Is A Partnering Model The Best Option For Small Biotechs?

By Ed Miseta, Chief Editor, Clinical Leader

Large pharma companies have a variety of outsourcing models they can use, from strategic partnerships to functional service provider models. But if you are a small biotech company, does the size of your firm limit your outsourcing options? When you are ready to outsource, are you better off going with a large or a small CRO? And how big a role should cost, therapeutic expertise, and geographic location play in that decision?

Leslie Chong is the CEO of Imugene, a small biotech in Australia working on treatments for oncology patients. I spoke with her about the process she went through in selecting the right CRO model for her firm and how she was able to decide on the best partner for her studies in Asia.

Miseta: For a small company, how do you decide if you should select a single CRO partner or go with an FSP (functional service provider) model that uses several?

Chong: This is a straight-forward personnel issue. If you have several different vendors or CROs performing work for you, you also need a very strong internal staff to be able to manage all of them. You can’t assume your CROs will be communicating with each other. You must have someone in the middle of the hub making sure the communication is free flowing. You need a strong staff to make that happen. If you opt to have several CROs managing individual aspects of the trial, you will also need to have a very strong internal management person or team.

Staffing is also the primary reason why most small biotech companies will outsource 100 percent of their trials. But if you are going to fully outsource your trials, you also need a very strong VP of clinical operations. This person has to be able to manage that outsourcing model.

Miseta: Are the trials at Imugene fully outsourced?

Chong: Yes, and I have chosen to outsource most of our operations to one CRO. I will also use consultants for a few areas of specific expertise.

Miseta: Any tips on hiring the right consultant?

Chong: When hiring a consultant, it helps if that person is someone you know and trust. I have a large network of industry connections due to my past history in pharma, which has made it easier for me to find the expertise I require.

For example, I spent time at Genentech, Exelixis, and GSK. Some of my former colleagues, peers, and managers have since become consultants. If there is expertise I need, I have all of those trusted contacts to fall back on. I tend to tap into that network of connections quite frequently, since it is always nice to be able to go back to former colleagues for help in certain instances.

Miseta: Once you decided to go with a single CRO, how difficult was the process of selecting the right one?

Chong: This is another area where I had some prior experience. During the time I have spent in the biotech world, I held positions in vendor management and as part of a governance body across several different CROs. This has given me a wealth of experience with a myriad of different CROs and outsourcing models ranging from partial outsourcing to fully outsourcing.

Still, when coming to a small biotech company, I had several decisions to make. Once I decided to work with one CRO, I still had to decide if it would be a large CRO or a small niche CRO. A large CRO will have all of the skills and expertise you need, but you could be a small fish to them. If you go with a small CRO, they may not have as much experience, but you will be a top five client and receive the service they reserve for their top clients. The situation is further complicated by the fact that many of the large CROs are now catering their services to small biotech firms. Some large CROs offer a very personalized trial team while others offer more generic, middle-of-the-road management resourcing and staffing services.

Miseta: What are some of the factors you looked at?

Chong: I am with a small biotech, so cost is obviously something I have to consider. But you also have to keep in mind that you get what you pay for. What I really tried to do was determine each company’s level of expertise. For example, if I am looking to conduct a trial in a particular country, I am going to look at each CROs experience in that country.  It's the experience within that country that's going to help me in the long run, not the size of the CRO or the name over the door.

My study was located in Asia, so I needed to get a CRO that was familiar with Asia and had staff members with experience in the countries we were working in. I asked numerous questions about staff experience and the success they had in various countries.

Miseta: Which CRO did you land on?

Chong: We selected Novotech. I would describe them as a small CRO that specializes in Asia.

Miseta: I have spoken to clinical executives who preferred a small CRO but were pressured by their board or investors to go with a larger one that was more well-known. Did you face any pressure when making your decision?

Chong: I was able to make the decision on my own. But I would add that I did interview some of my hospital sites and doctors and asked if they had a preference between a large or small CRO. They all told me the CRO size did not matter to them.

I am concerned about finances and our investors, but they're not ultimately going to be responsible for the study. What I cared about most is that my sites were being taken care of and the CRO would deliver the results I expected based on their experience.

Miseta: Any final advice on companies moving from discovery to clinical?  

Chong: I would add that when starting a new trial, you need to be a master forecaster. You can’t just look at what you need now. You need to look ahead and determine what you will need in the next 6  to 12 months. Projecting and always looking forward are critical to the success of your study, and it is a big help to have a CRO partner that can be an instrumental part of that planning. A CRO with experience in your therapeutic area and the countries in which you conduct trials can best assist you with that forecasting.

For me, going from a discovery company to a clinical-stage company was like night and day. Discovery is focused on research and making sure that process is running smoothly. When you get in the clinic, you will find there are many things that are simply beyond your control. Surprises will arise, and you protect yourself from them by having the right staff, the right systems in place, and proper risk mitigation plans continuously ongoing. Sometimes that means quickly ramping up or ramping down. In the clinic, you are a different company. That means you and your CRO have to be much more agile in many ways.