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The World Health organisation’s latest assessment of the monkeypox outbreak is that it poses a moderate threat to public health, as cases of the infection continue to rise.

In an update posted yesterday, the WHO said it had received reports of 257 confirmed cases of monkeypox from 23 countries, 106 of them from the UK and 49 from Portugal, with another 120 suspected cases being investigated. No deaths have been reported from the infections.

For comparison, there were just seven cases of monkeypox in the UK between 2018 and 2021, according to a just-published paper in The Lancet Infectious Diseases.

The risk level stems from the spread of the virus among people with no established travel links to an endemic area, which is unusual in monkeypox cases, and in “widely disparate…geographical areas,” said the WHO.

The big question is whether this change in behaviour is a result of a change in monkeypox virus transmission properties or increased virulence.

“The public health risk could become high if this virus exploits the opportunity to establish itself as a human pathogen and spreads to groups at higher risk of severe disease such as young children and immunosuppressed persons,” according to the WHO.

One concern for public health experts is that with vaccination against the similar smallpox virus ending more than 40 years ago, there is little immunity in global populations to help curb the spread of infections.

The priorities for healthcare services should be to provide accurate information to people who may be most at risk of contracting the virus, stopping further spread among those groups, and protecting frontline health workers, said the WHO.

Belgium – with three confirmed cases and three under investigation – has just become the first country to implement a mandatory rather than voluntary 21-day quarantine for anyone who contracts the virus and their close contacts.

At the moment the only approved vaccine for monkeypox is Bavarian Nordic’s Jyneos, and the company says it has been inundated with requests for supplies from countries around the world. It says it has the capacity to produce around 30 million doses per year.

Another shot called ACAM2000 from Emergent BioSolutions is licensed for smallpox but could also provide protection against monkeypox if authorised.

Meanwhile, SIGA Technologies’ oral drug Tpoxx (tecovirimat) is approved for smallpox, monkeypox and cowpox in Europe, and in the US and Canada for smallpox alone, although it can be used off-label for the other disease. Another drug – Chimerix’ Tembexa (brincidofovir) – is approved for smallpox and has shown activity against monkeypox in animal studies.

Monkeypox causes symptoms similar to but milder than smallpox, typically beginning with fever, headache, muscle aches and exhaustion. It is transmitted to people from various wild animals, such as rodents and primates, and is usually a self-limited disease with symptoms lasting from two to four weeks.

In future, blood samples may be taken by an autonomous robot rather than a healthcare professional – if Dutch developer Vitestro can get its prototype approved for marketing.

Vitestro’s blood drawing (phlebotomy) robot is designed to offer a solution to what the company says is a growing shortage of healthcare personnel, coupled with rising demand for blood tests with billions carried out every year worldwide.

Blood testing forms the basis of 70% of all medical decisions made by physicians, and according to prior research can have a failure rate of 27% in people without visible veins and up to 60% in challenging patients, such as those who are emaciated.

The device (pictured above) uses artificial intelligence and ultrasound imaging to deliver a needle exactly where it is needed to draw blood.

It automatically carries out the entire procedure, from applying a tourniquet to placing a dressing on the site and disposing of the used needle, according to the Utrecht-based company.

In clinical studies, the prototype of the device already performed 1,500 automated blood draws on more than 1,000 patients, said Vitestro.

“The mounting shortage of healthcare personnel is imminent,” according to the robotics specialist’s co-founder and chief executive Toon Overbeeke.

“The pandemic has further led to loss of workforce, causing a bleak outlook for hospital output around the globe, and leading to reduced access and continuity of care,” he said. “That’s why revolutionary automation like our blood drawing device is inevitable to solve the industry’s biggest problem.”

Pivotal trials of the robot are expected to get underway in 2023 in the hope of bringing the robot to market in Europe in 2024, said Vitestro in a statement.

Other groups are also developing blood-drawing devices. A team from Rutgers University in the US led by Martin Yarmush has developed a hand-held device dubbed VeniBot that according to a 2020 study performed at least as well as human phlebotomists.

The team has not secured a commercial partner for the device as yet, but is trying to scale it down further in the hope of one day creating a version that could be kept in the pocket of a lab coat.

