In the last decade, the clinical development landscape has undergone seismic shifts that are changing biotech’s relationship with CROs. Biotech must outsource a larger percentage of their services, especially as clinical trials become larger and more complex, meaning they need flexible, responsive partnerships with CROs with the right resources and expertise to help them achieve their long-term goals. 

Biotech’s evolving relationship with CROs

In the last decade, the clinical development landscape has undergone seismic shifts that are changing biotech’s relationship with CROs. The biotech sector has boomed, infusing the industry with innovation at a rapid pace. This growth is supported by a host of ecosystem elements including recent advances in biotechnology and genomics that enabled the development of new classes of drugs and a focus on personalised medicine and precision therapies. Similarly, the free-flowing funding of the pre-covid era buoyed this swell of biotech drug development and large pharmaceutical companies have harnessed this shift to populate their pipelines with biotech-developed assets. However, the biotech sector is not just a growing pipeline farm for big pharma – it’s contributing 70% of the global clinical development pipelinei.

Since 2008, biotech phase 3 clinical trials have grown six-fold, from 119 to 772 active trials in March of 2021ii. Biotech are also responsible for two-thirds of all new FDA-approved drugs as of 2021, per BIO Industry Analysis. These increases signal that, not only are biotech still the driving force of innovation, but they are also now more likely to take their assets all the way to market than in previous years, meaning they need flexible, responsive relationships with CROs with the right resources and expertise to help them achieve their long-term goals. The evolution in the biotech market has opened opportunities to leverage a more strategic approach to outsourcing to support asset development.

The biotech’s increasing outsourcing spend

Whether the long-term goal is approval or divestment, biotech’s clinical development process is dependent on the deep wells of funding resources that have receded since the 2021 high-water mark; but there is still plenty of VC capital available to those companies with demonstrable value and a competitive edge. But once funding is secured, biotech need shrewd partners that can help them optimise that cash runway to progress through the development continuum.

Biotech’s lean and agile model means they must outsource a larger percentage of their services than mid-size or large pharma that have more in-house resources. According to recent ISR reports on phase 1 trials, small sponsors with <$100m annual R&D spend outsourced a total of 81% of their total phase 1 study spend with a similar percentage for phases 2-3. Those numbers are predicted to increase to 84% and 93%, respectively, by 2026 while the total annual spend for these trials across all phases is expected to increase significantly in the next few yearsiii.

The increase in spend is correlated to the rising complexity and increased size of studies, and the biggest anticipated jump in spending across all sponsor organisations is attributed to small sponsors in phases 2-3. As such, biotech have an opportunity to seize a competitive advantage and optimise their outsourcing approaches by leveraging the updated partnership models being developed across the industry.

Optimising outsourcing models

As the CRO market continues to grow, reaching more than $50bn in 2023iv compared to $31.2bn in 2017v, the ways that we work are evolving. We are prioritising partnership, customising solutions and redefining outdated terminologies. Outsourcing options now feature a broader spectrum of contracting models including one-off contracts, preferred provider and strategic partnership agreements, strategic staffing and full-service models. The more agile service providers offer tailored blended models to best suit their clients’ needs depending on their size, capacity and development stage.

Generally, small to mid-size pharma and biotech benefit the most from a form of full-service or blended models to access expertise and to simplify the complex coordination of the multiple functions involved in clinical trial delivery. Earlier engagement with consultants or a CRO provides biotech companies with an opportunity to develop strategic, flexible approaches that optimise efficiencies from step one, mitigating risk and improving cost-effectiveness throughout the development process.

Considering outsourcing strategies early will help biotech companies devise a streamlined and efficient approach to avoid accruing a host of consultants with separate scopes. Working under financial constraints, biotech often begin outsourcing with small and specialised providers to deal with their immediate need. The trade-off in the initial cost saving is a lack of continuous perspective. Managing one-off and ad-hoc contracts can be more costly and time consuming while customising a partnership solution with an experienced CRO can offer cross-functional insight and continuity that seamlessly transfers across the development continuum.

The partner/provider distinction

Partnership is an increasingly prevalent part of our outsourcing conversations across all sizes and shapes of sponsor companies. Historically, small and emerging biotech have been more likely to choose regional, specialised service providers. Cost-effectiveness and the relative simplicity of the trial at each phase were factors within the trend, as was the underlying perception that biotech would not be prioritised with large CROs. However, this dynamic is changing as biotech and CROs evaluate the opportunities within their relationship.

As biotech face a competitive funding market, with strong series A funding and a steep drop-off for subsequent series, they are shifting their approach from a focus on minimising cost in the short term to optimising funds and building value in the long term. This distinction carries with it an imperative for partnership over transactional contracts. And as clinical trials continue to become larger and more complex, biotech rely on the greater breadth and depth of capability that large CROs offer to maximise their probability of success.

A recent example of this growing partnership imperative amid small and mid-size biopharma is embodied in our new collaboration with LEO Pharma, a well-respected mid-size medical dermatology company. LEO implemented a rigorous selection process to ultimately contract a strategic partner that can bring scale and agility to support their ambitious growth plan. ICON will leverage our breadth of differentiating capabilities and design fit-for-purpose strategies for LEO to foster innovation, ensure clinical trial delivery and achieve their long-term goals. 


As the drivers of innovation, biotech are hugely valuable to the industry and the patients that will one day benefit from their therapies. Market shifts and ecosystem evolutions have changed the relationships between biotech and pharma as well as biotech and CROs. Amidst these changing tides, biotech can leverage their shifting position to outsource more strategically with models tailored to their needs. However, the success of these strategic models depend on selecting the right CRO partner.

Get in touch with us to see how we can work together to develop your asset. ICON has innovative partnership solutions and a dedicated biotech sector with more than 8,000 biotech specialists that can act as a fully externalised project development team. Our flexible partnership models and seamless integration are tailored to your needs – we work your way. 


Bruno Marks, Vice President & General Partner, ICON Biotech
Andy Ankerson, Vice President, ICON Biotech


iSource: BIO Industry Analysis, May 2021

iiTufts CSDD Impact Report. Volume 23, Number 4. July/August 2021

iiiSource: Industry Standard Research, 2022

ivSource: Industry Standard Research, 2023

vTufts CSDD Impact Report. Volume 24, Number 6. November/December 2022