2017 CRO MARKET SIZE PROJECTIONS - 2016-2021 PREVIEW OF MARCH, 2017
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P R E V I E W O F 2017 CRO MARKET SIZE PROJECTIONS 2016-2021 M A R C H , 2 0 1 7
Introduction
SMARTER QUESTIONS SMARTER ANSWERS
REPORT OVERVIEW
The past three years have been ISR’s report gives quantitative
quite eventful in the CRO world. insight into the perpetual
We’ve had service provider question: “What is the size of the
mergers and we’ve had service CRO market?” The data provide
provider mega-mergers. We’ve a thorough, rational perspective
had biopharma mergers and
we’ve had biopharma mega-
for clinical development services
segmented by phase, geography,
25
PAGES
mergers. We’ve had public and service line.
offerings and we’ve had
privatizations. Overall, the CRO ISR utilizes both publicly available
market has been one of the
best performing sectors in the
information and data obtained
through our syndicated primary
24
CHARTS
financial circles. market research efforts.
& GRAPHS
Publication Date: March, 2017
What you will learn
• Estimated R&D expenditures through 2021
• Projected spending on development, Phase I-IV development,
and outsourced Phase I-IV development through 2021,
segmented by sponsor type:
WHY ISR?
• Large pharma – large molecule 1. ISR has leveraged
• Large pharma – small molecule data from our primary
market research. These
• Non-large pharma – large molecule data, coupled with the
• Non-large pharma – small molecule “facts and figures” from
secondary sources, allow
• Generic/Specialty
for intelligent projections
• Government into the CRO market size.
• Private
2. The use of primary
• Association/Non-profit research data gives ISR
• Academic the unique ability to break
down the outsourced
• Spending on CRO services segmented by:
market further than
• Geography ever before, by offering
• Service-line geographic, service
line, and Phase I-IV
• Phase I-IV assessments.Introduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
TABLE OF CONTENTS
COPYRIGHT AND USAGE GUIDELINES
METHODOLOGY
EXECUTIVE SUMMARY
INTRODUCTION
OVERALL MARKET SIZE AND GROWTH
Top-down approach to market size
R&D sources and distribution
Table 1: R&D expenditures by segment (2016-2021)
Model adjustments – From R&D to CRO market size
Development spending
Table 2: Development as a percent of R&D by segment (2017)
Table 3: Development expenditures by segment (2016-2021)
Phase I-IV development spending
Table 4: Ph I-IV development as a percent of development by segment (2017)
Table 5: Ph I-IV development expenditures by segment (2016-2021)
Outsourced Phase I-IV development spending
Table 6: Outsourced Ph I-IV development as a percent of development
by segment (2016-2021)
Table 7: Outsourced Ph I-IV development expenditures by segment (2016-2021)
2017 full model analysis
2017 GEOGRAPHIC ASSESSMENT
Table 8: 2017 geographic distribution (%) of the CRO market size
Table 9: 2017 geographic distribution ($B) of the CRO market size
2017 SERVICE-LINE ASSESSMENT
Table 10: 2017 service-line distribution (%) of the CRO market size
Table 11: 2017 service-line distribution ($B) of the CRO market size
2017 DEVELOPMENT PHASE I-IV ASSESSMENT
Table 12: 2017 development phase distribution (%) of the CRO market size
Table 13: 2017 development phase distribution ($B) of the CRO market size
2016-2021 CRO MARKET MODEL
2016-2021 CRO market model – growth rates
2016 PUBLIC CRO MARKET SHARE
Table 14: 2016 Public CRO market shares
ABOUT INDUSTRY STANDARD RESEARCH
Questions about this report? Contact usIntroduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
S A M P L E P A G E :
INTRODUCTION
SMARTER QUESTONS SMARTER ANSWERS
INTRODUCTION
2016 was probably the year “CRO” finally became a household name on Wall Street and in the halls
of private equity firms� That said, those of us who have been in the industry for a while witnessed
just another year of solid growth and exchanges of ownership� Make no mistake, more and more
people are watching the CRO space� Let’s recap:
• Bioclinica was busy buying Clinverse, Cinven, and Compass Research
• Covance names industry veteran, John Ratliff, as its CEO
• ICON purchases Clinical Research Management
• INC Research focuses new service offerings on sites and patients
• inVentiv Health Clinical files their S-1, opening the door to going public
• Medpace goes public (market capitalization of ~$1�5B)
• PAREXEL closes on several bolt-on acquisitions (e�g� Health Advances, ExecuPharm, and
The Medical Affairs Company in early 2017)
• PPD buys Evidera and Synexus and is rumored to be a potential take-over candidate for
LabCorp/Covance
• PRA Health Sciences stock was up ~22% in 2016
• Premier Research receives a growth investment from Metalmark Capital