Meanwhile, in China a larger device – not dissimilar in scale to the Vitestro robot – is being developed by Beijing-based company Magic Nurse and has already been approved for sale in its home market.

If Vitestro’s machine is approved, it is initially intended to be used in outpatient phlebotomy departments, with patients offered a choice between the robot and human personnel.

“To prepare for production and commercialisation, the team will double in size in the next two years,” said Overbeeke.

“We have clear momentum in the market and will be the first to bring autonomous technology to European hospitals.”

BridgeBio announced that it has signed an exclusive deal with Bristol-Myers Squibb to develop and commercialize a potential treatment for cancer.

The two companies will work together on BBP-398, an SHP2 inhibitor that has the potential to address difficult-to-treat cancers. The drug was created through the partnership between BridgeBio and the Therapeutics Discovery unit of The University of Texas MD Anderson Cancer Center. SHP2 has the ability to regulate cell proliferation and survival, and overactivity has been found to contribute to many types of cancer and suppress anti-tumor immunity.

BridgeBio’s licensing deal with Bristol Myers Squibb will utilize BBP-398 combined with Opdivo (nivolumab) for patients who have advanced solid tumors with KRAS mutations.

“We are grateful to be expanding our collaboration with Bristol Myers Squibb, a leader in oncology, and we believe this agreement will allow us to reach even more patients with difficult-to-treat cancers. We believe our SHP2 inhibitor has the potential to be a best-in-class agent given the data we have seen, and we are eager to see our monotherapy and combination trials progress in collaboration with our partners at Bristol Myers Squibb,” commented Neil Kumar, Ph.D., founder and CEO OF BridgeBio, in a statement.

Prior to BMS, BridgeBio partnered with LianBio in Mainland China to develop and commercialize the drug in combination with other agents to treat solid tumors such as colorectal, pancreatic and non-small cell lung cancers. It also has an agreement with Amgen to combine the drug with Lumakras (sotorasib) to address advanced solid tumors with KRASG12C mutations.

The latest deal with Bristol Myers Squibb will bring $90 million to BridgeBio as an upfront payment in addition to $815 million in regulatory, development and sales milestone payments. Tiered royalties are also expected to hit the low- to mid-teens. Under the terms of the agreement, BridgeBio will continue with its Phase I monotherapy and combination trials for BBP-398. BMS will lead and finance all other research and commercial efforts.

“We have seen the potential role SHP2 inhibition could play in unlocking possible combination therapies to treat patients suffering from a range of cancers. We are hopeful this collaboration with BridgeBio will help us maximize the possibilities SHP2 inhibition with BBP-398 will hold for patients,” noted Rupert Vessey, executive vice president for research and early development at BMS.

The deal is a breath of fresh air for BridgeBio, which in April announced it is laying off staff and members of leadership due to the disappointing outcome of its Phase III Attribute-CM study of acoramidis for symptomatic transthyretin amyloid cardiomyopathy.

In response to the layoffs, Dr. Kumar previously told Biospace, “This is part of a necessary and ongoing cost reduction process. We are sorry to see our colleagues go – a great number of whom contributed significantly to our mission to serve patients.”

Eli Lilly scored another win against diabetes Friday as the company’s once-weekly dual glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonist tirzepatide won approval under Priority Review from the U.S. Food and Drug Administration.

Late Friday afternoon, the FDA approved tirzepatide to improve blood sugar control in adults with type 2 diabetes, as an addition to diet and exercise. The new diabetes treatment will be sold under the brand name Mounjaro. In multiple clinical studies, Mounjaro demonstrated efficacy improving blood sugar and also proved to be more effective than other diabetes therapies in clinical studies, the FDA said.

Patrick Archdeacon, associate director of the Division of Diabetes, Lipid Disorders, and Obesity in the FDA’s Center for Drug Evaluation and Research, called the approval of Mounjaro an “important advance in the treatment of type 2 diabetes” given the challenges many patient face in attempting to achieve target blood sugar goals.

