China Healthcare: Expert call takeaways: Pulse check on China’s clinical CROs in Q226

Research evidence excerpt

China Healthcare: Expert call takeaways: Pulse check on China’s clinical CROs in Q226

s, such

as BE studies.

3. What is your outlook for order intake and pricing in H226? Has the industry

entered a recovery phase?

Expert: The recovery trend is relatively clear, and capital investment in new drugs is no

longer as cautious as in the past two years. Also, China now ranks first globally by clinical

trial volume and second only to the US by overall environment (policy, pricing, research

institutions and transparency) among major countries. Prices are only about one-third to

one-half of those in the US, while patient enrolment speed is about five times that of the

US. Faster enrolment and earlier results have also attracted some overseas biopharma

firms to conduct trials or make enquiries in China. Looking ahead to H226, prices could

maintain mild single-digit increases, while order intake growth could be faster.

4. Are there differences or new changes in demand from large pharma

companies, and small, medium-sized and large biotech companies?

Expert: Leading pharma companies have a relatively high proportion of in-house teams

for domestic clinical business (including SMOs), and only outsource a small number of

MRCT projects to multinational CROs. Large and mature biotech companies have also

shifted from outsourcing to in-house teams in recent years, and tend to outsource most

IIT and RWS to domestic CROs. Therefore, domestic CROs mainly undertake orders from

small biotech companies, with demand rising amid trial number increases, although the

cash flow of the latter is not as healthy as for the first two groups. In addition, an early

new trend is that multinational pharma companies began to outsource some China-

based projects to larger, higher-quality domestic CROs.