The Challenges of Chinese CROs Business SWOT analysis. Mr. Jack Xu, MD, MPH Vice President, SCRC June 8, 2012 Shanghai, P.R.

Transcription

1 The Challenges of Chinese CROs Business SWOT analysis Mr. Jack Xu, MD, MPH Vice President, SCRC June 8, 2012 Shanghai, P.R. China 1

2 申明 信息是本人的经验或学习理解 部分幻灯片中文, 部分英文, 未统一成中文, 请谅解 欢迎指正 2 2

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4 中国致人命的药品问题 2012/6/10 4 From Tikki Pang, Dec 10, 2009

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6 In year 1997, Quintiles Started its business in two big countries Beijing, China Ahmedabad, India 6

7 Quintiles in China years "Since first establishing its presence in China in 1997, Quintiles has set up three offices around the country - one in Beijing, Shanghai and Hong Kong - and will continue to expand. The company plans to bring its total number of staff in China from the present 80 (May 29,2008) to 120 by the end of this year Lai-lee Tan, Chairman and CEO of Quintiles China,May 29, 2008, INTERFAX-CHINA 7

8 Quintiles in India years "Since establishing an office in Ahmedabad 10 years ago, we have added offices in Mumbai and Bangalore with a full complement of services, expanded our clinical research staff to 750 and have conducted more than 700 global trials across business lines. Dr. Dennis Gillings, Chairman and CEO of Quintiles April 6,

9 Why so huge difference? What are the main challenges to conduct trial in China? What is the good strategy to conduct trial in China? 9

10 Main content 1. The History of China CROs industry 2. Today s China CROs: SWOT 3. Future development My talking is meaning Local CROs SWOT! 10

11 Thanks May I ask you two questions? How about your experience with China local CRO, are you happy? What is your concern when you choose a China CRO? 11

12 2011 survey by Avoca group data showed: The sponsors and CROs relationship? The fundamental question is: How are the two groups getting along? Sponsors side: Satisfied rate increased to 80%; dissatisfied rate 7%. I think China situation is not as good as this! Outsourcing-Are-We-Having-Fun/ArticleStandard/Article/detail/

13 What is CRO? FDA Definition: See 21 CFR 312.3(b) A CRO is a person (i.e., a legal person, which may be a corporation) that assumes, as an independent contractor of the sponsor, one or more obligations of the sponsor, such as design of the protocol, selection of the research site(s), monitoring of investigators, evaluation of the study data, and/or preparation of materials to be filed with the FDA. ICH Definition: See GCP 1.20 A CRO is a person or an organization (commercial, academic, or other) contracted by the sponsor to perform one or more of a sponsor s trial-related duties and functions. 13

14 CRO Market Estimated CRO total market, Source: The CRO Market Outlook, Business Insight,

15 CRO Market Revenue forecasts, China Source: The CRO Market Outlook, Business Insight,

16 CROs --- A Short Story 1970s 1980s Research Institutions in USA (state-owned/private) embryo of CRO New drug development becomes more complex and time consuming generate CRO 1990s 14 CROs become the listed companies in USA CRO industry 1996 MDS Pharma Service First CRO in China Quintiles Transnational, Covance, Kendles follow up 1998 SFDA Established 2003 Chinese GCP Chinese local CROs 16

17 CRO Industry Worldwide: over 1000 CROs A small group of large: full service, 45% of the total market Quintiles, the market leader with 14% of the global market share Covance and PPD, holding 10% each Small to mid-sized entities: a more limited menu of services including Niche CROs China: Global CROs >10 (nearly top 10 here) Joint Venture about 10 Local CROs over

18 Main content 1. The history of CROs industry 2.Today s China CROs 3. Future development 18

19 China CROs scope of work Product Development Regulatory affairs Project management Manufacturing Site management Medical translation Study logistics, drug supply IVRS Central lab GXP compliance Pharmacovigilance Quality Assurance SAP CRF design Data management (local) Biostatistics Medical Writing (local) Etc No Full service in one company! Both Global and local More than one CRO for a project! 19

20 China CRO industry SWOT Strengths???? Weaknesses Opportunities???? Threats Different person, different opinion! 20

21 SWOT Analysis --- Strengths Cost savings in China, Yes or? Large patient and investigator pools Reduce time to complete trials Wide range of service Experienced in most therapeutic areas...hepatitis B, CVS, Diabetes, Liver cancers. 21

22 Strengths Availability of Patients for Trials Numbers: Population 1.3 Billion 250 million covered by insurance 250 million partially covered by insurance 800 million not covered by insurance Concentration of Patients in a few of big cites 22

23 Strengths Costs Item US Cost China Cost 1 Day Stay in Hospital $750 to $1000 $40 to $100 1 Day Stay in ICU $1500 to $2000 $80 to $150 CT Scan $300 to $550 $100 to $150 Pet Scan $2,750 $4,500 $900 to $1,200 MRI $1,500 to $3,500 $150 to $300 EKG $30 $4 to $6 Colonoscopy $375 or diagnostic; $550 for therapy with ablation $50 to $100 CT Directed Biopsy $325 to $450 $100 to $200 Senior Oncologist Annual Salary $225,000 + $ for key opinion leaders Source: Mark Engel, Drug Development in China: Opportunities and Challenges A Clinical Trial Perspective 23

