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CRO Industry Perspective – July 2018

Data analytics and expanding post-marketing surveillance is driving growth.

Contract Research Organizations (CROs) provide R&D services to companies in the biotechnology, pharmaceutical and medical device industries, which outsource R&D activities to access capabilities not found in-house, manage R&D costs and improve efficiencies. According to Grand View Research, the global CRO market is expected to reach $45.2 billion by 2022. Though CROs were initially niche players in clinical research services, full-service CROs today provide a wide range of services that include discovery and preclinical development, clinical trial services, post marketing surveillance, data management and analytics, consulting, and often other commercialization services.

CROs are involved with every step in the drug development process. In the discovery stage, a lead compound is found to have the potential of a new medicine. This lead compound is then tested in preclinical trials, mainly in forms of in-vitro and in-vivo experimentation. In-vitro testing is done in the lab using inanimate research tools, while in-vivo tests are conducted on animals. The discovery and preclinical development market was worth $3.25 billion in 20161, representing 16% of the CRO market today. It is expected to grow annually by 8.3% to 20162.

If the lead compound successfully completes its pre-clinical studies, it moves into the clinic and into human subjects. A Phase I clinical trial usually involves a small group of healthy participants and focuses primarily on drug safety and dosage determination. After products are tested for safety, a Phase II trial is conducted to test effectiveness in a slightly larger group of ill patients. After safety and effectiveness have been established, Phase III trials, which are typically much larger studies, compare the safety and effectiveness of the new treatment to other available treatments. After successfully completing Phase III trials, the new product may receive FDA approval. Across the three phases, clinical trial services represent the largest component of the CRO market, worth $25 billion in 2017 and growing 7% annually, according to Beroe, Inc.3

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