Mounjaro is a first-in-class medicine that activates both the GLP-1 and GIP receptors. That activation leads to improved blood sugar control. Last year, Eli Lilly posted positive data from the Phase III SURPASS-3 trial, which showed that Mounjaro led to greater improvements in liver fat content and abdominal adipose tissue compared to titrated insulin degludec in adults with type 2 diabetes. Those results were based on magnetic resonance imaging (MRI) scans, the company said at the time.

Across multiple clinical trials, many doses of Mounjaro were assessed as either a stand-alone therapy or as an add-on to other diabetes medicines. The efficacy of the dual-acting drug was compared to placebo, a GLP-1 receptor agonist (Novo Nordisk’s semaglutide), as well as two long-acting insulin analogs. Data from the studies showed that treatment with Mounjaro saw a lowering of hemoglobin A (HbA1c) by 1.6% compared to placebo when used as a stand-alone therapy. When used in combination with insulin, the reduction was 1.5%. In head-to-head studies comparing Mounjaro to other diabetes medications, patients who received the maximum recommended dose of Mounjaro lowered their HbA1c by 0.5% more than with semaglutide, 0.9% more than insulin degludec and 1.0% more than insulin glargine, the FDA said.

In addition to lowering of blood sugar, Mounjaro also enabled patients to lower their weight by 15 to 23 pounds. Compared to other diabetes drugs, the FDA said the average weight loss with the maximum recommended dose of Mounjaro was 12 pounds more than semaglutide, 29 pounds more than insulin degludec and 27 pounds more than insulin glargine. When using insulin without Mounjaro, the FDA noted that patients tended to gain weight during clinical studies.

More than 30 million Americans have been diagnosed with type 2 diabetes, a chronic and progressive disease where the body fails to make normal insulin levels, which leads to high levels of glucose in the blood. Although there are numerous treatments for diabetes, many patients fail to achieve the recommended blood sugar goals.

The FDA noted that Mounjaro can cause thyroid C-cell tumors in rats. At this time, it is unknown whether or not the Eli Lilly drug can cause such tumors, including medullary thyroid cancer, in humans.

For Lilly, the approval of Mounjaro comes two days after the FDA gave full approvalto its COVID-19 treatment Olumiant, which had previously been greenlit under Emergency Use Authorization. A Janus kinase inhibitor, Olumiant is used to treat hospitalized COVID-19 patients who require supplemental oxygen, extracorporeal membrane oxygen (ECMO), or the use of a ventilator. Olumiant was given full approval based on the Phase-III Adaptive COVID-19 Treatment Trial 2 (ACTT-2) and COV-Barrier clinical trials.

Sanofi has completed the spin-out of its pharma ingredients business EuroAPI, with shares in the new company rising more than 3% on its starting price of €12 in early trading on the Euronext exchange this morning in a declining market.

The separation makes EuroAPI the world’s single largest producer of small-molecule active pharmaceutical ingredients (APIs) – and the second-largest API producer overall after Israel’s Teva – with a market valuation of more than $1.2 billion.

It has around 200 APIs in its portfolio, and also provides contract development and manufacturing services for more than 500 other pharma companies.

The spinoff was first announced in 2020, as Sanofi looked to pivot its resources to the development of medicines for oncology, immunology and rare diseases and away from the lower-margin ingredients business.

At the time, there were concerns about the reliance of European drug producers on ingredient producers in countries like India and China, particularly as supply chains became disrupted by COVID-19, and those concerns have only been exacerbated by Russia’s attack on Ukraine.

By operating independently, EuroAPI plans to increase its sales to third parties and to expand its partnerships with other pharma companies in order to take advantage of new growth opportunities. Sanofi has retained a roughly 30% stake.

The company targets an API market valued at €72 billion in 2019 and is expected to grow at an average rate of 6% to 7% per year until 2024, as well as an outsourcing category that has been forecast to grow at 7%-8% per year over the same period.

It operates six European API production sites at Brindisi in Italy, Frankfurt in Germany, Haverhill in the UK), St Aubin les Elbeuf and Vertolaye in France, and Újpest in Hungary, and employs around 3,350 workers.

