Exploring a new operating model when dealing with early phase biotech companies

By Katrien Reynders, Consultant with CRO and biotech experience

Exploring a new operating model when dealing with early phase biotech companiesKatrien Reynders-Frederix has broad experience in both CROs and biotech and pharma companies across the full clinical development life cycle. Here she explores the potential of a new operating “hybrid” model.In the last decades, outsourcing has become well accepted and practised across the life science industry. According to a recent trends report, the contract research organisation (CRO) services market size will even double in the next five years. An effective partnership between Sponsors and CROs is therefore of the highest importance and it all starts with selecting the right partner. A partner with a cultural match and that implements a tailored operating model for your project: two aspects that are underestimated or not considered.This “food for thought” article reveals some potential obstacles in the collaboration with early phase biotech companies and tackles these by exploring a new operating “hybrid” model.

“Choosing an outsourcing vendor is like picking a spouse. You can search for a long time, but the right partner ultimately is the one you can trust”

“Choosing an outsourcing vendor is like picking a spouse. You can search for a long time, but the right partner ultimately is the one you can trust”¹. That trust can easily be broken when the collaboration turns to fire fighting or pointing fingers with growing tension. Such battles trigger the question: could this have been avoided?During the selection phase, many aspects are considered and weighted by the Sponsors. Aspects that are often neglected or underestimated are the cultural fit and the operating model the CRO puts in place to handle the project. To elucidate the latter, I will focus in on the specific needs of biotech companies in the early exploring development stage.

"During the selection phase, many aspects are considered and weighted by Sponsors. Aspects that are often neglected are the cultural fit and the operating model the CRO puts in place to handle the project."

Whereas the biotech’s value creation lies in the drug development and its marketing, CROs are service providers whose profit depend on the volume and margins gained from running projects. Apart from niche CROs, the majority handle a variety of clients, in several therapeutic indications across the whole development life cycle. Fixed-price projects have become the norm, and operational excellence is a necessity. To put it bluntly: an hour gained, is an hour more margin. Consequently, CROs are very focussed on standardisation, operationalising work streams in an assembly-line way and minimising non-billable activities as much as possible.These insights may explain some potential clashes that arise when a biotech company - with little structure, resources and volatile development plans - meets the ‘army’ of the CRO project team. The gap becomes even bigger if their early phase programme gets managed in a ‘late phase manner’.

"One size does not fit all, especially for biotech companies with early phase programmes."

A ‘late phase manner’? That’s right! Early and late phase studies have very different complexities and require another mindset. Whereas the project team of a phase 3 study, for example, deals with a broad geographical dimension, high-volume data and requires strong project execution skills, the phase 1/2 team is much smaller and handles smaller samples, yet highly complex and scientific protocols with an (fairly) unknown compound or population.Early phase teams will select a handful of highly specialised investigators who are able to deal with the complexity and the potential safety risks. Close collaboration and engagement with the investigators is a necessity.The above observations may indicate a few important aspects:

Late phases seem more susceptible to standardisation whereas early phase require a more tailored and agile approach. Simplifying the CRO team to align to the structure of the biotech team would already support a fruitful collaboration.

Moreover, a remote CRO team may suffer from the many moving pieces of information when dealing with biotech companies. Efforts to integrate the core members of the CRO team – or at least the project manager – would help directing the project.

The required skillset and mindset are slightly different when managing early phase studies. It is important that the (core) CRO team understands the ‘scientific’ language of the biotech.

A CRO with a strong local anchorage and active engagement with investigators will have a leg up. It allows the selection of the best investigators based on knowledge and not just based on Excel sheets tracked from a generic database. Early phases require a high level of granularity in order to select the right site and make good recruitment projections. One underperforming site has a huge impact on the overall project deliverables. Knowing the internal key stakeholders at the site could open doors and save you a lot of time.

Taking all these elements into consideration, I wonder whether the classic operating model of CROs are effective in the early phase setting? Even though global CROs have a separate business unit devoted to early phases, I wonder if the concept of a “hybrid model” would lead to a more effective collaboration? In this model, the CRO’s “hybrid” project manager is fully integrated into the biotech team – perhaps even physically works from the biotech office at the source of the project – and manages their CRO team of highly skilled members. A team which is aligned with the biotech needs and has strong connection with the local sites. Both teams would partner up and join forces to deliver a successful programme.To conclude, one size does not fit all. Especially, biotech companies with early phase programs would benefit from a different approach then the classic operating model. Perhaps the concept of a “hybrid model” of outsourcing with elements of an FSP might be explored.

About the Author

Katrien Reynders-Frederix has a broad experience in both CRO, biotech and pharma companies across the full clinical development life cycle. She is passionate about innovation, the life science ecosystem and supporting biotech companies.

This article was written in a generalising way and focusses on patient recruitment protocols.

1. Baldo, A.(2004) Outsourcing Essentials,2