The Bio-Pharma business model is undergoing radical changes. Over the last two decades, we have seen the biopharmaceutical industry gradually become more willing to look externally and embrace the concept of outsourcing as it looks for new sources of discovery and innovation.

This has provided the industry with greater flexibility in terms of sourcing work with companies that can provide the right expertise and capabilities. These changes are needed as technologies rapidly advance as well as economic and other pressures for healthcare and new therapies continue to increase.

Twenty plus years ago we first saw pharma companies look to contract research organisations (CROs) for help with the tactical elements of clinical trials when internal resources were strained.

As the efficiencies of outsourcing started gaining recognition and pharma companies began seeing these efficiencies as an opportunity to increase flexibility and contain costs while being still able to keep the same quality and turnaround times, they expanded their use of CROs to include preclinical safety work required to move a drug into the clinic. Services such as toxicology, pathology, in vitro and pharmacokinetic studies, provided biotech and pharma clients with the data they needed to determine the safety profile of potential new drugs.

The one area that had always been sacred was discovery – from early identification of a target or approach until the time a compound enters preclinical development. Discovery was seen as a hands-on, reiterative and very science-focused approach that was best done in-house. The industry spent billions of dollars on discovery and development, but this did not translate into a concomitant rise in the number of new therapeutics. The translation from discovery to clinic to market has not occurred. It was realised that while the science needed to change, so did the approach – resources, technology and expertise all needed to be more flexible. That, with increased regulatory, economic and other pressures created the perfect storm. As a result, the industry has begun to change and embrace the realisation that discovery could be externalised.

The past five years have seen an unprecedented downsizing of Big Pharma’s internal discovery efforts, which has led to externalisation and outsourcing of discovery. The industry must continue to replenish its pipeline and thus look externally for both innovation and execution. Pharma companies are beginning to strategically use CROs to streamline both speed and efficiencies for many aspects of drug discovery activities. Just a few years ago, this would have been considered a heretical concept; now, many pharmaceutical companies have come to trust the scientific expertise, rigour, and confidentiality of CROs for these early stages of drug discovery research. Instead of retaining everything in-house with the associated high fixed infrastructure costs, Pharma relies more on external sources for capabilities and expertise. The choice today is not so much whether to use CROs for discovery, but which CRO for which stage and for which area of expertise based on the company’s evolving needs.

The new faces of Pharma

Today, of course, large pharmaceutical companies are not the only organisations considering outsourcing discovery. Academics, smaller biotechs, start-ups and venture-backed and other virtual organisations (as well as hybrids of these) also are involved in various facets of drug discovery. Each of these organisations has their own strengths and gaps which they need to identify and address so that their projects and pipeline can move forward. Academia, for example, is a wellspring of inspiration, often achieving innovations that would be difficult if not impossible to generate in a large company or commercial environment. Yet academia does not typically have the resources nor the infrastructure required to impel an idea toward a rigorously validated regulated product. Likewise, smaller biotechs and start-ups, as well as academia, may not have access to the routine or robust assays to verify and qualify an asset that is needed to gain critical funding or move this to the next stage.

Venture Capital (VC) firms are investing in innovation and access to intellectual property with the intent to commercialise these innovations. In the past, this investment would be in infrastructure, equipment and teams of scientist to move the ideas forward. That is not the current trend. Today, VCs are using small and virtual teams that provide the flexibility and resourcefulness to move quickly to accomplish the tasks at hand. They are not burdened with the high costs associated with fixed resources and infrastructure. This trend is being adopted by Pharma as well. This includes their own internal discovery organisational structures which are now smaller and very focused around an approach or therapeutic area.

While Big Pharma shifts its business model to become more flexible and leaner, it must look externally to trusted partners who they can work with to address the gaps created from downsizing their internal efforts. Academic institutions as well as small and virtual companies all can have roles to play in this mix. Yet each of these organisations, in turn, can also benefit by tapping into the resources available from CROs – who can provide a robust and reliable set of capabilities and expertise to address their portfolio and programme needs. CROs can provide both activity-based as well integrated programme-based approaches to manage and co-ordinate the complex discovery and development stages required. This ranges from developing a specific platform to interpretation as well as identification of critical next steps.

