New Financial Realities Will Alter Biopharmaceutical Outsourcing Landscape

CROs and CMOs could face diminishing opportunities and escalating competition in the days ahead.

A variety of forces are combining to fundamentally change the financial dynamics of the biopharmaceutical industry. The initial public offering (IPO) appears to be giving way to licensing arrangements with, and acquisitions by, major pharmaceutical companies. If this trend continues, an even greater share of outsourced drug development and manufacturing business will be controlled by big pharma, and that has major implications for contract services companies.

The IPO has been the traditional avenue by which early-stage companies raised capital necessary to fund late-stage drug …