Pharma companies “are feeling buoyant right now” and “it feels like our industry is set up for a long run,” Herring said.
Speaking at the Goldman Sachs 34th Annual Global Healthcare Conference in California on Tuesday, Herring noted that larger pharmaceutical companies are targeting new therapeutic areas – especially in Alzheimer’s and diabetes, which are “much more difficult” – as smaller, more virtual pharma companies look to tackle the orphan space.
As for Covance’s stance in the CRO (contract research organization) industry, and more specifically the clinical space, Herring said the company has “outgrown every other clinical company over the last five years.”
“When a client thinks they have a trial nailed, and we bring two or three good tweaks, then they’ll call us again for a difficult trial,” Herring said, noting the increasing competition among the nearly 750 CROs in the industry.
He gave the example of a client that Covance saved more than $20M for, in addition to finishing about 15 months ahead of schedule for a clinical trial. John Watson, chief commercial officer for Covance, echoed similar praise for the company’s clinical and central labs work last month.
Early Development
Even the early development portions of the company, which were crucial to the company’s success in 2007 and 2008 but have been relatively flat recently, might see some growth, Herring hinted, though the company’s official guidance is flat.
He noted that a leading indicator for early development work is biotech funding, especially as more of the early development work comes from smaller companies rather than big pharma.
“As pharma gets healthier, they’ll have to replenish their pipelines,” he said, noting that venture capital is spreading their risk over more compounds and in a “more logical way than the past.”
“We just want to stay on the ramp we’re on and bring the IT systems and tools to take us to the next level,” Herring concluded, noting that IT systems are becoming a “tailwind” instead of a “headwind.”