Finding the right partner

Pharma companies realise that the right CRO partner can provide targeted expertise and capabilities when they need it. This includes profiling investigational agents in the appropriate in vitro assays and in vivo models as well as developing these in vitro assays and in vivo models. These activities integrate and combine a variety of approaches, technologies and platforms. For small and virtual organisations this is quite attractive as these capabilities and infrastructure are not cheap and easy to build, develop and maintain internally. Additionally, by providing robust, reproducible and translatable approaches and data with state of the art methods, the right CRO can offer a truly objective and unbiased assessment in a highly professional environment. This is very important when significant pipeline and investment decisions are involved in advancing discovery assets.

Large pharmaceutical companies have woken up to the fact that the innovation they require is often not found within their organisations. As Pharma downsizes – shuttering facilities and eliminating jobs – it is reaching out to academics, venture capitalists and small start-up companies to identify new thinking and new ways to discover and develop new medicines. This provides pharma and biotech companies with both a wider landscape and greater flexibility in terms of areas to explore, and frees up resources, capital and funds. With more freedom and flexibility, Pharma can then focus on the key areas for differentiation for which they are uniquely suited.

This ever changing landscape in pharma has created additional opportunities for CROs in the discovery space. Academics and virtual start-ups do not have the infrastructure or capabilities required to move projects through the early stages required to build confidence in a new potential therapeutic asset. The changing focus of pharma and venture capital firms has also created a funding gap. The lack of funding and resources in early drug discovery has been referred to as the ‘valley of death’. Organisations are looking for lean and efficient ways to get to proof of principle that helps them overcome this ‘valley of death’ so that they can get the required investments and funding to take their asset into the clinic. (Proof of principle is defined as that step where there is confidence in the validation of the target, pathway and approach including the identification of an investigational agent(s) which can be optimised for clinical studies.)

Instead of investing scarce dollars in buildings, infrastructure, equipment and people, small and virtual companies can partner with a CRO who is able to provide this expertise and infrastructure when it is needed so that they can confidently get the right science and capability at the right time to help drive these key decisions. A trusted CRO with a set of integrated capabilities can assume responsibility for many of the services new companies need. These capabilities range from target validation to candidate selection and can include assay platforms, pharmacology, biology as well as medicinal chemistry and biological agent optimisation alone or in combination with biology and pharmacology services and platforms.

Long have CROs been relied upon to perform many of the tasks required for preclinical safety and clinical studies. Today, there are CROs offering discovery services that can benefit large pharma, academics, or small companies alike, building the bridge from idea to proof of principle and beyond including therapeutically-focused approaches, as well as critical ADME and early safety studies. Working with these CROs provides the opportunity to leverage scarce funds to get the right data for critical early go/no-go decisions. By offering an ondemand staff of experts and capabilities in drug discovery and development, the right CRO can be looked to for their capacities and capabilities necessary to go from concept to proof-of-principle and even beyond including bridging studies for candidate selection, safety and post-IND studies.

While some vendors provide a select or focused set of services or assays, obviating the need to have that capacity in-house, there are other CROs who offer a more comprehensive, integrated and wider range of services. A CRO who can manage, analyse, integrate and interpret data to drive these decisions from hit to candidate selection and beyond can be a great asset to its drug developer partner by allowing the company to concentrate on their core assets rather than having to manage noncore operations that may be better outsourced. This often goes beyond mere service provision, to being a critical partner with the experience and expertise to help navigate critical decisions along the path from discovery to market.

What to look for in a CRO

No matter what the scenario in which a CRO is being engaged – whether it be to carry out a single specialised task, a set of activities, an entire discovery programme or something in between – there are several common factors that decision makers from virtual entities to global pharmaceutical companies should be looking for to assure themselves that they have found a CRO they can trust, and work with, to get the right service and the right science at the right time.

