TrialSite recently showcased the consolidating contract research organization (CRO) market, with a number of giant organizations now emerging to battle it out on the global clinical trials vendor stage. The $50 billion market for clinical trials services grows at a healthy pace as the world finds itself in the midst of a biomedical research revolution, with advances occurring all the time in a number of therapeutic areas, fields, technologies, approaches and methods. But when factoring in expanded demands of R&D outsourcing, real-world evidence, and connected health and technology, the total market size becomes a massive $260 billion, gaining the attention of private equity players and big investors worldwide. In the CRO and related R&D outsourcing space, just nine (9) companies control about $80 billion in revenues. These players, including IQVIA, Lab Cop of America, Thermo Scientific (PPD), and others, are typically first in line for broad-based strategic outsourcing deals with the biggest pharmaceutical, biotech, and medical device companies. These tier-1 CROs generate $1+ billion in revenue and compete vigorously while mid-market CROs (between $100 million to $1 billion) must increasingly merge to remain competitive for larger deals. China increasingly represents a clinical trials hub of the future as that market ultimately represents the largest pharmaceutical market of the future. Moreover, with over 1.4 billion people, the world’s most populated nation increasingly represents the place to be to find trial sites and patients. One Chinese CRO has made it to tier 1 status—Wuxi AppTec—and with the recent announcement of intent to merger another one—dMed Global of Shanghai China is now in that club after their deal with Clinipace Incorporated, a full-serve CRO based in Research Triangle Park in North Carolina, a major CRO and clinical trials industry hub.
China on the Rise
TrialSite has reported that a confluence of forces increasingly leads the clinical trials business to China. The reasons are many and obvious to the industry, from the sheer size of the population (potential market and access to treatment naive patients) to dramatic regulatory report of China’s drug regulatory, the rise of China, TrialSite suggests, is inevitable, and drug companies that seek competitive position will establish strong networks there to conduct research-related business. Its not just America but other countries such as Korea that identified this imminent sea change.
Merger Portends the Future
dMed Global is a full-service CRO that, according to some sources, generates between $200 to $250 million in revenue per year while North Carolina-based Clinipace generates about $100 million per year. Now with the two coming together, the new entity will employ over 1,600 across 22 countries and hold a strong position as a highly differentiated mid-sized CRO that rivals leading global CROs in geographic scope, services and therapeutic expertise. This new entity possess capabilities in North America, Asia Pacific, Europe and Latin America, and according to their recent press release, this will allow them to compete head-to-head with tier 1 CROs for the biggest pharma contracts. Moreover, TrialSite suggests that the strong presence and position in China represents a considerable opportunity for competitive advantage in building up trial site networks, access to patients, and the growing China life sciences research market.
Interestingly, and supporting the TrialSite thesis as to the direction of the sphere of research influence, the new Sino-America CRO will be led by dMed’s Chairman and CEO Dr. Lingshi Tan, who will serve as global CEO with Clinipace’s existing CEO, Jason Monteleone, assuming the role as Chief Business & Strategy Officer.
As summarized by Dr. Tan, CEO of the pending merged entity, “Western biotech companies increasingly recognize their need for a strategic partner who can stay on the leading edge of fundamental changes in the global clinical landscape. China is already a key market, a leading site for accelerating drug development and launch and the home to a rapidly growing number of innovative biotech’s that are expanding globally. We will now be positioned to better serve the global needs of both Western and Chinese companies.”
While dMed Global’s founding back in 2016 originated from Tan’s move, a former Pfizer executive and its first General Manager for R&D in China, they have accelerated growth thanks to the rapid reform of China’s regulatory framework for drug development. dMed’s ambition for growth was unleashed in 2019 with the acquisition of Target Health.
While Clinipace launched nearly 25 years ago as a CRO with expertise and in a number of areas, powered by advanced technologies.