Outsourcing

1. Outsourcing CRO perspective Roger Hayes, Ph.D.

2. CurrentOpportunities • R&D spend anticipated to grow in 2013 and beyond • 5% current projection • Numbers of active programs to increase • Manage R&D budgets by reducing infrastructure and internal resources • Increased demand for CROs • Clinical outsourcing will predominate • Late-stage pipeline still the focus • Continued expansion of services • MPI Research expanding from predominantly early-development into Discovery and Phase 1

3. Preferred & Strategic Partnerships • Early development (safety assessment) studies have become a commodity • Low profit margins • Is quality equal across all competing CROs? • How does one differentiate services? • Competitive bid process or partnership approach with preferred pricing? • 33% of early-stage work is performed through strategic partnerships • Partnerships have expiration dates • Maintain relationship to renew contracts • Communication • Budget planning, study/protocol deviations, institutional knowledge transfer

4. Partnerships • How many different ways are there to run an IND-enabling toxicology study? • Extension of sponsor laboratory or well travelled path to submission success • Institutional knowledge transfer is critical • Study design • Formulation issues • Anticipated toxicities • Control of study • A CRO is likely to be more routinely inspected by regulatory authorities • De-risk to avoid Form 483 observations • Undue influence by sponsor • Role of test facility management