As the complexity of drug discovery and development steadily increases, so do the costs. With average expenditures for prescription drug R&D ranging between $2.5 and $3 billion, emerging biotech companies are facing a number of challenges. Here, CROs can help.

In 2018, more than two-thirds of late-stage pipelines were owned by emerging biotechs, reflecting a shift within the industry from large biopharma companies to small and medium-sized enterprises (SMEs). Often limited by a lack of liquidity, in-house resources, infrastructure, or expertise, emerging biotechs are continuously looking for more cost-effective ways to develop medicines.
“Due to the complex, multidisciplinary approach and expertise required in drug development and clinical research, emerging biotechs are hardly in the position to host all the required competencies and infrastructure to conduct drug development programs on their own,” says Heike Schön, Co-founder and Managing Director at Lumis International. “Drug developers are in acute need to control expenditure and reduce costs by limiting their workforce to core areas and subcontracting the rest of tasks to vendors, such as contract research organizations (CROs).”
Vendors can support emerging biotechs throughout R&D
While they focus on core competencies and their overall strategy, biotech companies can use CROs and other vendors to partially or fully organize and operationalize clinical trial execution and everything associated with it.
As key stakeholders in drug and medical device development, CROs support emerging biotechs throughout the R&D process and introduce them to a network of scientific experts, regulators, patients, physicians, and other collaborators.
“CROs and other vendors are reaching a level of core specialization in areas deemed pivotal for the drug and medical device life cycle,” Schön explains. “This level of specialization covers a wide range of disciplines and global infrastructure from pre-clinical to clinical to market. Vendors are driving the evolution of e-technology and the inclusion of artificial intelligence and real-world data, which are increasingly influencing the way drug development is being approached and clinical programs are construed.”
The right CRO management is the key to success
Emerging biotechs should choose a CRO partner depending on their needs and based on a proven track record of successful projects. “There needs to be a close cultural alignment between the sponsor and the CRO,” Schön explains. “The partner should also have a specific level of therapeutic expertise or particular technical or geographic infrastructure. Moreover, especially for SMEs, it is very important to consider the CROs’ adaptability and the type of tailored services provided.”
Although emerging biotechs heavily rely on CROs to partially or fully operationalize the required activities for the execution of clinical trials while complying with national and international regulations, emerging biotechs have to demonstrate full control over their vendors.
“Whether tasks are conducted in-house or via an external partner, and particularly if they are related to patient safety and data integrity, the sponsors have to indicate full ownership and control over all activities taking place during drug development,” says Schön. “Failure to do so will lead to warnings by the authorities, resulting in a bad reputation for sponsors as well as severe financial implications in case of marketing approval delays, repetition of study data requests and more.”
To prevent this from happening, emerging biotechs need to have a robust vendor management platform based on the careful selection of a suitable CRO. The vendor management platform should also ensure that the sponsor has the complete oversight on safety and data integrity, evidence-based control over outsourced tasks, and tailored key performance metrics regarding timelines, quality, and costs.
How Lumis International can help find the right partner
Finding and managing CROs and other vendors can be a challenging task for small and medium-sized biotechs, especially for those with little experience in the field. In this instance, Lumis International can help.
With over 20 years of experience in global clinical research, Lumis helps emerging biotechs across five defined areas: vendor selection, budget negotiation, contract management, sponsor’s oversight, and operational execution. Each area is specifically tailored to the needs of the respective SME.
“For vendor search and selection, we provide a robust outsourcing methodology,” Schön explains. “This includes tailor-made searches for single or wide-range services, CROs, and other vendors; CRO qualification audits; process implementation and state-of-the-art request for proposal (RFP) e-technology; and the setup and implementation of the preferred vendor selection process.”
With a 2018 market value of over $34 billion, global CROs are on the rise. Increasing investment in drug discovery and development programs, outsourcing processes to save time and costs, and sharing risks with a partner, are all reasons for the rapid growth of the CRO market. As a result, the difficulty of choosing the right partner and the need for careful vendor management will increase, leaving emerging biotechs in need of companies like Lumis.
Are you struggling to gain a foothold in the European life sciences industry? Do you need help to find the right vendor? Or are you struggling with your vendor management program? Whatever it is, get in touch with the experts at Lumis International and benefit from their experience.