Analyst: CROs like Covance and Icon will take the lead on IT and genomics

With the spiraling amount of time and money needed to bring a drug to market weighing heavy on their Big Pharma clients, CROs have invested in efficiency-boosting technology to gain a competitive edge. And the trend is tipped to continue, with an analyst predicting CROs will be at the forefront of developments in IT and genomics in 2014.

Wells Fargo analyst Tim Evans made the prediction in a research note picking out 10 top themes for CROs in the year ahead. All of the leading clinical CROs have talked up their IT capabilities over the past year, with Covance's ($CVD) Xcellerate, Icon's ($ICLR) Iconik, Quintiles' ($Q) Infosario and Parexel's ($PRXL) MyTrials all jostling for attention. Each claims to use computing power and data to speed some aspect of the clinical trial process.

As Evans sees it, the next big battleground is risk-based monitoring, a long-discussed approach that now has the backing of formal FDA guidance encouraging adoption. For CROs, remote, risk-based monitoring is a way to decouple sales growth from headcount, a link that forced service providers to hire heavily to handle strategic deals. Now, though, technology could allow monitors to oversee more studies while traveling less. In a pilot project, Novartis ($NVS) slashed travel costs by two-thirds.

The big CROs have already begun building systems to enable remote, risk-based monitoring and Evans sees competition heating up in 2014. CROs are also moving into genomics. Covance was an early mover--buying a genomics lab from Merck ($MRK) in 2009--and its peers have also entered the market through acquisition. Evans expects CROs will continue to make bolt-on genomics and IT deals to bolster their capabilities and differentiate themselves from competitors over the coming year.

- read Novartis' pilot project report

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