Many organizations are turning to research process outsourcing (RPO) to respond to increasing cost structures, drive top-line revenues and look for rapid and effective ways to get access to cutting-edge technology without huge capital outlays.
Companies realise that by sharing their research processes, they can utilise their synergies and work together to deliver products at a faster rate. The explosion of new discovery technologies also necessitates the formation of partnerships. Technology leads the way for co-developments.
RPO is increasingly being adopted as a strategic solution by leading pharmaceutical and biotech companies. They are placing ground breaking contracts in functional areas ranging from genomics and bioinformatics to proteomics and metabolomics.
RPO can have a positive impact on a company's profitability and share price. Several studies conclude that such a model has significant impacts on the company's share price followed directly or indirectly from reduced costs, a better focus on the wealth creation processes in the business and greater long-term profitability. The worldwide growth in co-developments and outsourcing of research processes will, before long, make RPO the norm rather than the exception.
The definition of research process outsourcing hasn't changed since its inception but its potential reach and impact have altered significantly. Its universe is expanding. Executives use RPO to meet a diverse set of objectives, from tactical to strategic. Some still contract out narrow processes to achieve cost savings. But others have begun to fully use RPO for very different goals. They are using it to drive consistent research projects through global operations, to start up new operations quickly, to tap new sources of revenue, and to catalyze organizational change.
New eco-systems, new partnerships
It is increasingly recognised that under today's competitive pressures, every function of a business has to be carried out by those who can do it best.
Proteomics is constantly being touted by biologists, entrepreneurs, information technologists, pharmaceutical companies, and the business world in general as the next big thing in the post-genomics world.
Thanks to the Human Genome Project, a slew of technologies have been developed to facilitate the gene sequencing process. The genomics upheaval due to the Human Genome Project has generated remarkable opportunities for the pharmaceutical, biotechnology and health services industries. To operate profitably in the highly competitive pharmaceutical market, both pharma and biotech companies need to keep themselves updated with emerging technologies as well as be in a position to integrate them and discover newer certified/validated targets for commercial exploitation. This in turn is likely to hasten the evolution of areas such as functional genomics.
The current bioinformatics market is marked by collaborations among major pharmaceutical companies and drug-discovery companies. Drug and Market Development Inc. predicts that big pharma will continue to outsource drug discovery to smaller companies instead of acquiring them, since partnerships are more flexible as technology continually changes.
The future of bioinformatics is in drug discovery. Thus far, genomics has not yet produced more effective drugs on the market, thus bioinformatics will take off once the first drugs discovered through genomics is approved and on the market. The next generation of bioinformatic products will shift from sequence analysis to model a protein's structure and function, design drug targets, and further accelerate R&D.
One of the difficulties in the collaboration-making decision in the proteomics sector is that the industry is fragmented between various tools and technologies, software, and devices. Therefore, a company's decision to form a broad proteomics-based alliance requires extreme prudence. While it is certainly advantageous for a company to partner with a structure like RPO without having to invest in building a large proteomics infrastructure, the needs for partnership are predicated on the availability of a specific proteomic technology that is patent protected and in congruence with the company's business niche and objectives. It is important to realize that pharmaceutical companies, which thrive on working with validated targets rather than target discovery, in particular, are less willing to underwrite the cost of the creation of a technology and would prefer to apply technology that has already been developed to generate products.
Therefore, companies emphasise a criteria for a desirable technology-dependent collaboration which are:
.The technology needs to be reliable and reproducible and should have a multipurpose application potential
.In order to minimize cost, but not compromise efficiency, a technology that is adaptable to the company's existing infrastructure is preferred
.A technology that is easily adaptable and requires minimal training for its existing work force is more lucrative
.A low-capital-intensive, less costly manufacturing, distribution-friendly technology is always desirable
.The technology must allow us to maintain any competitive niche in the marketplace
.These criteria, although applicable for evaluating any cutting-edge technology, are especially important under RPO For drug development outsourcing, for example, a research communities (RC) can be created to address a specific grouping of areas, such as clinical genomics. Biotech and pharma companies have already developed RCs allowing partners to exchange knowledge, collaborate and communicate, analyze and compare information.
(The author is vice-president, Research and Operations, Avestha Gengraine Technologies Pvt. Ltd. (Avesthagen), Bangalore)