The shifting nature of veterinary pharmaceutical R&D delivery…a new niche opportunity
Increasingly, large pharmaceutical companies are evolving their business strategies and are incorporating outsourcing of R&D as a norm. Traditionally, large pharma companies would operate in house R&D activities. Nowadays, a multifaceted approach exists for delivering new technologies incorporating in house R&D activities; use of contract research organisations (CROs); and utilising venture capital funded start-up companies.
Why are veterinary pharmaceutical companies moving to favour outsourcing of R&D?
Companies are moving away from solely internal R&D activities for multiple reasons;
- With major veterinary pharmaceutical companies now being publicly listed entities it is harder to justify in house, large financial outlays over significant time periods, involving what is often high risk to potentially deliver on R&D. Company shareholder – especially pension funds, are keenly focused on immediate investment return for their stakeholders
- Outsourcing R&D activities may better manage financial outlays initially in R&D programs; better manage company risk while still focusing on the potential for high ROI
- CROs and start-up companies are by nature solely focused on the specific contracted work at hand so aim to be effective, efficient and outcome focused
The rationale for this shift in direction by veterinary pharmaceutical companies seems logical – CROs are well equipped and can be flexible with their resources to service clients. By effectively using multiple CROs or start-up companies solely or in parallel with in house R&D activities, veterinary pharmaceutical companies can better manage the risk, control cash flow and potentially increase the odds of discovering and developing the next industry block buster be it in therapeutics, biologics, feed additives, diagnostics or new technologies.
How are companies outsourcing R&D?
So this model makes sense, doesn’t it? More and more start-ups are emerging and driving innovation. The model could work multiple ways, for instance:
- A veterinary pharmaceutical company could approach a CRO and outsource the R&D with only a minimal, manageable financial investment that would fit within the new risk appetite of companies. If this R&D investment is a success then a future new product may await the veterinary pharmaceutical company to take to product to market. If the R&D investment is not successful then the veterinary pharmaceutical company still retains the IP within that research potentially for future use.
- Some veterinary pharmaceutical companies have been allocating funds establish start-up companies focused solely targeted discovery work. The start-up company operates with defined funds and if eventually the discovery work is not viable then that company can be wound up with the financial the risk having been mitigated. This strategy has the potential for high ROI paired with low risk/high opportunity.
- Alternatively, start-up companies may have novel/innovative technology and independently partially develop this. Veterinary pharmaceutical companies may then invest in this new technology or even acquire the start-up company. Either outcome could be financially more effective than undertaking the original high risk R&D in house.
These models seem to work and are also providing an opportunity for expansion of the CRO sector.
RRL is a service provider for pharmaceutical companies
RRL is well equipped to address the volume and variety of research required, and are well versed in functions such as regulatory submissions and project management. We are GLP accredited and work to VICH GCP standards at all times.
We have extensive experience in the following types of studies and research:
- In vitro and in vivo proof of concept
- Preliminary dose discovery
- Pharmacokinetic studies
- Evaluation of diagnostics
- Discovery/development of diagnostics
- Feed additive development
As a specialist CRO, Ridgeway Research Limited is well versed in these types of studies and therefore may offer you a more efficient alternative to focusing just on in house development efforts. We are fully set up to start studies at the request of a client.
For more information, please send us an email at email@example.com, fill out our contact form with your study details here or give us a call and speak to us in person on +44(0)1594530809. You can alternatively find more information on our website.