The ongoing exponential growth of business in clinical trials can be attributed to the increasing number of drugs being developed, new therapeutic modalities, focus on personalized medicine, and emerging biopharma companies. As pharma and biopharma companies increasingly turn to outsourcing of their R&D efforts, the demand for clinical research services is increasing, but with growing pressures to lower costs and enhance productivity.
The Global Clinical Trials Market size was estimated (source) at
$29.7 billion in 2020,
$32.27 billion in 2021,
and is projected to grow at an annual rate of 9.1 % to reach $54.3 billion by 2027
In Europe, the market is expected to grow at an annual rate of 8 % to reach a market size of €25 billion by 2025. (Source: Europe Contract Research Organization (CRO) Market to 2025, The Insight Partners; Arthur D. Little analysis)
Phase I/IIa segment
In Phase I trials, new molecules are tested for the first time in humans, usually in healthy volunteers. The same sometimes applies to small-scale early patient trials (Phase IIa), where proof of target engagement and preliminary information about the effective dose range are sought. For such trials, CRST offers a full-service model.
CRST has two major growth drivers in this segment: the growing number of early-stage biotech/drug development companies in the Nordic countries and recent successful projects for its clients. The company believes these factors and strengthened resources will lead to growth in the Phase I/IIa segment in the Nordic region and globally. CRST has already seen growing interest in its services. As a result, the company expects this segment to grow significantly from 2024 onwards.
Recent public references in this business segment include the Danish company Avilex Pharma ApS (first-in-man trial with a small molecule targeted to stroke), the Finnish company Desentum Oy (first-in-man trial with an immunotherapy agent targeted to birch pollen allergy) and Provention Bio Inc. (a US-based biotech company who conducted their first-in-man trial with a potentially ground-breaking diabetes prevention vaccine in Finland, with CRST).
Phase II-IV segment
In large international Phase II-IV trials, new treatments are tested for efficacy in a targeted patient population. CRST provides two professional clinical trial sites (one in Helsinki and one in Turku), covering more than half of the Finnish population. In addition, the company provides Finnish patients early access to potentially ground-breaking therapies and the possibility of being involved in this crucial drug development path.
Among the disease areas, CRST is best known for its experience in brain disorders (such as Alzheimer’s disease and Parkinson’s disease). Still, the company has lately expanded into other therapy areas, including cardiovascular medicine, metabolic disorders, dermatology, gastroenterology, and vaccines. The recent positive news in Alzheimer’s drug development is expected to generate further growth in the central nervous system (CNS) therapy area, which already constitutes 15-20 % of the global drug development pipeline. This, and further expansion in other therapy areas, will be key growth drivers for CRST.
(Source: CRO Service Market, Global Opportunity Analysis and Industry Forecast, 2019-2026, Allied Market Research; Arthur D. Little analysis)
CRST has had customers from 17 countries. Currently, the most active geographies are the Nordic countries, Switzerland, and the US.
The existing client base spans from virtual biotech companies to Big Pharma; many are working with CRST regularly, coming back with new projects. CRST is also actively collaborating with many medium-sized and big clinical research organizations who are continuously looking for skilled professional research sites for their large, later-phase clinical trials in patients.
After opening of CRST’s second unit in Helsinki, CRST has been able to win bigger projects in both business segments because of being able to offer two separate testing sites. One recent example is a Phase Ib trial with Alzinova AB, a Swedish biotech company, where a new vaccine candidate for Alzheimer’s disease is tested in patients at CRST’s sites in Helsinki and Turku.
Company´s market position
CRST has a strong market position in the Nordics. In its Phase I full-service model, CRST has only one private competitor. In addition, 3 or 4 small academic units are providing partly similar services. CRST has some dozens of competitors in Europe but has clear potential for steady growth.
Many US-based pharma companies are conducting their early-stage clinical trials in Europe because of better cost-efficiency and ease of the regulatory process. This increases the business opportunities of European service providers, even if there are many similar providers in the US.
For Phase II-IV trials, CRST is offering a business model that competes with research sites in other countries. The company sees that its long history, record of accomplishments and added capacity in Helsinki will help it to further expand its business. The company has successfully expanded its trials outside of the central nervous system (CNS) and will continue to expand its therapy area coverage in the future.
The company's biggest challenge in this segment is to get Finland involved in trials. Locally, CRST competes with Finnish hospitals and private clinics, against which it has a competitive advantage in terms of full-time staff for clinical research and patient recruitment, ensuring high-quality data. The company's clients confirmed this in a survey conducted by Arthur D Little.