On the Pfizer deal: It basically entails clinical development work and associated tasks around the world. It's pretty much across the board, but a lot has not yet been decided exactly. Over next several periods, we’ll work on those kinds of details....Our understanding is that it's more later stage. That’s where more of the activity is...We have similar deals with other drugmakers...There is Glaxo, BMS, Merck, plus others others that are unannounced...But the companies are not taking a cookie-cutter approach (to their decisions about outsourcing and working with CROs)...Pfizer, of course, has already outsourced a lot...For them, it's mainly a redirecting of their outsourcing to two providers versus starting outsourcing in the first place...But it's a global deal...I expect the work we will do will reflect Pfizer work around the world, both global and domestic.
On the recent Parexel restructuring: The restructuring we announced is focused on early phases. The business is undergoing significant changes. The healthy volunteer – the classic pharmacology business, which is typical Phase One as we know it, has declined. That was the majority of what we did in the past. Where the growth is and where the portfolio has grown is in patients…We’re taking down 25 or so percent of our capacity in our Phase One units. But at same time, the intent is in initiating more growth in the patient area. I think what prompted the change is the portfolio profile...And companies don’t necessarily have a presumption of success. In the past, they basically went at development of every compound as if it would succeed…and do all tests possible. Increasingly, companies are making their decisions understanding that the majority of products that will get into the piepilne will fail. Therefore, you don’t want to do tests that are unnecessary. The result, basically, was a decrease in demand for certain pharmacology tests, but may effect pre-clinical even more. And the financial crisis put a lot of smaller companies under pressure and so they didn’t have money anymore to take those compounds into man.
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Ed, I admire you for sticking to the subject in this interview. If this were a "gotcha" interview, as I've referenced in the Eric Dezenhall thread, you might have been tempted to ask the CEO the following question:
"What steps has your company taken to avoid future Phase I disasters such as occured in the TGN1412 study?
http://www.hc2d.co.uk/content.php?contentId=131
Looks like Parexel is shifting its focus to big pharma deals and steering away from their biotech roots, hence steering away from smaller companies (aka mostly biotechs) that are not able to take drugs into man. This is why they are restructering as many CROs tend to do once they change their strategy and focus. The industry is a tough one as they are always chasing the backlog in hopes that margins will be better the following year (e.g. refocusing strategy plus restructering).
Exec, as you know the big bucks in CROville are not in Phase I, but in Phase III and even more so in Phase IIIB. It's Jerry Maguire redux , Pharma version, i.e. "show me the money".