The annual comprehensive survey reports compensation levels (base salaries plus annual and long-term incentives), employee turnover, annual and long-term incentive plan design, deferred compensation, benefit plans, and perks for 139 benchmark positions in 11 job families, including executive, biostatistics, business development/sales, clinical research, database management, medical affairs, patient recruitment, quality assurance, regulatory, safety/pharmacovigilance, and onsite operations. 

The issue of talent retention, as reported in the 2013 HR+Survey Solutions survey, continues a trend from 2012. The CRO industry experienced a 12.5% voluntary separation (left for new position with higher compensation and/or greater opportunity) rate in 2012 as compared to a 1.5% national voluntary turnover rate based on US Bureau of Labor Statistics, according to a Mar. 28, 2013 HR+Survey Solutions press release. The 12.5% voluntary turnover rate was for all types of positions at CROs, but this figure was even higher for other positions. There was a 24.2% voluntary turnover rate of clinical research associates, according to the 2012 survey. Nearly 20% of project managers, and 13% of data managers left their jobs voluntarily. 

Despite a fragile economy, employment in the CRO industry remained strong in 2012 with companies implementing sign-on bonuses to attract talent. The 2012 survey reported that 65% percent of CROs use sign-on bonuses to attract new talent, but  less than one-third (29%) use retention bonuses to retain employees.

According to HR+Survey Solutions, high employee turnover rates can be particularly damaging to CROs as pharmaceutical companies assess their turnover rates when making decisions about outsourcing clinical trials.Additionally, the study found that the target annual incentives and projected long-term incentive (LTI) levels are markedly lower for CROs as compared to other industries. CRO industry executives with salaries of $250,000 were eligible for, on average, a target annual incentive of 26% of their salary and an LTI of 35% whereas similar executives in other industries were eligible for annual incentives and LTIs of 44% and 51%, respectively. Although the majority (90%) of executive-level employees (senior vice-presidents and vice-presidents), were eligible for annual incentives, only 50% actually received bonuses, according to the 2012 HR+Survey Solutions survey. Approximately 40% were eligible for LTIs, but only about 35% to 40% received a grant. At the manager level, 65% were eligible for annual incentives while 45 percent received bonuses. Six percent were eligible for LTIs, and only 2% received them.

A recent survey shows that talent retention is an issue on industry level for contract research organizations (CROs), particularly for CROs located outside the United States.

PTSM: Pharmaceutical Technology Sourcing and Management-09-04-2013

Amgen’s Acqusition of Onyx Leads Biopharmaceutical Dealmaking in 2013

Pharma News in Global Health and Sustainability

Bioprocessing Advances in Vaccine Manufacture

CROs Face Issues with Talent Retention