Optimizing Outsourcing in Early Small Molecule Drug Discovery

Optimizing Outsourcing in Early Small Molecule Drug Discovery

A Dotmatics report based on a commissioned study to explore trends and needs in Biotech–CRO collaborations

Contents

Overview

Key Findings and Recommendations

3

Introduction

The Rise of CRO Outsourcing in Early Drug Discovery

5

Study Method

Trends and Needs in Early Drug Discovery Outsourcing

9

Results

Survey Results

11

Discussion

What insights can be gleaned from these survey results?

18

Conclusion

Dotmatics Platform

20

Success Stories

Success Stories

23

Abstract

Outsourcing to contract research organizations (CROs) has been a strategic way for companies to navigate rising costs, waning funding options, and growing layoffs From 2015 to 2021, NME approvals for companies with revenues less than $1 billion grew from 8% to 30%, a percentage nearly equal to the share held by companies whose revenues exceed $10 billion.[1] But challenging this momentum are a number of obstacles, including rising costs, waning funding options, and growing layoffs.

For many companies, outsourcing to contract research organizations (CROs) has been a strategic way to navigate these challenges. While biotech-CRO relationships at the clinical stage are both well established and well scrutinized, there has been limited exploration of how to optimize earlydiscovery engagements.

1

To remedy this, Dotmatics commissioned a survey from C&EN BrandLab about outsourced small-molecule-drug-discovery projects. This document includes results from that survey as well as other sources.

The survey results show that while compound synthesis is the primary earlydiscovery task outsourced, biotechs are increasingly turning to multiple CROs for help in additional areas, such as drug metabolism and pharmacokinetic studies, as well as toxicology and safety assessment and more.

The survey also highlights the need for solutions to help optimize biotech-CRO collaboration, with both bio-company and service-provider respondents citing datamanagement solutions as their top need.

Overview

Overview Strategic outsourcing in early discovery can be optimized by improving project-data exchange. A secure client-provider portal can address many of the challenges biopharmas and CROs face around submitting requests, monitoring projects, and delivering and leveraging results.

2

Overview

Key Findings Biopharmas commonly engage multiple service providers for outsourced projects, which are predominated by small molecule synthesis, drug metabolism and pharmacokinetics studies, and toxicology and safety assessment.

Project-monitoring and data-review tasks monopolize much of the time spent on outsourced projects.

Data-exchange processes are largely rudimentary, but while acknowledged as a top need by biopharma and providers, there was minimal insight into vendors who could help improve data-management processes during early discovery outsourcing.

3

Overview

Recommendations To optimize outsourcing relationships, biopharmas and service providers engaged in early drug discovery projects should:

Streamline commonly outsourced tasks, such as synthesis or DMPK analysis, by submitting requests and returning results in a united system.

Reduce time spent on project monitoring, report creation/review, and communications by tracking all outsourced projects in a secure project portal that keeps diverse stakeholders informed with up-to-date results and reports.

Directly exchange data from outsourced projects via a secure data-exchange portal, which keeps data current, accurate, and ready for secondary use—all without the timesink of reformatting and transferring data manually.

4

The Rise of CRO Outsourcing in Early Drug Discovery After the blockbuster days of the 1990s, biotech stepped up to fill big pharma’s innovation gap and fuel growth for the industry as a whole. But rising R&D costs soon turned up the pressure to run smart and lean.

5

Introduction

By the 2010s, many companies began outsourcing their compound synthesis. They could focus their money and talent on core design competencies in medicinal chemistry, while passing off the legwork to CROs who could create compounds faster and cheaper. It was a win-win. But, in recent years, even with this synthesis-outsourcing model well established, pressures have continued to mount for a variety of factors.

R&D costs are growing R&D spending is nearly ten-times more than it was in the 1980s. It can take as much as 12-18 years and $1-3 billion dollars to bring a new drug to market.[2,3]

Funding options are waning As valuations fell post-COVID, potential partners and investors became increasingly trepidatious; mergers and acquisitions slowed; easy funding and fast-tracked IPOs were replaced with growing demand to differentiate, meet strict development milestones, and offer laterstage assets.[1,4]

Layoffs are lingering The layoffs of 2022 spilled over into 2023.[5] Many companies have reduced headcount, dropped programs, and refocused efforts, which has forced their teams to trudge along with dwindling funding and staff.

