Clinical Trial Technology

Biopharma companies are actively seeking workflow efficiencies and cost savings to improve their clinical trial management processes. And as the incidence rates of the most prevalent and complex diseases continue to rise, with R&D spending to follow, biopharma will increasingly rely on outsourcing and digital-first approaches to drug development to meet global needs.

LLR has extensive experience investing in clinical trial technology and services providers, and continues to focus on the sector. Companies and intermediaries should contact Will Sadock to discuss related investment opportunities.

Biopharma was forced to participate in an industry-wide experiment in remote services delivery for much of 2020. It has accelerated adoption and shown the industry that virtual and decentralized trials are not only feasible but have the potential to significantly improve efficiencies and deliver new and valuable capabilities. The foundation has been laid: now technology and service providers need to hone their value proposition and demonstrate that they are ready to help both biopharma companies and CROs focus on success as they take the next step in this digital journey.

Rick Riegel, Senior Operating Advisor, LLR Partners

Tailwinds Prevail Post-COVID to Further Accelerate Digitization

The clinical trial technology market benefits from five significant tailwinds:

Rising pharma sales: Global pharma sales hit $871 billion in 2019 and are forecasted to grow at a CAGR of 7.7% from 2020-2026, reaching $1.4 trillion by 2026. Upcoming drug launches in oncology, CNS, and other high-demand therapeutic areas, along with increased demand for expensive orphan drugs are expected to further accelerate this growth.4

Increased utilization of drug therapies: Per enrollee use of prescription drugs has also increased from an average of 48 prescriptions per year in 2009 to 54 in 2018 in Medicare Part D, and from 7 prescriptions per year to 11 in Medicaid over the same period.2

Recovery from R&D funding lows: After eight quarters of consecutive funding declines, representing the longest funding downturn since 2007, biopharma funding increased in 2Q’23A and is expected to resume mid-single digit annual growth.3

Reliance on outsourcing: Pharma outsources nearly 60% of its clinical development spend and is increasingly reliant on vendors to be more cost-effective and deliver highly specialized technical expertise.5 Demand is particularly high among smaller pharma, which lacks the resources and capabilities to manage non-core functions like compliance or trial management and represents an increasingly large share of the overall drug pipeline.

Accelerated digitization: The FDA set multiple policies to facilitate digitization of the drug development process during COVID, including decentralization and remote monitoring. While temporary, these policies opened the door to longer-term regulatory support for digitized drug development.

The value proposition for clinical trial technology

of trials fail to retain enough patients
up to $8M/day
cost of clinical trial delays
of CROs/sponsors still use spreadsheets to manage study start-up

See You There?

October 8, 2023
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February 11, 2023
SCOPE Summit for Clinical Ops Executives
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June 16, 2024
DIA Global Annual Meeting
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  1. “Evaluate Pharma World Preview 2020, Outlook to 2026,” Evaluate, 2020, https://www.evaluate.com/thought-leadership/pharma/evaluatepharma-world-preview-2020-outlook-2026
  2. “Prescription Drugs: Spending, Use, and Prices,” Congressional Budget Office, 2022, https://www.cbo.gov/publication/57772
  3. “Sector Insights: Impact on the Pharma Services & Outsourcing Sector in the Face of the “Perfect Storm,” Raymond James, 2023.
  4. “World Preview 2021 Outlook to 2026,” Evaluate Pharma, 2021, https://info.evaluate.com/rs/607-YGS-364/images/WorldPreviewReport_Final_2021.pdf
  5. “Redefining sourcing model terminology,” Icon, 2022, https://www.iconplc.com/insights/blog/2023/01/06/redefining-sourcing-model-terminology

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.