1. What roles do contract research organizations (CROs) and contract manufacturing organizations (CMOs) play in the drug discovery/development value chain today, and how will their role change in the future?

The role of pharmaceutical service and technology partners is rapidly changing. Several factors are driving the change:

• An increasingly higher proportion of drug discovery and development is happening in smaller firms.
• Large pharma companies are increasingly slimming down to focus on specific areas and core expertise.
• Molecules in the pipeline are increasingly more challenging in their pharmacokinetics (e.g., bioavailability) and in delivery profile needs.
• Technology, development and manufacturing partners like Catalent provide advanced delivery technologies and often bring unique understanding and patient design factors associated with these molecules' routes of delivery. Specialized dose forms can help pharma enhance patient experience and clinical outcomes.
• Manufacturing requirements are becoming more and more challenging as well - due to more challenging molecules but also due to increasing regulations and globalization needs.

These factors drive the need for deeper partnerships between innovators and companies offering specialized technologies, drug development and supply expertise. Catalent, for example, has made significant investments in new technologies, capabilities and R&D expertise to help innovators meet these challenges, and is increasingly engaging in broader and deeper partnerships with both large pharma companies as well as smaller innovators.

These partnerships start early, sometimes in preclinical development, and as a partner in the development process, Catalent can help optimize the API and formulations of new drugs, span multiple dose forms and formulations for comparative studies, encompass deeper engagement, including analytical and clinical trial supply support, through late stage clinical and scale-up, and extend through global commercial manufacturing for the life of a molecule.

3. Which new business models, like project-based or value-based outsourcing, could turn out to be the most promising guarantors for a successful cooperation with the pharmaceutical industry?

These partnerships may require new business model approaches versus traditional fee-for-service arrangements. At Catalent, we don't compete with our customers and don't currently market products. That has allowed us to maintain flexibility.

These arrangements have included a variety of elements, including collaborative development, success-based financial arrangements such as royalties or profit sharing, hybrid "development-sharing" models, faster collaborative approaches combining joint development contributions with licensing fees and even joint investment in new capability creation.

We have also collaborated with customers to externalize in-house developed technology to more broadly develop better treatments across the industry. Examples include our OptiForm API optimization technology originally developed by GlaxoSmithKline and OSDrC OptiDose advanced tableting technology for combination and controlled-released therapies developed by Sanwa in Japan.

4. The establishment of shared risk/shared reward partnerships has increased significantly. Can these partnerships accelerate drug discovery and fill up the innovation pipelines?

We believe all these approaches can help solve the major industry challenge right now: turning more compounds into successful treatments. By bringing together the best expertise in development, formulation and analytical sciences with the best of innovative applied drug-delivery technologies, we give more molecules a shot at successfully meeting clinical end points. By doing this together earlier in the process, we use development time and funds a lot more efficiently. By engaging in more flexible financial and business models, we give more products a chance of being advanced throughout the process. When you couple all that with the promise that these changes and innovations will result in better quality treatments for the patient, it's a win all around!