Market Challenges: High Cost of Drug Development

The high cost of drug development is significantly restraining the growth of the global in vivo CRO market. Developing new drug therapies is an extremely expensive process, with the average cost estimated to be over US$ 2.60 billion according to a 2020 report by the Tufts Center for the Study of Drug Development. This includes everything from conducting basic research and clinical trials to getting regulatory approval. Given these enormous costs involved, pharmaceutical companies are under extreme pressure to maximize their returns on investment for new drugs. Any aspect of the development process that adds to the costs or risks is viewed very unfavorably by big pharmaceutical sponsors. Outsourcing studies to contract research organizations (CROs) is seen as adding an additional layer of expenses and reducing the sponsors' control over their proprietary compounds and data. While CROs offer expertise and scale that pharmaceutical companies lack, their involvement increases overall project budgets and timelines. This makes sponsors wary of relying too heavily on CROs, preferring to handle more of the work in-house instead.

Market Opportunities: Cell and Gene Therapies

Cell and gene therapies could open up a huge opportunity for the global in vivo CRO market in this decade. These novel therapies are revolutionizing treatment approaches by addressing the underlying cause of diseases rather than just alleviating symptoms. This paradigm shift from managing to curing serious diseases has massive future growth potential. Several drug developers are actively conducting clinical trials of cell and gene therapies across therapeutic areas like oncology, neurological disorders, genetic disorders, etc. For example, the FDA approved the first gene therapy treatment for spinal muscular atrophy in 2020 (National Institute of Health). Many others are in late-stage trials. As these novel treatment modalities receive approvals and rollout at commercial scale, the need for specialized testing services by in vivo CROs will exponentially increase in areas such as preclinical research, toxicology studies, biodistribution studies, delivery mechanism evaluation, etc. This represents a major transition underway in drug development, triggered by the promise of one-time curative interventions for conditions considered incurable so far. In vivo CRO companies will have to make large investments to build expertise specific to cell and gene therapies over the next 5 years to cater to this increased customer demand. Stem cell therapy development is another fast-emerging area with potential for regenerative medicines and management of chronic diseases. The World Health Organization (WHO) estimates that over 150 stem cell therapy trials are underway globally for a variety of conditions including COVID-19.