The CRO Covance and Eli Lilly have signed an agreement that they say will transform Lilly's R&D model. Covance is buying Lilly's Greenfield, Indiana early drug development campus for $50 million and will offer employment to about 260 Lilly employees. Covance also signed a ten-year, $1.6 billion contract to provide Lilly drug development services. According to a statement, Covance will take responsibility for Lilly's non-GLP toxicology, in vivo pharmacology, quality control laboratory, and imaging services. The deal also includes a committed level of clinical pharmacology, central laboratory, GLP toxicology studies, and clinical Phase II-IV services.
Lilly says the move will help the company control the ever-growing cost of drug development. "Covance has proven they can help accelerate drug development timelines and improve efficiencies with Lilly, which will enable us to further focus on our core competencies..." said John Lechleiter (photo), Eli Lilly CEO.
A recent report found that CROs are playing a growing role helping biotech companies develop early-stage therapeutics. Over the past five years the global CRO industry has seen their revenue share from biotech companies grow from 21 percent to 30 percent. "Today's announcement represents an innovative approach to the R&D productivity challenges our pharmaceutical clients are facing," said Joe Herring, Covance Chairman and CEO.
- here's the release on the deal
- read this Forbes article for more
ALSO: The rest of Wall Street (except biotech) may be suffering, but according to the Motley Fool, CRO stock is hot. Big Pharma and small biotech's outsourcing initiatives have been great for CROs, and Covance, Parexel, ICON, Charles River and WuXi PharmaTech have sustained impressive growth over the past year. Report