6

Introduction

CRO 2.0: Optimizing Outsourcing As the pressure to do more with less grows, biotechs are looking beyond synthesis and questioning what CRO 2.0 might look like.

Could CROs help expand capacity, scale, and pipelines?

What other early-discovery tasks can be outsourced?

Could specialty providers fill talent and technology gaps?

What role will CROs play as the use of AI- and in silicobased virtual screening grows?

What are the hidden costs of CRO outsourcing?

How can the CRO relationship be optimized, not just task-bytask, but as a whole?

7

These are essential questions to ponder given how strongly biotechs are betting on CRO outsourcing. By some estimates, biotechs now outsource anywhere from two-thirds to 100% of their R&D activities.

For big pharma, that figure is around 45 percent.[6]

Outsourcing is so strong that the global contract research market is expected to reach approximately $163.48 billion by 2029, representing a compounded annual growth rate of around 12% [7]. Reliance on CROs is especially strong among companies working in small molecule drug discovery.[8]

Biotechs now outsource anywhere from two-thirds to 100% of their R&D activities.

In particular, the outsourcing of early discovery initiatives, pre-clinical studies, and drug development efforts are growing at a faster pace than all other segments, including clinical trials and laboratory services.[7]

Introduction

Despite growing reliance on CROs in early R&D, exploration of how to optimize the biotech-CRO relationship has largely focused on clinical phase projects, where clients say they are looking for CROs to help integrate point solutions, offer end-toend strategic advice, and provide reliable and credible program management.[9] But the success of early discovery outsourcing can also be threatened by multiple factors, such as inefficient data exchange, quality concerns, communication difficulties, and project management challenges. These factors also warrant exploration.

Dotmatics has stepped in to help do such.

8

Trends and Needs in Early Drug Discovery Outsourcing In an effort to explore trends and needs in early drug discovery outsourcing, Dotmatics commissioned a survey of biotechs and CROs who are collaborating on early small molecule drug discovery projects.

9

Overview

Survey Summary An online survey was made available via email invitation to Chemical & Engineering News readers who selfidentified as working in small molecule drug discovery. It was launched in January 2023 and was available for nearly six weeks. Two-hundred-seventy-eight individuals submitted responses. Key demographics of respondents are summarized in the references.

The survey engaged both biotech/biopharma/pharma companies (“bio companies”) who outsource to service providers, as well as service providers themselves. It asked numerous questions regarding categories of companies engaged, types of projects undertaken, technology solutions employed, data formats and processes used, solution and technology gaps, etcetera.

10

Survey Results Responses from bio companies and service providers were largely aligned; for simplicity’s sake, the key results presented herein are those of bio-company respondents, unless otherwise noted.

11

Results

Type and Number of Providers Engaged Survey results indicated that bio companies

Variety of types of organizations bio

engage with a variety of service providers.

companies are engaging with

Contract research organizations were the most common type of provider engaged,

84% Contract Service Providers

40% University/Academic

with 84% of respondents saying they outsource to CROs. This was followed by

18%

9%

universities, which were engaged by 40% of

Independent Labs

Government

9%

8%

Government

Hospital/Medical

respondents.

Most companies engage multiple providers at once, as opposed to just one, as shown in Figure 1. Likewise, most providers serve

6%

multiple clients.

Non-profit Research

Figure 1

Type and Number of Providers Engaged

1 Other 1%

6%

2-3 36%

>5 23%

4-5 23%

12

Results

Types of Projects Outsourced Synthesis remains the most common type of early discovery project delegated to service providers, with 84% of respondents saying they outsourced synthesis. Service-provider respondents also cited small molecule synthesis as the primary service they provide to clients.

However, as shown in Figure 2, it is becoming more common to outsource other types of early discovery work, including drug metabolism and pharmacokinetics studies, as well as toxicology and safety assessment. Also of note is the relatively low amount of high throughput screening being outsourced. Only 36% of respondents said they outsource high throughput screening; similarly only 27% of providers said they typically provide this service.

Figure 2

Type and Number of Providers Engaged

84%

Small molecule synthesis

Drug metabolism and pharmacokinetics

58%

Toxicology safety

50%

Process optimization

41%

Formulation

High throughput screening

Compound QC

4 13

40%

36%

29%

Results

Time spent on Outsourcing Tasks Respondents identified a number of hidden challenges that might threaten project timelines and budget allotments.

Figure 3 illustrates the percentage of time bio-company respondents spent on various tasks when working with service providers.