First and foremost, a CRO must demonstrate that it has true expertise and experience in drug discovery and development that go beyond just the technical capabilities at hand. The scientists and project managers at the CRO should have a history of real world drug development experience that allows them to truly understand the experiments, services and approaches, as well as the issues and hurdles that need to be addressed during the discovery and development process, and be able to work as a partner with their clients to make the right decisions based on high quality results and data.

Beyond having experience in key platforms and therapeutic areas of interest, CROs can also offer an integrated programme in a project-based environment. The road from discovery to market is high risk. The success rate from candidate to launch is less than 1%. Much of this risk resides in the inability to successfully translate from preclinical to clinical both for safety as well as efficacy. Pharma companies are constantly on the search for new models and approaches which increase the probability of success and ensure a greater chance of translation from preclinical to clinical studies.

In working with CROs, it is important to make sure your CRO partner has relevant translational expertise and capabilities. This includes a strong portfolio of evidence-based objective endpoints and design to mitigate risks and potential bias. CROs must understand the pitfalls and limitations of animal models and incorporate translational approaches – such as imaging and biomarkers – to provide the translatable data needed to successfully progress to the clinic.

The ultimate ‘go-forward’ decision in discovery triggers a series of events involving large investments of resources. It is thus critical for a CRO to have a proven, verifiable track record of successfully working in the field of discovery and in the relevant therapeutic area(s). Beyond just expertise and experience, this also includes the ability to provide highly validated platforms and approaches that produce highly reproducible and robust information in a consistent and timely manner, leading to decision-making quality data and knowledge. Today it is essential your CRO has the IT and data management systems, including security, to ensure the above.

Size and scope of a CRO can also be a factor. Larger CROs may offer more and have the depth and breadth of knowledge needed across multiple areas. In addition, the supporting infrastructures of larger CROs offer not just a single activity, but multiple-needed capabilities for a long-term trusted relationship that can be depended upon time and again.

The path from lead to candidate is unpredictable. A good CRO will work with its partners with a flexible and adaptable approach to deal with bumps in the road. With access to the right expertise, the CRO can work to help guide next steps so that the overall process is as smooth and efficient as possible. The CRO must not only have the capacity, but (especially in discovery) they must be adaptable and flexible in their work with partners – including their own vendors – and adjust to the needs and requirements of customers. The CRO should be able to tailor its offering based on each discovery programme’s needs, and, in the case of a discovery CRO, offer both therapeuticallyfocused approaches as well as diagnostic studies (PK, ADME, safety, lead optimisation) including specialised assays and platforms.

This last point – the need for flexibility – is especially critical for academic labs and biotechs that may not have the in-house resources to manage multiple CROs. The right CRO, with expertise and experience in drug discovery and development, can be a great asset in consulting and helping to design and execute project plans and studies from the very beginning. The insights of such a partner, with knowledge of and facility with the path from discovery to clinic, can be immeasurably useful in putting together the appropriate data package that can ultimately be submitted to regulatory agencies.

Whether at a pharma company, biotech or academic lab, anyone working in the world of drug discovery is acutely aware of the need to improve both the probability of success early in discovery as well as the efficiencies, so that the early investments required in the clinic can be made with greater confidence. Working with a partner who has the experience, knowledge and understanding of the sense of urgency and need for efficient, flawless execution is critical.

In the current, increasingly resource-constrained, environment it is important that these factors are addressed to decrease both time and costs, and to increase the probability of success in the clinic and ultimately in the marketplace. A good CRO partner can offer the flexibility and know-how so that you have the right science at the right time. DDW

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This article originally featured in the DDW Fall 2013 Issue

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Dr Davide Molho joined Charles River in 1999 as Corporate Vice-President, European Research Models and Services, with responsibility for all European RMS operations. Today, he serves as Corporate Executive Vice-President and President, North American Operations and is responsible for overseeing the unified RMS and PCS businesses in North America. Dr Molho received both his DVM and his Post Degree in Laboratory Animal Science & Medicine from the University of Milano.