24 Strengths Costs Pre-Clinical (estimates) Chemistry 30% to 60% of the cost of West Other Pre-clinical Toxicology 30% of the cost of the West Animal Testing 30% of the Cost of the West Clinical (estimates) Phase I 15%_50% of the cost of the West Phase II/III 20%-60% of the cost of the West Now the situation may not!! Source: Mark Engel, Drug Development in China: Opportunities and Challenges A Clinical Trial Perspective 24

25 China CROs weakness Lack of professional team Small scale business (less than 500 staff-clinical) Short history: no global experiences Limited operation in China, no global player Quality assurance system not robust Service Scope is small, no full service provider Financial Stability not for sure Training system is not well The staff turn over rate is too high 25

26 SWOT Analysis --- Weaknesses Long CTA approval time in China High requirement of application data and materials Quality of Data High staff turnover rate Quality control at site Blood sample exportation permit needed... 26

27 Weaknesses CTA approval time Source: Clinical Trial in China Regulatory Update, Monitor April

28 China CROs competition Low Price competition! Not as mature as a service industry! 28

29 Opportunities Increasing complexity of clinical trial China market is huge, clinical research marketing is increasing. Regulators are asking for more data to support claims, requiring more and larger trials R&D expansion in China. (all top 10 Pharma companies have R&D center in China) 29

30 SWOT Analysis --- Threats Competition from Global CROs Growing competition from other emerging markets (India, Brazil, Russia) Merger and acquisition in pharma industry reduces outsourcing expenditures... 30

31 Threats Competition from Global CRO Most of the service providers detailed in this chapter have grown considerably over the last five years by expanding their overall global presence in emerging markets... 31

32 Main content 1. The history of CROs industry 2. Today s China CROs 3.Future development 32

33 China CRO industry just like a small plant! Need to learn from global players! Grow up in its Chinese way! 33

34 Tips to be the great CRO(1) Professional, motivated, dedicated and focused staff with thorough, up-to-date training (training logs including internal vs external training opportunities) Completed and practical SOPs, Good Project Management Tools and Project reporting tools, e.g.: internet system, spread sheets, prompt meeting minutes Low turn over rate: Stable project team members Strong Expertise in target indication: in house vs external consultants Large database/network of vetted investigative sites (experienced investigators pool) Testimonials customers (sponsors), investigator site good comments Good performance and good reputation (Audit reports, inspection outcomes) 34

35 Tips to be the great CRO(2) Short study start-up times Quick Recruitment speed (actual vs projected) High Patient/site ratio Data integrity/query resolution Number of indications patients trials sites countries (where, and since when) Strong alliance with Global Sponsors Real Drugs brought to market; success cases in phase

36 Tips to be the great CRO(3) Demonstrated leadership in industry organizations Repeat Sponsor awards (best recruiting) Composition of Scientific Advisory Committee/Board Members Professional certifications (lab professionals) Membership in professional organizations: Association of Clinical Research Professionals (ACRP); DIA; etc 36

37 Development trend Both comprehensive and specialized outsourcing one-stop service: from discovery to market focus on niche market: eg. hepatitis, cancer Improve service quality the implement of GCP SOP Regulation Formulate industry norms (be more professional) 37

38 Development trend Upgrading management level speed up clinical trial process enhance the relationship with site utilize EDC system Industry restructuring Excel was merged by PPD, More mergers among the small ones! 38

39 Industry Restructuring : M&A 03/ / /2009 Tigermed tied up with Qiming-Ventures has purchased MacroStat Tigermed, a leading local CRO in China which was invested by Qiming- Ventures in 2008 MacroStat, a specialized CRO in DM and Statistics Analysis PPD has purchased EXCEL with US$ 20 million PPD has purchased BioDuro (China) with US$ 77 million PPD, a leading global CRO providing overall outsourcing service EXCEL, a clinical CRO in Phase Ⅱ-Ⅳ Clinical Trial established in 2000 BioDuro (China), an outsourcing services company spanning the entire range of drug development 12/2009 Pharmaron has purchased Bridge Laboratories (China) Pharmaron, a typical local CRO in China providing overall outsourcing service Bridge Laboratories (China), a largest preclinical CRO servicing for International Pharmas & Biotech 39

40 China CRO industry future? 40

41 Quality FDA inspection report Some successful studies in China 41

42 FDA investigators inspections in China to Feb 2012, total 15 inspections

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44 崔永元 : 我把中国当下知识分子分成三类 : 一类叫拍案而起 ; 一类叫洁身自好 ; 第三类叫随波逐流 从历史角度看, 最需要的是拍案而起的知识分子 现在中国的知识分子, 能做到洁身自好就相当不错了 哪一次商业炒作, 哪一次对消费者 读者 公众的欺骗, 后头没有学者 科学家甚至院士帮忙? 哪一次没有?

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