As shown in the figure, a significant amount of time is spent monitoring project progress, as well as reviewing reports and data that providers have prepared.

On the provider side, reviewing experimental data, monitoring projects, and conducting frequent client meetings were the top most time-consuming tasks.

Figure 3

Percentage of Bio-Companies' Time Spent on Various Tasks When Outsourcing

Monitoring progress of projects

Reviewing reports from providers

Reviewing data from providers

8%

13%

12%

29%

26%

24%

11%

12%

16%

11%

26%

23%

13%

11%

16%

Conducting regular

Defining scope of project

14

20%

11%

meetings with providers

<5%

18%

5% - 9%

18%

34%

21%

10% - 14%

31%

15% - 19%

17%

12%

24%

20% - 24%

7%

17%

12%

5%

25%+

Results

Factors Contributing to Data Management Struggles For both clients and providers, a multitude of factors complicate lab data management.

Diverse Stakeholders

Data are used by many different stakeholders across R&D, development, chemistry/manufacturing/controls (CMC), IT, production/manufacturing, QA/ QC, clinical/bioanalysis, process analysts, corporate management, environmental/health/safety, and procurement.

Varied Technology

While a large portion of respondents used electronic laboratory notebooks, around a quarter also relied on a scientific data management system (SDMS) or a lab information management system (LIMS).

Key Regulations

While Good Manufacturing Practice (GMP) and Good Laboratory Practice (GLP) topped the list of regulatory concerns, many respondents also cited clinical and ISO regulations as a priority.

Data Strategy

Both bio-company respondents and providers said their current lab-data management strategy primarily focused on capturing and driving results, as well as on process optimization. FAIR data principles were also a concern.

15

Results

Top Need Identified:

Up to 80% of R&D data are stuck in different systems

Data-Management

and in different formats.

Solutions

Faced with these varied challenges, it is

Taking a closer look at current data-

no surprise that both bio-company

sharing practices in early-discovery

respondents and service providers

outsourcing illuminates why data-

identified data-management solutions as

management solutions are so needed

the number one type of solution that

and why so much time is spent

would be “most helpful in managing

monitoring projects and having

external drug discovery projects.”

progress-report meetings. As illustrated

In fact,

for both groups, the need for data-

in Figure 4, the file formats typically

management solutions far outweighed all

used in outsourcing projects are

other needs identified.

rudimentary and often necessitate data transcription steps that are timeconsuming, error-prone, and unsecure.

Data management solutions were by far the top solution that both biotechs and CROs cited as “most helpful for

File Formats Typically Used to Transfer Data in Early Drug Discovery Outsourcing Projects

managing outsourced drug discovery projects.”

73%

72%

Powerpoint

Excel

known bottleneck in R&D. By some

68%

59%

estimates, up to 80% of R&D data are

PDF

Word

21%

19%

Access/other

In-house

databases

designed

Data preparation and cleaning is a well

stuck in different systems and in different formats. As a result, as much as 60% to 80% of a data scientist’s time is thought to be spent cleaning and preparing data for use. Data being exchanged with external service providers complicates matters even more.

7% Other

16

Results

Figure 4

Unnecessary Data Transcription Steps Prevalent in Early Drug Discovery Outsourcing Projects CRO

2

PDF

CSV

Transcribed into CRO system

1

3 Into prepared to send to client

XLS

XLS

Data prepared to send to CRO

4 Client transcribes data into their system

Biotech

There is an overwhelming use of office-

broader insights. They are not easy to find

efficiency programs to present project data;

or use again in the future.

the current status quo is for service providers to pull data out of their systems

Interestingly, despite acknowledging the

and prepare progress reports to present to

strong need for data-management

clients. This process is time-consuming and

solutions, neither bio companies nor service

requires constant touchpoints to keep

providers were well versed with the options

everyone up-to-date. And while the

available on the market to help deliver

prepared project-update reports may be

positive change.

easy to view, they are not easy to use. Such reports are stagnant and leave the underlying data inaccessible for secondary use. The data cannot be easily uploaded

As much as 60% to 80% of a data scientist’s time is

into a client’s databases. They cannot be

thought to be spent cleaning

easily passed into specialty software for

and preparing data for use.

secondary analyses or use in machinelearning or AI tools. They can’t easily be collated with other datasets to attain

17

Discussion

What insights can be gleaned from these survey results?

Biotechs/biopharmas/pharmas are often engaging numerous diverse providers, which risks inconsistencies and inefficiencies when there are no standardized workflows or integrated CRO portals in place to securely and consistently capture and review project data.