• Quintiles and IMS merge (market capitalization north of $18B) and buys TKL Research
• SynteractHCR was acquired by Amulet Capital Partners
We think there are several reasons why it might not be too late to jump on the CRO bandwagon�
Let’s start with first principals, demand� In the United States and Western Europe, the two largest
pharmaceutical markets, the population is aging and the demand for pharmaceutical products is
increasing� Therefore it is not surprising that, according to various estimates, underlying global R&D
expense (read: potential CRO revenue) continues to grow� This helps form a solid foundation from
which to build a growing business� If your demand has a relatively consistent 2-4% annual growth
rate, then just keeping your market share constant will result in increased revenue� Pharmapro-
jects also has some good news for the CRO industry� According to its projections, the preclinical
pipeline increased from ~6,000 candidates in 2015 to ~6,800 candidates in 2016 (a healthy 13% in-
crease in one year)� This increasing preclinical pipeline should provide a solid base for clinical stud-
ies over the coming years� ISR projects that outsourcing rates will continue to increase at a modest
rate for the next few years� With these fundamentals in place, CROs should see solid topline growth
over the next few years� That said, this is far from certain�
www.ISRreports.com ©2017 2017 Edition of the CRO Market Size Projections: 2016-2021 5
This is an enterprise-wide license and this file is not to be distributed beyond the terms of this agreement. For information on the license holder, please contact ISR (info@ISRreports.com).
Questions about this report? Contact usIntroduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
S A M P L E P A G E :
SMARTER QUESTONS SMARTER ANSWERS
R&D SOURCES
AND
R&D sources and distribution
DISTRIBUTION As previously stated, ISR starts its market model by gathering the R&D spending from the major
sources of R&D activity� In the following steps that refine our market size estimates, these figures will
be adjusted to account for varying degrees of spending directly associated with CRO revenue�
ISR starts our market model by
gathering the R&D spending from
PRO J ECT E D 2017 TOTAL R& D B RE AK DOWN ( $B )
the major sources of R&D activity.
Academic $44.8
This page shows the projected 15% Small molecule $98.7
34%
total R&D breakdown for 2017. Association $6.1
2%
Private $4.3
1% © Industry Standard Research
Government $72.6
25%
Large molecule $51.5
18%
Generic/Specialty $15.5
5%
Table 1: R&D expenditures by segment (2016-2021)
$B USD 2016 2017 2018 2019 2020 2021
Large company,
$69�5 $68�6 $68�3 $66�5 $64�9 $64�3
small molecule
Non-large company,
$30�4 $30�1 $30�0 $29�3 $28�7 $28�5
small molecule
SMARTER QUESTONS SMARTERLarge
ANSWERS
company,
$31�8 $35�8 $38�8 $42�9 $47�3 $50�8
large molecule
Non-large company,
$13�9 $15�7 $17�1 $18�9 $20�9 $22�5
large molecule
Generic/Specialty $15�0 $15�5 $16�0 $16�4 $16�8 $17�1
Government $68�8 $72�6 $76�7 $78�9 $81�0 $81�7
Private $4�3 $4�3 $4�3 $4�3 $4�3 $4�3
© Industry Standard Research
Association/Non-profit $5�8 $6�1 $6�3 $6�4 $6�6 $6�7
Academic $43�1 $44�8 $46�3 $47�4 $48�7 $49�9
Total $282�7 $293�4 $303�7 $311�1 $319�1 $325�6
R&D sources and distribution www.ISRreports.com ©2017 2017 Edition of the CRO Market Size Projections: 2016-2021 9
As previously stated, ISR starts its market model by gathering the R&D spending from the major
This is an enterprise-wide license and this file is not to be distributed beyond the terms of this agreement. For information on the license holder, please contact ISR (info@ISRreports.com).
sources of R&D activity� In the following steps that refine our market size estimates, these figures will
be adjusted to account for varying degrees of spending directly associated with CRO revenue�
C L O S E R L O O K
PR OJEC T ED 2 01 7 TOTA L R& D BREAK D OWN ( $ B)
>>This chart shows
Academic $44.8 the sources of R&D
15% Small molecule $98.7
34% spending for 2017. Small
Association $6.1 molecule and Large
2%
molecule account for
Private $4.3 52% of R&D spending.
1% © Industry Standard Research
Government $72.6 Data available in the
25%
Large molecule $51.5 full report. Click here
18%
Generic/Specialty $15.5 to purchase from
5%
ISRreports.com
Table 1: R&D expenditures by segment (2016-2021)
Questions about this report? Contact usIntroduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
S A M P L E P A G E :
MODEL ADJUSTMENT
This page highlights ISR’s top-down approach to our market sizing calculations. The
full analysis and figures for the 2017 Outsourcing Phase I-IV Development Market are
available in the full report at www.ISRreports.com.
