Thanks to pharma's R&D cost-cutting efforts, the CRO industry will expand at nearly a 10% clip through 2019, a report says, citing trends many industry-watchers will have noticed so far this year, in the months since the report came to light.
The main growth driver, the December report said, is the increase in pharma companies looking outside of their organizations for R&D work in an effort to better focus on their own areas of expertise. Issued by analysts at TechNovio, the report predicts the overall CRO industry to grow at a CAGR of 9.38% over the next four years.
And so far this year, many of the predictions are holding true. Earlier this month, INC Research ($INCR) raised its 2015 expectations after jumping its net income 53% in Q2 over the same period last year. As has been seen across the greater biopharma landscape, M&A action is expected to increase for the CRO field, the report predicted. That can be seen in LabCorp's ($LH) $6.1 billion purchase of Covance and in previous acquisitions by Quintiles ($Q), PRA Health Sciences ($PRAH) and Charles River Laboratories ($CRL).
In discussing challenges, the analysts pointed to a shortage of experienced CRO personnel as a growth barrier, an issue PRA is hoping to address with its Candidate Experience initiative unveiled in July. The effort is aimed at identifying candidates who'd be particularly suited to work at a CRO and includes a new website, DiscoverYourPra.com.
Other recent acquisitions and expansions in the industry include AMRI's ($AMRI) $174 million purchase of a Spanish manufacturing operation and Almac's new Singapore office that'll serve as an Asian headquarters as it works to grow in the region.
Using primary and secondary input from industry participants, the analysts compiled a broad look at the industry's landscape and the strengths and weaknesses of each player.
- here's the report
Editor's note: This story was changed to reflect ongoing trends in the industry.