CRO deals approach $10 billion in January-April 2015

July 27, 2015

Contract Research Organizations (CROs) are growing in importance as pharmaceutical firms seek to contain the costs of R&D and clinical trial activities. With drug development …

Contract Research Organizations (CROs) are growing in importance as pharmaceutical firms seek to contain the costs of R&D and clinical trial activities.

With drug development and clinical trial costs going up, pharmaceutical companies have been outsourcing these activities to CROs in an effort to improve cost-effectiveness and balance R&D expenditure and profitability.

In response to this trend, CROs have entered new regions and added new services.

This increase in CRO activity is reflected in the growth of deal-making activity in the CRO market, with the value of these deals reaching almost $10 billion between January and April 2015.

A new report from business intelligence provider GBI Research on global deals and operational strategies in the CRO market reveals that the total number of deals reached 700 between January 2010 and April 2015, achieving an overall value of $33 billion.

In the first four months of 2015 alone, the deal value reached $9.86 billion. Much of this was due to Laboratory Corporation of America’s (LabCorp) record $6.1 billion acquisition of Covance in February 2015, which enabled LabCorp to strengthen its laboratory and CRO service offerings.

Priyatham Salimadugu, associate analyst at GBI Research, said: “While acquisitions achieved the highest deal value globally between January 2010 and April 2015 as a result of this transaction, venture financing represented the highest number of deals during this period, with 134.

“The U.S. was the top market for overall CRO deal activity with 337 deals, accounting for a 48 percent share of the global total, largely due to the majority of leading CROs being headquartered in the country.”

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