Contract Research Organisations (CROs) typically provide discovery and development services to the pharmaceutical, biotechnology and medical devices industries (frequently referred to as sponsors), but can also support foundations, research institutions and universities.
CROs co-ordinate and execute activities throughout the R&D pathway, by organising and conducting clinical trials to test the new molecule in humans. As independent companies, they offer an objective assessment of a new drug in the clinical setting and, because they partner with many companies, typically offer broader experience than if the sponsors organised the trials themselves. CROs obtain most of their revenues from sponsor R&D budgets, with work conducted in the form of short- or long-term contractual outsourced services.
The last few years has been a very interesting period for deal watchers in the CRO space. Multiple mega-mergers took place between key players, leaving the CRO landscape looking remarkably different to when the period began.
CRO sector M&A has become far more focused, with players seeking to acquire companies with specific areas of expertise as a way to bolster niche capabilities, whether this be getting access to patient centric data, addressing unmet therapeutic areas in rare diseases and through personalised medicine, utilising artificial intelligence in data analysis or dealing with changes in the pricing and regulatory environment.
In our latest 2019 white paper on CRO sector M&A, we discuss some of the important trends observed in recent years and look to the future of deal making within the industry. The robust corporate activity that the CRO sector has enjoyed over recent years looks likely to continue going forward.