According to Business Insider, “Wall Street is interested in the companies that help drug makers research and develop drugs.”1 Those companies are also known as contract research organizations (CROs) and are becoming increasingly important for the pharmaceutical industry.

Investments in CROsCROs work with drug makers to take on the science that companies must execute receive product approvals. CROs support a wide range of essential tasks, from discovering potential drug targets and determining optimal clinical trial locations to monitoring studies and managing regulatory affairs. Business Insider further explains by giving an example, “say you need to run a clinical trial for a drug you’re working on but don’t want to invest in hiring all the folks to run the clinical trial. You could work with a CRO, which can set that up for you and recruit patients for a certain price. As drug companies continue to look for ways to trim research-and-development costs, these companies have become more popular.”1

All of the activity has increased the room for mergers and acquisitions. According to Bloomberg, M&A spending in the industry (CRO) was $24 billion in 2016 whereas this year the spending on deals has already totaled $13 billion. 2 Additionally, private equity is picking up many CROs, indicating that investors expect the companies to continue to grow.

We at Pearl Pathways take pride in accelerating our client’ clinical programs through our niche clinical research services. We support all types of clinical trials covering complex therapeutic areas and studies with sophisticated designs. You can learn more about our dedicated niche CRO services here.

 

 

1 https://amp.businessinsider.com/mergers-and-acquisitions-in-the-contract-research-organization-2017-7

2 https://www.bloomberg.com/news/articles/2017-06-21/biopharma-outsourcing-is-going-through-deal-bonanza-in-u-s