“We are fully confident in our ability to unlock further value for all our stakeholders,” said chief executive Karl Rotthier, as he rang the Euronext bell on what is his birthday.

The company “looks forward to writing this new chapter alongside Sanofi, which will remain a long-term strategic partner, BPI France and L’Oréal, and to serve our clients in Europe and globally,” he added.

Biogen has licensed rights to a digital therapeutic (DTx) developed by MedRhythms which combines sensors, software, and music to help people with multiple sclerosis tackle mobility problems.

The biopharma company – which is one of the top players in MS drug therapies – is paying $3 million upfront to claim rights to the DTx, known as MR-004, and is also on the hook for an additional $117.5 million in development and commercial milestones plus royalties on any eventual sales.

The deal is something of a milestone for the digital therapeutics category, with the sums involved in the same ballpark as when biopharma companies license rights to promising drug-based treatments.

MedRhythms approach with MR-004 is based on rhythmic auditory stimulation (RAS), a neurological music therapy technique used to improve motor control in patients with various illnesses, including for example stroke survivors or people with Parkinson’s disease and cerebral palsy.

Using the approach, patients exercise alongside acoustic rhythms or music, trying to match their footsteps to the stimulus and improve their gait and mobility.

MedRhythms’ take on RAS is to include sensors in shoes that monitor gait, plus algorithms within a smartphone app that can modify the musical stimulus in response to how well the patient is performing the task.

The result is “closed loop” gait training that can produce clinical decisions similar to a trained therapist, according to the digital health specialist, which is also developing DTx for stroke, Parkinson’s and dementia patients as well as for fall prevention in the elderly.

DCT Adoption Tracker: Clinical Trials Arena reviews the burgeoning trend on remote monitoring and look into regulatory know-how needed to ensure success.

• Wearables can be a value-added aspect to data collection in clinical trials, to complement electronic Patient Reported Outcomes and electronic Clinical Outcome Assessments.
• Central nervous system and cardiovascular spaces continue to be on top in integrating wearable or sensor devices in clinical trials, but rare diseases and oncology are not far behind.
• FDA guidance on validation for wearables exists but the onus is on makers and sponsors to seek additional regulatory guidance.

The boon of remote monitoring such as sensors and trackers in decentralised clinical trials (DCTs) shows no sign of slow down, but the onus is on wearable makers as well as study sponsors to ensure there is proper device validation.

As reported in an exclusive analysis by Clinical Trials Arena, wearable sensors and tracking devices in DCTs averaged at 42 clinical trials per year between 2010 and 2014. But this has consistently increased starting in 2015, breaking the 200-study mark last year. The biggest jump was seen between 2020 and 2021, rising by 44 trials from the previous year. Remote monitoring that involves wearables are designed to track trial participant outcomes between regular onsite visits, while also reducing overall visit numbers.

In an advance in the DCT landscape, long-established assessment tools such as electronic Clinical Outcome Assessment (eCOAs) are now supported by wearable sensors and tracking devices. Wearables enable a broader view of the patient journey as it complements and enhances electronic Patient Reported Outcome (ePRO) collections, adds Nico O’Kuinghttons, vice president of commercial, DCTs at Huma.

The different digital solutions can allow for broader and better data collection, O’Kuinghttons says. Algorithms allow for information collection that can complement and allow a fuller assessment of surrogate endpoints.

Diseases with most clinical trial remote monitoring

In terms of the respective therapeutic spaces employing wearable sensors and tracking devices, Clinical Trials Arena reported they are most used in central nervous system (CNS), metabolic space, and respiratory disorder trials. CNS has always been a frontrunner and innovator with sensors because many trial endpoints have been activity-based which sensors capture well, says John Reites, CEO at THREAD, a DCT service provider. According to GlobalData Clinical Trials database, there are 56 ongoing clinical trials employing sensors in the CNS space. 

There is also heightened interest in rare diseases such as muscular degenerative diseases where walking, eating, and movement matters, as well as dermatology where sleep and scratching patterns can be detected by sensors, Reites notes. Oncology is also a space with a growing interest in sensors to capture movement between visits, to indicate a treatment allows a person to become less sedentary.

