Tony Proctor – Ophthalmology Clinical Trials Predictions for 2023
What’s Happening In Ophthalmology Clinical Trials – Predictions For 2023
Preparedness and adaptability are critical to the success of ophthalmology clinical trials. Our four-part “Predictions For 2023” series aims to give you a glimpse of what will likely happen in the coming year, and how you can be better prepared.
Finance and M&A. By Tony Proctor, Chief Financial Officer
Less funding leads to risk-averse approaches
Despite the general economic slowdown and higher interest rates, the overall rate of clinical trial volume is not slowing down. However, investors are becoming more particular and demanding about which innovations they will support. In 2022, we saw that capital became more expensive and, as a result, it also became more difficult to secure funding.
This trend will likely continue well into the first half of 2023 and possibly beyond. This has strategic consequences for sponsors. If an organization must allocate limited funds across multiple trials, it forces executives to prioritize on the most promising therapies. As a result, some of the riskier or more ancillary projects will get shelved for a later date. In short, limited investment funds will be concentrated on the most promising therapies.
There are also practical implications for rare diseases and niche therapeutic areas. In ophthalmology, for example, large pharma companies are already looking to sell off some of their assets. This includes promising therapies that were never advanced in the past because they were competing for resources against oncology candidates. It’s an exciting opportunity for smaller and midsized companies to pick up new therapeutics and try to bring them to market.
Higher expectations of CRO partners
A similar risk-benefit calculation will also impact CROs. For the past few years, capital was essentially free as investors dumped money into new opportunities while biotech balance sheets became heavily leveraged. But as money has become more expensive, investors are throttling their funding and demanding to see returns on their investments.
In this new, risk-averse environment, there may be an increase in outsourcing of activities to CROs, which typically are able to provide service at a lower cost than building an internal operations team. However, this will be balanced by rigorous scrutiny towards CRO partners that wasn’t always applied in the past. They will need to prove that they can help deliver the outcomes that sponsor seek. So, it makes sense that both sponsors and investors will naturally gravitate towards the best-performing CRO partners who can show a solid track record of success.
Consolidation among niche CROs
The current macroeconomic environment means that CROs focused on niche therapeutic areas are primed for consolidation. Smaller CROs will likely merge with one another to offer a greater value proposition for sponsors and investors. This will allow them to compete more effectively against the larger CROs, who tend to prioritize the mega therapeutic areas (i.e. oncology, anti-rheumatics, etc.) Other small CROs may simply not survive. The net result will be fewer but more high-quality small CROs to choose from.
CRO talent shortage
The biopharma industry has struggled with a persistent shortage of qualified employees. CROs specifically were impacted on a greater scale as a large contingent left the workforce during the pandemic and never returned. The result is that CROs are struggling to find qualified talent. And because CRA and project manager roles have historically suffered from lower retention rates, it has exacerbated an already existing retention challenge.
To address the challenge, larger CROs are becoming more proactive and creating their own internal talent development programs. And while this will help the industry in the long-run, sponsors bringing therapies to market today are still expecting CROs to staff their projects with experienced employees. The net-net is that we’ll see continued competition for talent, especially for niche therapeutic areas such as ophthalmology. Fortunately for us here at Lexitas, we are blessed with a highly experienced clinical team with a higher than market retention rate, and we continually hear from our sponsor partners that they consider this to be a great value proposition for them.
And speaking of employment, Lexitas is continuing to grow rapidly and we’re actively hiring. Check out our career page to see if there are open opportunities for you.
Check out Lexitas’ CEO Dr, George Macgrath Goals for 2023 here.