SMARTER QUESTONS SMARTER ANSWERS
Model adjustments – From R&D to CRO market size
As previously stated, ISR utilizes a top-down approach to market sizing calculations, starting with
R&D spending� We then use a series of “deflators” in order to narrow the market applicable to
pharmaceutical service providers� The steps taken for these calculations are outlined below�
R&D expenditures are first analyzed to remove the “R” (research) and we are left with “D”
(development) spending per segment�
Development spending is then analyzed by the amount of spending done for Phase I-IV clinical
studies�
Phase I-IV clinical development spending is then segmented by the outsourcing penetration of each
company size/organization type to arrive at the market size for CROs�
2017 R&D:
$293.4B
2017 Development:
$120.7B
2017 Phase I-IV
Development:
$85.9B
© Industry Standard Research
2017 Outsourcing Phase I-IV
Development Market:
$34.3B
www.ISRreports.com ©2017 2017 Edition of the CRO Market Size Projections: 2016-2021 10
This is an enterprise-wide license and this file is not to be distributed beyond the terms of this agreement. For information on the license holder, please contact ISR (info@ISRreports.com).
Questions about this report? Contact usIntroduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
S A M P L E P A G E :
2017 SERVICE-LINE ASSESSMENT
ISR provides an assessment of the CRO market based on the services CROs typically
offer, based on ISR’s proprietary survey data.
The following chart has been blinded. The full data are available in the report, which can be
downloaded from www.ISRreports.com.
SMARTER QUESTONS SMARTER ANSWERS
2017 SERVICE-LINE
ASSESSMENT
Based on ISR’s proprietary survey data, we provide an assessment of the CRO market based on the
services CROs typically offer� We certainly understand that the distribution of service costs varies by
study type, phase, compound, etc� However, on aggregate, we believe our data provide one of the
most accurate representations of the CRO market size based on services in the industry�
We use the same data and assumptions with respect to our model working down from R&D to
development to Phase I-IV development activities to outsourcing propensity when working on our
service-line splits�
Table 10: 2017 service-line distribution (%) of the CRO market size
2017
Clinical Monitoring 21�1%
2017
ClinicalPayments
Investigator Monitoring 13�2% XX%
Data Management 10�9%
Investigator
Laboratory Payments 10�7% XX%
DataManagement
Project Management 9�0% XX%
Patient and Site Recruitment 8�7%
Laboratory
Technology 7�3% XX%
Biostatistics
Project Management 6�4% XX%
Medical Writing 3�1%
Patient
Imaging and Site Recruitment
3�1% XX%
Regulatory 2�8%
Technology XX%
Quality Assurance 2�4%
Biostatistics
Other 1�3% XX%
Total 100%
Medical Writing XX%
Regulatory XX%
Imaging XX%
Quality Assurance XX%
Other XX%
Total 100%
www.ISRreports.com ©2017 2017 Edition of the CRO Market Size Projections: 2016-2021 19
This is an enterprise-wide license and this file is not to be distributed beyond the terms of this agreement. For information on the license holder, please contact ISR (info@ISRreports.com).
Questions about this report? Contact usIntroduction
2016 CRO MARKET SIZE PROJECTIONS 2015-2020
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ISR’S HEALTH PANEL
THE The industry’s fastest growing panel
ISR’S COMMON of health care and pharmaceutical
professionals, with nearly 1,500
VS. SYNDICATED
REPORTS members worldwide.
REPORT
Other 6%
CRO 6%
Research
Site 10%
RESEARCH METHODS BY
Mostly primary One size COMPANY
research; always fits all; usually TYPE
appropriate for publically
the topic available data
Sponsor 78%
DATA COLLECTION
ISR’s proprietary data Struggle to C-level 13%
tools and channels recruit the right
support fast, high targets and Manager
quality data collection enough of them 29%
VP 10%
BY
RESPONDENTS JOB
LEVEL
Sophisticated screening Undisclosed
ensures genuine methodologies
decision-makers and respondent
make up respondents demographics
Director 46%
SAMPLE SIZE 3-5 years 5%
Robust Often insufficient 6-10 years 11%
sample sizes industry representation 20+
that instill that leaves you years
confidence defending results 37% BY
EXPERIENCE 11-15
ANALYSTS IN YEARS years
24%
Decades of experience Junior analysts
means more capable of
insights that are reporting
immediately usable numbers 16-20 years 23%
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