The future of sensors includes new forms of clinical trial endpoints such as electronic Device Reported Outcomes (eDROs), Reites says. The next five years will see many more options in terms of how these wearables can generate quality data in a clinical study, providing comfort to physicians, patients, and regulators, he adds. Some examples of the next-generation sensor endpoints include voice data capture for voice and tonality, aspects that cannot be captured in a traditional eCOA, he notes.

Wearable, sensor data validation necessary

O’Kuinghttons says, considering the wearable and sensor explosion, key questions tech maker needs to consider include: What is the validation process of data generated? What’s the validation threshold that the study could recognise? What data is as good as going into a doctor’s office?

A wearable for a study must be able to demonstrate to the regulatory entities that the data will be reliable to validate endpoints. There is regulatory guidance, particularly from the FDA, on validation for wearables and sensors but it is broad, O’Kuinghttons says. Rather, wearable makers and sponsors are encouraged to come to the agency for further guidance.

The onus is on both the wearable maker as well as the trial sponsor to invest in research demonstrating validation, O’Kuinghttons adds. In terms of the evidence threshold for high-quality data, a recent article posited that digital therapeutics should have at least one published, randomized controlled trial (RCT) for efficacy validation. Digital therapeutics are defined by the FDA as “software intended to be used for one or more medical purposes… without being part of a hardware medical device,” and where the purpose is “treatment or alleviation of disease”.

“There are evidence standards for sensors (medical devices and consumer wearables) as some of the endpoints derived from these devices are approved as protocol endpoints,” Reites says. There is also a volume of publications available supporting the validated use of sensors, he adds.

Standardisation among wearables ideal

While sensors and tracking devices will eventually go through standardisation, in the meantime the market will be challenged with developing standardised means to the technology’s use and application, O’Kuinghttons notes. However, he adds: “I don’t think it’s naïve to say in five years we will begin to see signs of validation standardisation across certain therapeutic areas.”

An example on standardisation could be made in the cardiovascular space with electrocardiograms, O’Kuinghttons says. But there are also disease spaces like the CNS space where standardisation may take longer with numerous digital endpoints presently in the exploration phase, he added. “It will eventually depend on the amount of use cases seen.”

Although InfoBionic’s remote cardiac monitor MoMe Kardia is used primarily for the diagnostic market and a lesser extent in clinical trials, high fidelity remote monitoring is still essential in both settings, says company CEO Stuart Long. Remote monitoring in pharma is gaining momentum but this has always been the case in the cardiology space since the 1960s. As patients continue to be treated in a virtual setting – either in hospital step-down units, clinical trial sites, or at home – the heightened need for data acuity remains paramount, he adds.

As for other hurdles, a key question for wearable designers is whether the device is the right fit for a specific trial endpoint, especially when an average study can recruit in more than 20 countries and the devices are not cleared in every country today, Reites says.

On Clinical Trials Arena, we’ve been obsessed with DCTs that we’ve built our own tracker. The tracker analyses 12 years of data on DCTs worldwide, based on clinical registry protocols, research papers, and press releases, as curated by GlobalData, the parent company of Clinical Trials Arena. You can find the complete analysis here, and a specific investigation on direct-to-patient remote drug delivery in clinical trials here.

BeiGene reported its Q1 2022 results on Thursday. The company report included total product revenue of $261 million, a 146% increase from its 2021 reporting.

However, despite a growing product revenue, Beigene reported a net loss of $434.4 million for the quarter, driven in part by a loss of collaborations. This time last year, BeiGene reported a net income of $66.5 million for the same period. Additionally, the company’s revenue from this quarter was down 50% from a year ago, from $605 million to $306 million.

Beigene CEO John Oyler also received a substantial salary increase of $16.75 million in 2021, compared to $14.41 million in 2020.

Among its revenue troubles, BeiGene is also facing an audit from the U.S. Securities and Exchange Commission (SEC). In March 2022, the company was identified as failing to comply, although the issue was likely out of the company’s hands, as the city of Beijing has blocked Chinese companies from complying with these requirements by only allowing domestic firms access to audit paperwork.

