Inking of the three-year deal, news of which Outsourcing-Pharma broke last month, comes one year after INC expanded its functional service provider (FSP) unit through the acquisition of Kendle. INC is now further strengthening in FSP by hiring staff and creating a business unit dedicated to Astellas.
“The unit has dedicated finance, recruiting and training support, with training customised to Astellas’ systems and SOPs (standard operating procedures)”, Jamie Macdonald, chief operating officer at INC, told Outsourcing-Pharma.
Specific hiring needs, such as numbers and locations, will evolve as the deal progresses, Macdonald said, but INC projects the unit will employ 600 people when the relationship peaks in 2013 or 2014.
The INC unit will manage 80 per cent of Astellas’ portfolio and work in multiple therapeutic areas. As of February, Astellas’ global development programme had 21 compounds in Phase II or III trials for indications such as prostate cancer, diabetes, renal anaemia, and rheumatoid arthritis.
INC will support development of these compounds by providing monitoring, data management, and site start-up services. By offering these services through a FSP model INC claims it can cut costs by 40 per cent and timelines by 10 per cent.
Measuring metrics
Astellas will measure the extent to which INC hits targets through an executive governance structure created to manage the relationship. The governance team will look at metrics to guide decisions and assess performance.
“Success will be measured based on quality, operational delivery, effective collaboration and process and technology innovation”, Macdonald said. Both companies will complete an independent survey to measure perceptions about the effectiveness of their collaboration.
Asked if payments to INC are tied to the metrics or other performance factors, Macdonald declined to comment, saying the company is unable to discuss specific contractual terms it has with clients.
INC has previously expressed an interest in performance-based deals. Speaking at Partnerships in Clinical Trials last month, Neil MacAllister, chief business officer at INC, said: “We need to fix the model. CROs (contract research organisations) need to move to getting paid for results.”
Future opportunities
While Astellas is a sizable account for INC, reports suggest even bigger businesses are interested in inking FSP deals. Writing last month John Kreger, equity analyst at William Blair, named Sanofi, Eli Lilly and Merck & Co as three examples of top 20 biopharma firms with an interest in FSP deals.
“INC continues to see strong demand from our customers for FSPs and other types of strategic alliances and as a larger, top-tier CRO are being considered increasingly for these opportunities”, Macdonald said.