Emerging biopharma companies are expected to spend about US$15 Million in the three years up to and through the completion of a Phase I trials for a small molecule candidate, and US$20 Million for a large molecule candidate. The comparable cost for a Phase II trial is approximately US$30 Million (small molecule) and US$45 Million (large molecule). Emerging bio/pharma companies sponsored 551 Phase I and Phase II trials in the first half of 2016, a 53% increase over the first half of 2012.
Demand for development services to support Phase 1 and Phase 2 clinical trials is driving double-digit growth for CROs and CDMOs. Demand for clinical manufacturing services is actually outstripping industry capacity and leading to delays in getting clinical trial materials needed for studies.
The outlook for the CDMO and CRO sector will depend very much on the ability of emerging bio/pharma companies to continue raising funds in public markets. Pubic equity markets were much less generous toward emerging bio/ pharma companies in 2016 than in 2015, and their outlook depends on a broad range of factors, some industry-specific and others related to the macroeco¬nomic picture.
The report “PharmSource - Follow the Money: The Outlook for Outsourced Spending on Early Development Services” provides important insight about CDMOs and CROs: market trends, capital investment decision-making, strategic planning, performance benchmarking and Private equity: investment targeting, portfolio company performance benchmarking.
2 Executive Summary
3 Context and Objectives
4 Clinical Trial Activity of Emerging Bio/Pharma Companies
5 Clinical Development Costs and Spending by Emerging Bio/Pharma Companies
6 External Financing for Emerging Bio/Pharma Companies
7 Outlook and What it Means
8 Appendix A
9 Appendix B
1.1 List of Tables
Table 1 2016 Performance of Drug Development Service Providers
Table 2 Profile of Emerging Bio/Pharma IPOs 2014-
1.2 List of Figures
Figure 1 Breakdown of Phase I and Phase II Trials by Primary Sponsor, H1 2012-H1
Figure 2 Operating Expenditure of US Emerging Biopharma Companies Pre- and Post-IPO
Figure 3 Operating Expenditure of US Emerging Biopharma Companies Pre- and Post-SPO
Figure 4 Estimated Cost of Getting Candidates Through Clinical Trial Phases
Figure 5 Ownership of Emerging Bio/Pharma Companies Sponsoring Clinical Trials H1
Figure 6 Equity Funding to Emerging Bio/Pharma 2010-
Figure 7 Venture Capital Investment in Bio/Pharma Companies
Figure 8 VC Funding to Emerging Bio/Pharma 2010-
Figure 9 NASDAQ Biotech Index January 13-December
Figure 10 R&D Spend and Cash Runway for US Emerging Bio/Pharma Companies
Figure 11 Revenue as a Funding Source for US Emerging BioPharma
Figure 12 Proportion of Companies with > 2 Years Cash or Increasing Cash Reserves