Regulators and officials from the SEC are now traveling to China to discuss a compromise that would stop BeiGene and 270 other Chinese companies from being delisted. Recently, officials from the China Securities Regulatory Commission discussed whether to permit U.S. regulators to conduct on-site inspections of some Chinese companies, which could hinder the process.

BeiGene has chosen to replace its auditor with one based in the U.S. to comply with audit access rules, a move that will hopefully mitigate the company’s troubles and prevent it from being delisted.

Despite financial troubles, BeiGene is remaining optimistic.

“I have never been more confident in BeiGene. We made terrific progress in the first quarter with our global commercial performance in the U.S., Europe, and in Asia, and we continue to build on our strategic competitive advantages, including breaking ground on our flagship U.S. manufacturing and clinical R&D campus at Princeton Innovation West in Hopewell, N.J.,” said John V. Oyler, co-founder, chairman, and CEO of BeiGene.

To that end, the company broke ground last month on its new manufacturing and clinical center, a 400,000 square foot project that is planned to be dedicated to commercial-stage biologic pharmaceutical manufacturing, with a capacity for up to 16,000 liters of biologics formula. The property was acquired by BeiGene in November 2021, and the space has more than one million square feet of developable real estate for future expansions. The facility is anticipated to help the growth and development of the company’s oncology portfolio.

BeiGene’s product revenue was primarily driven by its oncological therapeutics Brukinsa and Tislelizumab, bringing in $104.3 million and $87.6 million, respectively. BeiGene also highlighted that some revenue was attributed to its cancer therapeutic Blyncyto.

Within its earnings release, BeiGene also provided updates to its development programs, which include the Phase III trial studying Brukinsa, along with a study evaluating its superiority over another cancer therapy in patients with relapsed/refractory chronic lymphocytic leukemia or small cell lymphocytic lymphoma. Tiselizumab is being evaluated in a Phase III clinical trial to evaluate its efficacy in overall survival in patients with previously untreated advanced or metastatic esophageal squamous cell carcinoma.

Need to know:

• Last year saw a record number of M&As among CROs with 50 completed deals. M&A experts and pharma company CEOs we spoke with say this is a signal of technical, financial, and organisational stability for CROs, which is reassuring to their clients.
• However, there are also risks for sponsors, such as the service provider having a changing working environment, and smaller pharma companies may not get the same attention from a larger CRO.

The number of mergers and acquisitions (M&A) among contract research organisations (CROs) saw an uptick in 2021 despite the Covid-19 pandemic. Last year saw 50 completed M&A deals, increasing by 21 completed deals compared to 2020’s 29 M&As.

The record number of CRO M&A deals last year is due to service providers looking to expand their capabilities, and it may be easier to go through an M&A process rather than build the same offering internally, explains senior advisor at investment banking and valuation company Objective David Crean.

There’s been a notable increase in M&A activity in Europe in the past year or so in the clinical research space, Results Healthcare managing director Kunal Kadiwar adds. This rebounded from the first half of 2021 as there was some reservation from parties waiting for clarity on the future direction of the pandemic, Kadiwar explains.

Further, it is hard to do due diligence virtually where there are key in-person elements to the process, Kadiwar notes. In-person meetings are key for relationship building as there is comfort in knowing that what’s presented on paper is the same in person, he explains.

There were 20 completed M&A CRO deals in the first half of 2021, with 30 of such deals in the second half. There are nine completed CRO deals so far for 2022. Further, there are 25 M&A deals that have been announced that are yet to be completed. Six of the top 10 CRO deals were either completed or announced last year, according to the GlobalData Deals Database. GlobalData is the parent company of Clinical Trials Arena.

Why do CROs go through an M&A?

Crean notes that a primary driver for CRO M&A is that these companies want to increase their scale. A prime example is preclinical CRO Charles River Labs which has acquired multiple preclinical laboratories in the past several years, he says, adding scale is also the rationale for clinical trial CRO companies like ICON and IQVIA.

