Q1-2019 Pharmaceutical CDMO & CRO Update

The Contract Research and Contract Development & Manufacturing markets continue to demonstrate robust consolidation activity. As has been demonstrated in this most recent credit cycle, private equity firms like Ampersand Capital are pursuing investment in CROs and CDMOs as a means to benefit from a 7-8% industry CAGR, strong FDA drug pipeline, and emerging opportunities in biologics, cell, and gene therapies. ​

Strategic consolidators like Thermo Fisher are utilizing inorganic growth initiatives to capture new specialties, capabilities, and access to top-tier management teams. With a string of billion-dollar acquisitions in the last 18 months, Thermo Fisher has repositioned itself as the most robust end-to-end services provider to the global pharmaceutical continuum. In order to compete with vertically integrated global providers like Thermo Fisher, traditional CDMOs have begun weighing partnership opportunities outside of their historical core competencies in research, consulting, and life sciences to create end-to-end solutions, with the competitive advantage to secure sticky contracts at Phase I and Pre-Clinical stages.​

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Sources: SEC Filings; Company Press Releases, and Reports; IBISWorld; Capital IQ; PHP Estimates and Research. This document has been compiled with publicly available information. Provident Healthcare Partners, LLC makes no guarantee of its accuracy or completeness. No data or statement should be construed to be a recommendation for the purchase, sale, or retention of any security.
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