Outsourcing to Biotechs Is the Answer for Many Pharma Companies' Development

Small, mid-sized and large pharmaceutical companies are turning to outsourcing to free up cash for more early-stage marketing endeavors, according to a new study from Cutting Edge Information.

Early-stage development and commercialization resources can be hard to come by, as most pharmaceutical executives can attest to. Cutting Edge Information's study found that companies that focus their limited early-stage resources on commercialization have a distinct advantage once their products reach the market.

"Uniting R&D and Marketing for Integrated Early-Stage Market Preparation" is Cutting Edge Information's latest study. The report reveals that pharmaceutical companies are looking towards the biotech sector to outsource development of new drugs. In doing so, the company can free up resources to market drugs currently in their pipelines.

"It is no secret that the top pharmaceutical products each year are backed by hundreds of millions in marketing dollars," says Elio Evangelista, research team leader at Cutting Edge Information."Pharma-biotech partnerships have become a more popular method for pharmaceutical companies to outsource drug development and fill pipeline gaps."

One profiled company is in favor of shrinking business unit departments and creating small internal teams to handle deals with small biotechs to outsource most of the early-stage pre-clinical work. The idea is based on the biotech industry's capability to develop innovative products morequickly than slow-moving, large pharmaceutical companies. The company invests almost as much in early-stage research as it would for an in-house compound, but it outsources the work to smaller, faster-moving biotechs, which assume some of the risk that the company would otherwise retain.

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