Synthesis still represents the largest portion of outsourcing, which makes the tasks of target submission, compound upload, and secure registration highly important.

Growing reliance on service providers for work beyond synthesis will demand an end-to-end CRO-management solution that can capture all details and results from diverse types of outsourced projects and analyses. This will require an R&D platform that has the openness to acquire data from all the different types of speciality technology and instruments that internal and external researchers need; such a platform must prioritize data interoperability and seamless data exchange on the backend so biotechs can create a master data source that provides high-level insights across all their diverse projects.

Relatively low outsourcing of lab-based high throughput screening may signal a shift toward AI-based approaches, which will present new challenges for uploading virtual screening results into a united R&D data platform that serves as a single source of truth bridging in silico and lab-based exploration.

18

Discussion

Timelines and budgets can be threatened by the data- and projectmanagement processes common in many outsourced projects.

Reliance on office-management tools to summarize and present results not only demands frequent touchpoints, but it also leaves the underlying R&D data stagnant and unavailable for secondary use. A client-CRO project portal, with real-time reports and repurposable data, could drastically reduce time spent preparing and reviewing reports, holding status-update meetings, and manually transferring or searching for data.

Data-exchange bottlenecks abound. Data capture, transcription, formatting, interoperability, secure transfer, collation, and reporting are all at risk within the current status quo processes; however biotechs and CROs alike are not well versed in the solution offerings available on the market and are instead getting by with workarounds and stopgap processes.

Dotmatics

can help.

19

Conclusion As the market’s first true end-to-end scientific R&D platform, Dotmatics has the power and flexibility needed to support a wide range of CRO collaboration needs within early small molecule drug discovery. From compound design and synthesis to screening, analysis, and registration, Dotmatics can help.

20

Conclusion

Complete CRO Collaboration Hub Optimize collaboration and secure data sharing between internal colleagues and multiple CRO partners by adopting a complete web-based informatics and decision-support system.

Have one central hub to manage everything: compound design, synthesis requests, reagent and inventory supplies, experiment design and tracking, assay and analytical lab requests, purification and optimization studies, entity registration, documentation and results upload, and progress report creation.

CRO

With a unified portal, up-to-date data are safely accessible from one place, keeping all stakeholders on the same page at all times, establishing a united source of truth, and creating the framework needed to support project expansions, whether from adding additional collaborators or adopting new technologies, such as AI-based virtual screening.

CRO

CRO Biotech

CRO

21

CRO

Conclusion

Specific CRO Task Optimization Even at the individual task level, manual data exchange and process inefficiencies can have a major impact—risking error, wasting resources, and stealing researchers’ time away from high-value scientific work. Dotmatics can help optimize tasks common within CRO collaborations, such as:

Target Submission, Compound Synthesis, and Registration Manage target submission and synthesis requests and then facilitate secure compound upload, whether it be by individual compound or by batch, and with or without registration privileges for CROs.

Assay or Analysis Requests and Results Upload Manage communication, requests, and back-and-forth data exchange with CROs engaged in tasks such as lead optimization, ADEMT analysis, formulation studies, compound QC, high-throughput screening, etcetera.

Reporting and Decision Support Create cross-project dashboards and reports to collate data from multiple CROs and attain high-level insights that aid in decision making.

22

Success Stories Whether you’re a biotech engaging multiple CROs, or a CRO serving diverse clients, Dotmatics can help. Here are a few success stories.

23

Results

Secure CRO Compound Submission at Cereval

See how they did it

Cerevel is a clinical-stage biopharma-

This was possible thanks to Dotmatics’

ceutical company unraveling the mysteries

ability to support one-way batch data

of the brain to treat neuroscience diseases.

upload, view-only data access, project

With Dotmatics, Cereval created a secure

and compound aliases, and restricted

process for letting CROs directly submit

internal-only access to advanced platform

small molecules and proteins to a

tools, such as sketching and

registration-approval queue within their

stoichiometric calculations, compound

R&D platform, all without risk of duplication

and assay registration, sign-off rights, and

or security breaches.

report creation.

