ROW2 Technologies is delighted to bring to you the Second 2010 Outsourcing Special issue of CI2E Quarterly. Outsourcing has been in existence as long as work specialization has existed. Of late, it has started gaining a lot of importance and significance in the Pharma and Life Sciences industry also. Thus, this quarter, CI2E provides an insight to the outsourcing trends and strategies to it 5000 plus readers from Life Sciences and Chemical industries through its Outsourcing Special issue.

• ROW2 World: Updates on ROW2 and its offerings


• Article: Outsourcing in Pharma industry: From a Crisis Answer to the Strategic Choice


• Interesting Links: Links to various interesting “Outsourcing” related articles


• My Forum: Jennifer Jessup, Brand Director of Informex speaks about their upcoming event, Informex Latin America in Brazil


• Entertainment: Interesting Quotes on Outsourcing and more...


• Upcoming Events: Important Outsourcing related and other events in 2010

  ROW2 World :

ROW2 News

• SmartChem will be further enhanced: SmartChem will soon be enriched with detailed schematic representation of routes. Read on to know more on this enrichment.
• ROW2 continues its value-adding initiatives: It has always been our aim to keep our customers and industry colleagues updated on the latest industry events and conferences. In the second quarter of 2010, ROW2 has continued to make its industry contacts more vigilant on the upcoming international trade fairs and events with the help of its timely Event Alert mails.
• ROW2 brings back the excitement: ROW2 organized a SmartChem Twenty20 Cricket Contest 2010 in May to bring back the excitement of its Indian SmartChem users who were otherwise, very sad with India’s early exit from the World Cup. This contest brought with it loads of fun and fabulous prizes. Hearty Congratulations to all the winners of this contest!
• ROW2 at major events: ROW2 representatives were present at Chemspec India held in Mumbai, India on April 15-16.
  
  ROW2 will be participating in Scientific Update’s OPR&D to be held in Barcelona, Spain on September 13-15 and ChemOutSourcing to be held in New Jersey on September 14-16, 2010.
  
  Read on to learn about the major events related to Outsourcing and the upcoming events of August and September 2010.
• Webseminar: ROW2 will soon be hosting a Webseminar on Process Research related topics. We will be shortlisting the appropriate topic soon. We also invite your suggestions for the suitable topic to discuss during the Webseminar, which will include the thought leaders and industry veterans. Please write to us here to suggest your topic and to register for the speaker position in this Webseminar.

SmartChem News

• Orientation to new SmartChem users continues: We believe in providing the best services to our customers and want value for money for them. Keeping this in mind, we had designed a special SmartChem Orientation Program for the new members of the SmartChem Family.
  
  This program continues to help them know more about SmartChem – features, benefits and testimonials from other SmartChem users and also assists them in deriving maximum benefits from our various value-adding initiatives. This program has received lot of appreciation from the users who benefited from it.
  
  To get your SmartChem Orientation Kit, please contact us here.
• Upcoming enrichments: Based on the feedback and suggestions received from our customers from time to time, ROW2 will soon enrich SmartChem with the following –
  • Schematic Representation of routes
  • Usability Enhancements
  
  
  To know more about these enhancements, please write to us here.

RouteDesign News

• The Top Pharma employs RouteDesign: As per a recently published report in a leading Pharma magazine, 8 of the top 10 Pharmaceutical companies are using our flagship offering, RouteDesign. It gives us great pleasure to announce that RouteDesign is now being used in almost all the phases of drug development cycle. It is increasingly helping our customers to save resources, generate intellectual property and realize increased returns on R&D investment.

To get case studies on how we have provided these RouteDesign benefits to our customers, please write to us here.

Outsourcing in Pharma industry: From a Crisis Answer to the Strategic Choice

Author: Fabrizio Conicella¹

The 2009 financial crisis, not yet ended, has been at the basis of a consolidation and restructuring process inside big and medium Pharma companies. The M&A trend, started before the crisis has been amplified and several “Big Pharma” have decided to rationalize their R&D and manufacturing processes. The “cut cost” syndrome has been one of the reasons why R&D centres have been affected by an “aggressive reorganization” with job places losses. The need of a compression of the products life cycle was the second element that Pharma companies took into account.

At the same time the outsourcing trend has characterized the development of big and small companies at several levels:

• Outsourcing of non core activities or simply to optimize costs
• Outsourcing of activities that are simply better realised outside
• Outsourcing as implementation of a virtual organizations

Back-offices activities externalisation (e.g. ICT, logistics, procurements, etc) was a well-known reality in the Pharma sector. As a report stated “The Pharma industry is characterized by a long R&D cycle with an acute need for speed to market. Consequently sales force automation and back-office functions are culturally very easy to outsource if they improve speed to market. Core competencies like R&D don’t get outsourced as often. Manufacturing outsourcing is usually done only for drugs about to come off their patent.”²

But the reality of Biotech sector showed that small and flexible companies are simply more productive, in term of “R&D outputs”. The complexity of some technologies that require specialised and focused teams, the complexity and cost of preclinical activities, the need to reduce the risk of failure (particularly in preclinical and first clinical trials phases) and the goal to speed up development times and access to markets, have changed the competitive environment. In consequence we can highlight 4 categories of outsourcing companies that are targeted by Big Pharma:

• Biotech Companies
• CROs (Contract Research Organizations)
• CMOs (Contract Manufacturing Organizations)
• Co-marketing & CSOs (Contract Sales Organizations)

The identification of state-of-the-art technologies/unique skills seems to be the main driver, together with the cost factor, that has affected the outsourcing scenario in the last 4 years. In this scenario, Pharmaceutical companies have recognised the need to leverage in-house resources with specialized and competent partners in order to be more competitive and to maximise the returns for shareholders.

