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CROs are keeping pace with the increased globalization of the biopharmaceutical/pharmaceutical industry through a combination of acquisitions, partnerships, and select investments.
The increased globalization of the pharmaceutical/biopharmaceutical industry is reflective not only in the major players' shifting patterns of revenue growth from established to emerging markets, but also in their drug-development activities, including clinical research. Although the United States and Europe still account for a dominant share of global clinical-trial studies, Asia, particularly China, continues to rise in importance as a location for clinical research. As the number of clinical trials increase in Asia and other emerging markets in Latin America, the large CROs are too expanding into these markets using a combination of acquisitions, partnerships, and select internal investments.
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Evaluating the numbers
Clinical research is becoming increasingly global in nature. Although the United States and Europe still represent the dominant destination for clinical studies, Asia and Latin America also are rising in importance as a location for clinical trials. ClinicalTrials.gov a public registry of clinical-trials information for federally and privately funded trials conducted under investigational new drug applications maintained by US National Institutes of Health, identifies 139,372 registered clinical studies in the US and 182 countries, according to data as of Jan. 25, 2013. US-only sites accounted for 41% of registered studies, and non-US only studies 43%. Six percent of registered studies are in both the US and outside the US, and in 9% of the studies, the location was not specified. The US and Canada combined account for 77,030 studies or 53.3% of the global total registered in ClinicalTrials.gov and Europe accounts for 37,454 or nearly 27%. East Asia (including China, but excluding Japan) has 11,954 studies or 8.6% of the global total, and Southeast and South Asia a combined 5320 registered clinical-trial studies or 3.8% of the global total, according to ClinicalTrials.gov. Mexico, Central America, and South America collectively have 8332 or 6.0% of the global number of registered clinical studies.
As the globalization of clinical trials continues, the major CROs are expanding their operations in Asia and South America. In January 2013, Charles River Laboratories acquired a 75% ownership of Vital River, a commercial provider of research models and related services in China. For the past 10 years, Vital River has been a licensee for production and distribution of Charles River's research models in China. The agreement provides an option for Charles River to acquire the remaining 25% of Vital River at a later date. As part of the Vital River acquisition, Charles River will be the exclusive global partner for distribution of model-creation services offered through Beijing Vital Star Biotechnology. The services of Beijing Vital Star Biotechnology include humanized model creation using inducible pluripotent stem cell and other technologies.
In June 2012, Quintiles announced its plans to establish a Quintiles regional headquarters for China in Shanghai and expand laboratory-testing capabilities in China, which includes a partnership with Shanghai Clinical Research Center (SCRC). Under a joint-venture agreement, Quintiles will engage SCRC to provide laboratory-testing services to local customers. Founded under the collaborative framework of the Ministry of Science and Technology and Shanghai Municipality in 2008, SSCRC is a full-service clinical research center in China. To provide the infrastructure for its growth strategy in China, Quintiles is investing $14 million to establish a new 4000-m2 headquarters in Shanghai to serve China and nearby Asian countries. The facility is expected to accommodate more than 450 employees in the next five years. The Quintiles–SCRC collaboration follows the 2011 launch of Kun Tuo, a Quintiles' CRO that serves local and global biopharmaceutical companies in achieving successful registration of medicines in China. Quintiles began operations in China in 1997 and now has existing offices in Beijing, Dalian, Hong Kong, and Shanghai.
Quintiles is expanding elsewhere in Asia. In October 2012, Quintiles began its first global study involving Indonesia, made possible by an exclusive alliance with Prodia Clinical Laboratory for in-country testing of samples from Indonesian patients in clinical trials. In an Oct., 24, 2012, press release, Quintiles noted prior to its partnership with Prodia that Indonesia had been difficult to include in global trials because of requirements that all local samples be tested in-country before samples or data could be exported. In November 2011, Quintiles announced an exclusive partnership with the Jakarta-based Prodia Clinical Laboratory, through its sister company Prodia, which gave Quintiles exclusive access to Prodia's central laboratory for a two-year period.
