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Oct 26 2010

Vendor Selection – All that Glitters is Not Gold

One of the most important, and difficult, decisions a company has to make is selecting the right contract research organization (CRO) for outsourcing its nonclinical, manufacturing, clinical and regulatory activities.  Several variables determine what makes a good outsourcing partner – size compatibility between CRO and sponsor, the cost, and the experience level of the CRO with the sponsor company’s technology/indication, being some of the most obvious decision makers.

Download our free PDF reference table, “Factors a Sponsor Company Should Consider Before Selecting Outsourcing Partners.”

Since changing vendors mid-stream of a development program results not only in the loss of time and efficiency, but also of historical and technical knowledge of the product being developed, it critical that CRO selection also be based on ‘hidden’ factors.  Subtler considerations in selecting an outsourcing partner include evaluation of how active the CRO’s employees are in the local biotechnology community, as participants on panels and at key industry events.  A company’s web presence, where it might showcase its expertise through blogs, for example, is another indicator of the quality a vendor is likely to be able to provide.  Finally, a company’s local reputation is probably the most critical information a sponsor should initially consider.

In today’s cash strapped economic climate having a partner that can see you through tough times is also important.  Realizing the challenges that start-up and small biotechnology companies face, several full-service CROs like Cato Research, as well as nonclinical CROs, can assist with “funding” of ongoing programs.  Cato BioVentures (venture arm of Cato Research), for example, offers promising life science companies immediate access to a broad range of essential CRO services on a partial-cash basis.  These services are often commenced in a “bridge mode” during the period between a company’s formation or initial angel financing and its first institutional financing.  The services can include preparation and attendance at an FDA pre-IND meeting, filing of the IND, or conduct of the Phase 1 trial, all of which enable companies to achieve key value‑added development and regulatory milestones with less reliance on venture capital and public equity markets.  Such a model, where strategic partnerships are developed between a CRO and a new company can also provide confidence to the lead investors who are financing a new technology.

When done right, a partnership between a sponsor company and a CRO can result in the execution of an efficient drug development program.  Careful vetting of the CRO early on in development, and strategic integration of the CRO’s services into a long term development plan are likely to build a strong foundation for a rewarding and productive relationship.

This is a post by Tariq Allana, Ph.D.  Tariq is a Clinical Strategy Scientist and Associate Director of Business Development for Cato Research.  Scott Burian, Ph.D., Associate Director of Pharmaceutical Development, and Rick Stewart, Ph.D., Principal Toxicologist and Associate Director of Nonclinical Safety Development, also contributed to this post.