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(NCEs) and biosimilars, respectively. Generics and NBEs are also the focus of the greatest number of medium-sized firms (65% each), but nearly as many of these companies also have NCEs in their pipelines, with the fewest focusing on biosimilars (51%). Small companies, however, focus largely on NCEs (71%), with approximately 50% of companies also having generics and NBEs in their current or future pipelines, but just 39% involved in biosimilar development. The spread for emerging companies is different again, with close to 50% of companies developing NCEs, generics and NBEs, and just 29% targeting biosimilars.

Some trends can be noted here. The percentage of companies outsourcing to CROs for NCE-related projects declines as the company size increases (34%, 28%, 25%, and 20% for emerging, small, medium and large firms, respectively). On the other hand, the percentage of companies partnering with CROs for generics and NBEs are similar regardless of company size. Finally, fewer emerging and small companies focus on biosimilars than medium and large companies.

Outsourcing Needs and Preferences

Interestingly, company size does not seem to influence the types of services that sponsor companies outsource to CROs. On average, 80%, 76% and 38% of respondents to the 2016 Nice Insight CRO survey use preclinical, clinical trial and miscellaneous (environmental testing, regulatory support, animal models, etc.) services, respectively, and this pattern is typical for emerging, small, medium and large firms.

Within each service category, however, there are different preferences. For large and medium companies that use preclinical trial services, bioanalytical and analytical testing were mentioned most often by survey participants; followed closely by chemistry/stability testing, biostatisitcs and toxicology. For emerging companies, on the other hand, chemistry/stability testing is used most often and by a wide margin, followed distantly by bioanalytical testing and general toxicology services. Chemical/stability testing was also mentioned most frequently by respondents from small firms, with bioanalytical testing and biostatistics the next most used services.

When it comes to clinical trial services, large, medium and emerging sponsor companies seek assistance from CROs for clinical trial design. Small companies most often seek data management support, with clinical trial design services a distant second. Finally, large, medium and small companies are more likely to seek special services form contract research service providers than emerging companies.

The reasons for outsourcing research activities also vary based on company size. Improving quality is the main driver based on the overall 2016 Nice Insight CRO Outsourcing Survey results. However, improving quality is the top motivator only for large and medium sponsor companies. Small companies turn to contract research providers to improve efficiency, while emerging companies seek to partner with CROs because they lack in-house capabilities. Interestingly, the greatest source of dissatisfaction for large and emerging companies is poor product/service quality, while for small and medium companies cost overruns are seen as the top negative factor in an outsourcing

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relationship. On the other hand, regardless of size, sponsor firms will switch to another CRO if they believe they will receive better quality. Better price is the second motivating factor for large, medium and emerging firms, while better timelines are the second most important driver for change by small companies.

It is also noteworthy that many more emerging pharma companies are interested in forming tactical partnerships than strategic partnerships, while small companies are equally interested in tactical and preferred partnerships, medium-sized sponsor firms look for preferred partnerships and large companies seek preferred and strategic partnerships.

Expectations All Positive But Variable

Survey respondents have significant expectations for increases in outsourcing spending, however the numbers do vary as a function of company size. The results of the survey indicate that the largest percentages of large and emerging bio/pharma companies (29% and 37%, respectively) spend over $100 million annually on contract research services, while the largest portion of medium and small companies spend $51-100 million/year (49% and 40%, respectively). In addition, while respondents from all different sizes of companies expect their expenditures to increase over the next five years, the anticipated level of increase rises from 66% to 79% as the size of the company decreases from large to emering. Interestingly, more respondents from large companies expect to see a decrease in spending on research services than those from smaller companies (9% vs. 3-4%).

The number of CROs used by sponsor firms is also expected to increase by respondents from companies of all sizes. Currently 74-79% of respondents from small, medium and large bio/pharma companies and 90% of survey participants from emerging pharma firms use up to 10 CROs. Slightly more respondents from large and small firms (66%) expect to increase the number of outsourcing partners they use than do survey participants from medium and emerging companies (62% and 63%, respectively).

The drivers for this expected growth also slightly differ. For medium and small companies, previous positive experiences are influencing the use of more outsourcing partners, followed by company strategies to move to a larger proportion of outsourced relationships in their supply chains (due to patent life issues, the need for new delivery forms and specialized technologies, decentralization, etc.). Strategy is the prime driver for large and emerging companies, followed respectively by positive experiences and a general increase in product portfolios.

To learn more about Nice Insight contact Guy Tiene, at Guy@thatsnice. com or and the annual study websites: clinical services at, contract development and manufacturing at, pharmaceutical excipients suppliers at and pharma- ceutical equipment (products, systems and services) at www.

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