To enhance its bioanalytical service offerings in Asia, Quintiles formed, in December 2012, an exclusive partnership with BioCore, a Seoul, Korea-based bioanalytical CRO. BioCore is a provider of bioanalytical liquid chromatography–tandem mass spectrometry. Under the agreement, BioCore will provide its services to Quintiles exclusively for a two-year period. Quintiles' growing global bioanalytical capabilities began with its acquisition of Advion BioServices in 2011. In July 2012, Quintiles opened a global commercial solutions business in Brazil. Quintiles had earlier expanded its global commercial solutions business into Russia, the Middle East, and North Africa.
In 2012, Covance reported that its early-development facility in Shanghai, China received a good laboratory practice certificate from China's State Food and Drug Administration. The Covance facility in Shanghai provides nonclinical safety assessment, bioanalytical, in vivo pharmacology, and drug metabolism and pharmacokinetics (DMPK) services. Covance opened the facility in August 2010.
PAREXEL opened a customer-care office in Shanghai in December 2012 for Perceptive Informatics, a subsidiary of PAREXEL and eClinical solutions provider. In November 2012, PAREXEL formed an alliance with the National Taiwan University Hospital to provide drug-development services in Taiwan. Earlier in 2012, PAREXEL was chosen by the Korea Drug Development Fund (KDDF) to serve as the fund's CRO. The KDDF is a consortium of three health-related Korean ministries: the Ministry of Knowledge Economy, the Ministry of Education, Science and Technology, and the Ministry of Health and Welfare. KDDF was established in September 2011 with assets of $1 billion to develop at least 10 new drugs by 2019 for the global market. The alliance with KDDF follows PAREXEL's 2012 collaborative research agreement with the ASAN Medical Center based in Seoul.
In October 2012, ICON and the Korea National Enterprise for Clinical Trials (KoNECT) formed a partnership to advance the clinical-trials industry in South Korea. Through the agreement, ICON and KoNECT will collaborate on a series of educational events for local and multinational pharmaceutical companies, investigators, and industry officials. KoNECT was established in 2007 with the support of the South Korean government, academic institutions, and life-science industries to provides clinical-research resources, training, and support.
In February 2012, ICON completed its acquisition of BeijingWits Medical Consulting, a CRO in China with staff located in Beijing, Shanghai, Chengdu, Guangzhou, Wuhan, and Hong Kong. The company provides services for Phase I to Phase IV clinical studies to global and local pharmaceutical, medical device, and biotechnology companies. Also, in 2012, INC Research opened a facility in Seoul, South Korea. INC Research provides Phase I to IV clinical development services in the Asia/Pacific region with coverage across China, India, Australia, Singapore, Philippines, South Korea, Taiwan, Hong Kong, Malaysia, Thailand, and New Zealand.
The CROs WuXi PharmaTech and PRA signed a joint-venture agreement in December 2012 to offer a broad platform of Phase I–IV clinical trial services in China, Hong Kong, and Macau. The joint venture will provide services, including clinical-trial monitoring, project management, regulatory strategy and submissions, data management, biostatistics, drug-safety reporting, and medical monitoring. The clinical operations of WuXi and PRA in China will combine to operate as an independent CRO and will be jointly owned by their respective parent companies. WuXi will contribute clinical and regulatory experience to the joint venture from its China-based clinical organization. That organization covers all regions of the country and has employees working in 16 Chinese cities, with offices in Shanghai, Beijing, and Guangzhou. WuXi also will supply laboratory services to the joint venture through a preferred-provider arrangement. PRA will support the joint venture on with its global expertise and staffing and with its China-based staff and global technology capabilities, encompassing data capture, trial management, and other information-technology systems. The companies will market the joint venture's services to their respective customers. In February 2012, PRA also opened an office in Singapore for PRA's central clinical operations location for the region.
Sidebar: Partnerships in drug development in China: AstraZeneca and WuXi AppTec
Biopharmaceutical/pharmaceutical companies partner with CROs in emerging markets for various reasons. Access to large pools of patients or targeted patient populations important to the development of a particular drug and potentially lower costs comparative to Western-based CROs are some common reasons. As emerging markets, however, become increasingly important in the revenue position of the major companies, partnering with domestically domiciled contract services providers also provide biopharmaceutical/pharmaceutical companies a way to access local markets.
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The use of such partnerships as a vehicle for pharmaceutical/biopharmaceutical companies to access local markets is evident in a recent partnership between MedImmune, the biologics arm of AstraZeneca, and the China-based CRO WuXi AppTec, to advance a biologic-based drug being developed by AstraZeneca.
