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Spring 2015 Survey of Biopharmaceutical Sponsors

Tuesday, May 19, 2015

To monitor the broad trends in pharmaceutical outsourcing and identify changing attitudes about the leading vendors, William Blair healthcare analysts have conducted several industry surveys over the past decade. For the spring 2015 survey healthcare analysts John Kreger and Amanda Murphy partnered with Life Science Strategy Group, a leading consultancy specializing in new product planning and commercialization strategy to a variety of life science markets. The 133 respondents from whom they gathered data were spread fairly evenly among large ($1 billion or more in annual R&D spending), midsize (between $50 million and $1 billion), and small (less than $50 million) biopharmaceutical companies, and across functional areas—preclinical only, clinical only, and both preclinical and clinical. Survey questions were generally geared toward R&D spending trends and the factors affecting outsourcing strategy, outsourcing penetration rates, and strategic partnerships.

Key conclusions from the survey included:

R&D growth expectations decline slightly, but remain in the low single digits. In aggregate, survey participants expect 2015 R&D spending growth to be about 3.6%, which is 2.4 percentage points below our fall survey results but in line with the spring 2014 survey. Overall R&D growth remains in the low to midsingle digits over the long term.

The number of projects is increasing, but at a slower rate. The percentage off all respondents that expected the number of active projects being funded to increase in 2015 declined from the fall 2014 survey, given the strong growth in 2014.

Outsourcing penetration is stabilizing, but has room to go. Based on data from our past six surveys (30 months of data), there has been a steady increase in the outsourcing penetration rates in each phase of development. “We are intrigued with the trend toward less current outsourcing in late-stage development from large pharma sponsors and will keep an eye on this trend in the coming quarters,” said Kreger.

Leveraging data is a key to enhancing R&D productivity. The vast majority of survey respondents suggest that their respective R&D organizations have been restructured to a certain extent. According to 44% of respondents, the largest remaining opportunity to boost R&D productivity is improved use of existing data. Murphy stated “it appears clients are intrigued with the idea of combining lab data and clinical development capabilities.”

For more information on this or any of the past CRO surveys or any of the companies on John Kreger’s and/or Amanda Murphy’s coverage list please contact your William Blair representative.