It is clear that the outsourcing market is more and more based on complex relationships that are quite different to the traditional approach of outsourcing. It is not anymore a simple choice of “make or buy”. Outsourcing is becoming a strategic choice where the term “alliance” is probably more adopted than “commercial relations”. This is particularly true for drug discovery phase but also preclinical developments and contract manufacturing that are more and more characterised by long-term relations.

If this approach is amplified in virtual organizations, in medium biotech companies and in medium to big Pharma companies, it is more and more frequently a strategic choice to survive on the short term and to be more competitive on the long term.

Some problems are still present: the outsourcing solution cannot be a “fire and forget” activity. It is necessary to manage it, building transparent and cooperative relations with the partner. It is necessary to create a “win-win” scenario in order to maximise the overall value of the relation and to avoid pitfall. Outsourcing is, not in the actual world, a tool to overcome short-term problems. It is a very strategic way to cope with tactical problems of competitiveness and optimization of costs both in small and medium to big organizations. In such a way, outsourcing is also an opportunity for the growth of specialised service providers. But the outsourcing market is really competitive and a “natural selection process” will occur. Only organisation that will be able to create a niche of absolute specialisation or that will be able to create entry barrier at territorial level or that will be able to reach economies of scale will be able to survive or grow.

In any case, it is easy to understand that it will be an interesting story...

About the author - Fabrizio Conicella
General Manager - BioIndustry Park Canavese
conicella@bioindustrypark.it

1. Bioindustry Park Silvano Fumero SpA bioPmed cluster– ITALY - www.bioindustrypark.eu – www.biopmed.eu. Thanks to Ms. Soumaya Koptele for the support in writing this article.

2. Equaterra “The Issue: Outsourcing Trends in the Pharmaceutical Industry” By Stan Lepeak, Vicki Tauscher-Phelan – www.equaterra.com

For this Outsourcing Special Issue, below are some interesting articles related to Outsourcing:

Emerging Outsourcing Destinations for R&D and Clinical Trials
Published in DrugDevelopment Technology.com: Mar’10 issue

This interesting article shows how the focus for R&D and Clinical Trials is shifting from West to the Developing Countries. These countries are being seen as the most cost-effective and ideal locations for outsourcing.

Top 10 Outsourcing Trends in ‘10
Published in Outsourcing-Pharma: Jan’10 issue

This article sheds light on the positive predictions made by IAOP for the year 2010. With the help of this article, you can comprehend that although the economic recovery will resume the delayed deals and increase hiring, yet the uncertainty will tend to prevail and the markets will continue to fluctuate.

Pharma Outsourcing
Published in C&E News: Mar’10 issue

An illustrative piece of information which shows that the economic ups and downs sometimes do not hamper the relationships between drug companies and chemical outsourcing partners. This is because these relationships last for decades.

Managing the Three Drivers of Risk in Drug Development
Published in PharmExec: Apr’10 issue

Read this article to know how an array of new business tools and platforms can help pharmaceutical companies leverage their assets in managing the three principle sources of risk: Portfolio, Operational and Resource risks.

Important Outsourcing Events and Conferences – 2010

Sept 14-16: ChemOutsourcing: NJ, USA

Sept 23-24: Contract Pharma’s Contracting and Outsourcing 2010: NJ, USA

Sept 29-30: Outsourcing in Clinical Trials North East: Boston, MA, USA

Oct 05-07: ICSE: Paris, France

Important Events in July’10 to Sept’10

• August:
• 17-19: CPhI South America: Buenos Aires, Argentina
• 23-24: Informex Latin America: São Paulo, Brazil

• September:
• 13-15: OPR&D: Barcelona, Spain
• 14-16: ChemOutsourcing: NJ, USA
• 15-17: BioPharm America: Boston, MA, USA

Jennifer Jessup, Brand Director of Informex speaks about their upcoming event, Informex Latin America in Brazil

The Informex Latin America event has been designed with your company’s goals in mind, to provide you with absolutely critical information for doing business in the chemical industry in Brazil. The two-day show will take place from August 23-24 in Sao Paulo, Brazil at the Amcham Convention Center, and includes table-top exhibits and conference sessions. Register today!

Interesting Quotes on Outsourcing –

John Kerry, who says he doesn't like outsourcing, wants to outsource our national security.
Zell Miller

If you deprive yourself of outsourcing and your competitors do not, you're putting yourself out of business.
Lee Kuan Yew

Reliable data on the outsourcing of American jobs is sorely missing from the debate on globalization.
Dan Lipinski

The other part of outsourcing is this: it simply says where the work can be done outside better than it can be done inside, we should do it.
Alphonso Jackson

Have a Laugh –

Fairytale Forest

Queen: Mirror Mirror on the Wall, Who’s the fairest of them all?
Mirror: AISHWARYA RAI
Queen (To King): I think the mirror has been outsourced to India.