In September 2012, MedImmune and WuXi AppTec formed a joint venture in China to develop and commercialize MEDI5117, a novel biologic for autoimmune and inflammatory diseases. Under the agreement, MedImmune is providing technical and development expertise, and WuXi AppTec is providing local regulatory, manufacturing, preclinical, and clinical-trial support. When undertaking clinical-trial development in China, the government requires local manufacture of medicines that have not been approved in other markets. The joint venture will control the development of MEDI5117 for autoimmune and inflammatory diseases in China, and the two companies will have equal ownership in the joint venture. AstraZeneca/MedImmune will have the option to acquire the full rights to commercialize MEDI5117; otherwise, the joint venture will have the right to commercialize the product. WuXi AppTec will earn revenue based on services provided to the joint venture. MedImmune will receive various milestone payments as the program progresses.
MEDI5117 is a fully human monoclonal antibody that depletes IL-6 and bears MedImmune's proprietary half-life extending mutation (known as the "YTE" technology) designed to give a long duration of action. IL-6 is known to be an important mediator in the production of inflammation and pain in a variety of disease states. MEDI5117 is currently in Phase I in the US and Europe. In China, a local investigational new drug application will be filed for MEDI5117, and following that process, Phase I trials will be initiated.
Sidebar: CROs form public–private partnerships to advance clinical research
Public–private partnerships are increasingly an important piece of the drug-development paradigm. These alliances provide value for CROs in helping to secure patients for clinical research, and the research entity, private or public, in advancing clinical research. Several CROs recently have announced such partnerships.
In January 2013, Covance formed a five-year exclusive agreement with the Royal Liverpool and Broadgreen University Hospitals NHS Trust for early clinical research. The Royal Liverpool and Broadgreen University Hospitals NHS Trust is one of the largest and busiest hospital trusts in northern England, with an annual budget exceeding £400 million ($631 million). Earlier in 2012, Covance, the French National Institute of Health and Medical Research's (Inserm) subsidiary Inserm Transfert SA, and the seed-investment company Inserm Transfert Initiative formed a multiyear scientific collaboration agreement for R&D. Under terms of the agreement, Covance will conduct discovery and early-development studies, using its capabilities, including those at its facilities in Porcheville, France, and Alnwick, United Kingdom, for projects managed by Inserm Transfert, the knowledge-transfer company of Inserm, and preclinical studies for start-ups within Inserm Transfert Initiative's portfolio. These Inserm Transfert Initiative companies will also gain access to the scientific, operational, and program-management expertise from Covance.
In September 2012, the CRO -Pharmaceutical Product Development (PPD) and the Global Allergy and Asthma European Network e.V. (GA2 LEN) formed a strategic alliance in which GA2 LEN will provide PPD access to the network's allergy and asthma experts and to more than 100 allergy and asthma sites in Europe. GA2 LEN is a multidisciplinary research network addressing all aspects of allergic diseases with a view to reducing the burden of allergy and asthma.
In return, the alliance will enable GA2 LEN to increase the amount of research it conducts in allergic diseases,as well as provide the network with earlier access to new medical therapies to help accelerate their development. PPD and GA2 LEN will work to reduce allergy and asthma study start-up times, increase the number of patients recruited for clinical trials, and ensure the availability of resources and training to increase the number of physicians and support staff conducting research.
In early 2012, PPD also formed a alliance with the Scottish government through NHS Research Scotland, part of the United Kingdom's National Health Service (NHS), to increase the amount of clinical research conducted in Scotland. PPD will work closely with the major health boards across Scotland to further reduce study start-up times, streamline regulatory approval processes, increase the number of patients recruited for clinical trials, and ensure the availability of resources and training to increase the number of physicians and support staff conducting research. The initiative covers a broad range of Phase I-III trials across multiple therapeutic areas, as well as biosimilar and post-approval studies.
Quintiles also formed a strategic partnership in Scotland with four teaching health boards in Aberdeen, Dundee, Edinburgh, and Glasgow as part of its prime site program, which engages researchers and investigators in clinical research. The partnership builds on Quintiles' experience in working with NHS Scotland's four university-based academic research centers in Aberdeen, Dundee, Edinburgh, and Glasgow. As part of the partnership, Quintiles will introduce technology that uses electronic health records to improve health outcomes.