24

Results

Active-PharmaceuticalIngredient Stock-andShipment System at Debiopharm

See how they did it

Debiopharm is a multisite, 400+ person

With Dotmatics, Debiopharm was able to

drug development company focused on

move beyond Excel-based network files

novel treatments for oncology and bacterial

and into a secure web-based R&D

infections. The company has numerous

collaboration platform.

global CROs who they engage for both compound synthesis and analysis. With so many internal and CRO team members contributing to R&D efforts, Debiopharm needed a better system to keep everything in order, from the stock researchers need to conduct their work to the results coming from various types of analyses.

25

Results

Creating the ‘Lab of the Future’ at Global CRO Leader Charles River Laboratories

See how they did it

As a leading global CRO with over 100

Dotmatics solutions have been a key part of

facilities in more than 20 countries, Charles

the initiative. Various business units at CRL

River Laboratories (CRL) supports countless

have adopted Dotmatics ELN, as well tools

biotech and pharma companies in their drug

for database searching, compound

discovery and development efforts. To best

registration, and workflow creation; plans

serve their customers and maintain high

are also in the works to rollout additional

quality standards in face of continued

Dotmatics solutions to new departments

growth via acquisition, CRL has made a

and countless more scientists.

concerted effort to streamline processes and integrate R&D applications as part of a company-wide “Lab of the Future” initiative.

26

Optimize Outsourcing in Early Drug Discovery with Dotmatics Request a demonstration today to explore how Dotmatics can optimize CRO collaboration and help small molecule drug discovery teams find better candidates, faster.

Request a demo

Assay Screening

Analytical Chemist

Analysis/QC

Characterize

Screening Scientist

In Vitro

In Vivo

Test

Request

Collate Data

Registration

Library Synthesis

Compound Synthesis

CRO Chemist 27

Hit Selection

De

ke Ma

Purification

cid e

Analysis/SAR

Medicinal Chemist

Idea Generation

Compound Design

Cheminformatics

References

Demographics of Respondents (278) Bio-Co. Respondents (116) Location

Sector Pharma 31%

Central or

South America

Government 1% Independent lab 2% Hospital/clinical 2%

2%

Asia

Contract service

providers

10%

2%

North America

6%

Industry/

manufacturing

74%

Europe

Consulting

7%

Biopharma

14%

26%

Biotechnology

23%

Group

Job Function Production/ manufacturing 1%

Corporate management

Researchers/scientists ther

Research/Discovery 71%

O

Product/marketing manager

3%

echnician/ technical specialist

T

Chemistry/ manufacturing/ controls (CMC)

30%

2%

2%

3%

12%

Executives

Supervisors

18%

24%

Development 13%

Department managers 21%

Experience <5

years 2%

10+ 5

to 9 years 16%

28

75%

years

References

Demographics of Respondents (278) Service Providers (162) Location

Sector Universities Central or

South America

39%

Other 4%

Consulting firms

4%

6%

Industry/manufacturing 6%

Asia

North America

15%

57%

Other 13%

Biopharma companies

Contract service

providers

Europe 20%

22%

14%

Group

Job Function QA/QC

Researchers/scientists

4%

CMC 7%

37%

Research/Discovery 63%

Other 10%

Other 10%

Executives 12%

Development 16%

Supervisors

21%

Department managers 20%

Experience <5 years 9%

5 to 9 years 14%

29

10+ years

77%

References

±² Schur, E., Singhania, A., Infante, K. 5 ways for emerging biotechs to launch smarter. EY. April 8. 2022 o² Research and Development in the Pharmaceutical Industry. Congressional Budget Office. April 2021.¤ D² It will take years for AI use to peak in drug discovery and development process. GlobalData Healthcare. June 13, 2022 A² Cancherini, L, Lydon, J., da Silva, J.S., Zemp, A. What’s ahead for biotech: Another wave or low tide? McKinsey & Company. April 30, 2021 ¾² Armstrong, A., Masson, G., Bayer, M. Fierce Biotech Layoff Tracker 2023: Athenex lets go of 123 employees amid bankruptcy; Novavax lays off hundreds. Fierce Biotech. May 23, 2023 n² Locwin, B. R&D Outsourcing Trends: Not A Zero-Sum Game. Contract Pharma. October 6, 2021. ·² Market Analysis Report: Contract Research Organization (CRO) Services Market Size, Share. Fortune Business Insights. March 2022. ² Pharma R&D Outsourcing Market –Global Outlook & Forecast 2022-2027.

ReportLinker. September 2022. ² Blyes, J., Fleming, E., Mirman, H., and The, L. CROs and biotech companies: Fine-tuning the partnership. McKinsey & Company. June 9, 2022.