Pharma company clients are attracted to scale because it reduces business risk for the CRO, Crean adds. Scale offers stability for service providers, explains pharma company Cybin CEO Doug Drysdale. Scaling up means increasing capabilities and additional tools, such as decentralisation, as well as widening geographic presence. The challenge with working with a CRO that is too small, says orphan drug company Minoryx CEO Marc Martinell, is that it may not have sufficient reach.

Crean adds that if the CRO does not scale up, there is the business risk of not innovating to attract new clients. CROs need to offer something different and stay on the pulse of the larger clinical trials sector, he says. The idea is to eventually become a one-stop-shop solution, says Kadiwar, which offers better bargaining power for CROs and convenience for clinical trial sponsors.

He adds that M&A can expand a CRO’s offering regarding new therapeutic expertise and capabilities. Also, he notes it allows service providers to have cost and operational savings, and this can potentially be shared with sponsors. When CROs are operating at a critical mass, they are able to justify high investment in technologies that can benefit clinical trial operations such as site identification and start-up activities.

CROs intriguing for private equity investors

Private equity investors find CROs as an attractive asset class, which also drives CRO M&A, Crean notes. Financers provide the CROs capital to accelerate its growth and in three to five years, M&A is put on the table for further expansion. CROs are prime cashflow models which makes them very attractive for private equity investors as an asset class, he explains. 

In general, Kadiwar says businesses with earnings before interest, taxes, depreciation, and amortisation (EBITDA) of GBP5m are contenders for potential acquisitions. “Companies smaller than this may struggle if they don’t have the firepower, unless they are backed by financial investors,” he adds.

Risk for clinical trial sponsors

Not all M&As are successful, opening risks for clinical trial sponsors. Certain M&As may be attractive on paper but combining CROs may lead to complications as they could have very different working cultures, Crean says, or there may be institutional issues that were not known before the M&A was completed. After an M&A, Kadiwar adds, there is the risk that company dynamics might change as the CRO goes through a profile makeover.

There is also the risk of a significant overlap in services between the two CROs, which impacts the intention of boosting the variety of services. “It’s not just about finance – it is important to acquire the right company,” Crean continues.

On the other hand, combining CROs that complement each other can be a good thing, Bone Therapeutics CEO Miguel Forte explains. That’s because even if they are in the same space, such as in cell and gene therapy, there are details where one CRO may have more experience than the other he adds.

For a company whose most advanced asset is in early-phase, Cybin is conscious of the risk of working with a too large CRO as the service provider may not offer enough attention to the clinical trial. A large CRO has the advantage of aggregated experience to cater to the clinical trial sponsor’s needs, Martinell says. However, the team that is assigned to the sponsor may not have the required experience, meaning the collective knowledge of the service provider may not necessarily reach the sponsor, he explains.

Forte says sponsors should seek reassurance that talent, focus, and relationships be retained if the CRO is amidst an M&A. While the M&A transition period can present teething issues, it is unlikely that any impact on an ongoing clinical trial would be felt as pre-existing services are likely to stay is the same, he adds. However, he notes, further partnerships between the CRO and the sponsor could be at risk especially if the CRO changes focus.

CROs with geographic scale are valuable

Cybin announced on April 21 that it chose the CRO Clinilabs to help run its Phase I/IIa trial investigating its psilocybin analog CYB003 in major depressive disorder (MDD). It started looking for a CRO more than a year ago, Drysdale notes.

Despite CYB003 having a psychedelic mechanism of action, it went for a CRO with experience in central nervous system and psychiatry clinical trials. Cybin’s future studies of CYB003 will require multiple countries, and smaller CROs that specialise in psychedelics may not be equipped to deliver, Drysdale says. “We wanted a CRO with the capacity to grow with the trial.” The trial is scheduled to start in mid-2022.

From the perspective of an orphan drug pharma company, Minoryx’s Martinell says its key challenge is that it only has a small patient and clinical trial site pool to recruit from. In fact, there are times when there is only one trial site per country.

This means relationships are important, Martinell explains. The pharma company and the CRO need to foster these connections as these clinical trial sites  also grow with the investigational drug as it progresses through trial phases. Further, the CRO’s broad reach in multiple countries is also critical, he notes, adding that missing a patient is not an option. “Every single patient counts.”