Covance aims to increase big pharma win rate to drive growth
Since Adam Schechter took over as CEO of LabCorp, Covance’s parent company, last year he has set out several ways in which he thinks the contract research organization (CRO) can grow on his watch. In January, for example, Schechter identified the need for Covance to win more Phase III trials.
Talking to investors recently on LabCorp’s fourth quarter results conference call, Schechter detailed a related area of focus for Covance under his leadership.
Schechter said, “Where I'd like to see us do better is in the big pharma segment. And I believe we will be able to do that for several reasons. One is, one of our key pillars is to win in oncology.”
The focus on oncology reflects Schechter’s view of Covance’s strengths, particularly the perceived benefits of being part of the larger LabCorp group. The combination of Covance and LabCorp enables drug developers to work with one organization on companion diagnostics, assays and clinical trials.
As Schechter sees it, the combined group is better equipped than its competitors to identify patients who are more likely to respond to a drug and, because of the data generated by its diagnostic unit, help to find concentrations of such patients to accelerate study enrollment.
Those abilities are useful in many disease areas. However, given the predominance of cancer drugs in the industry pipeline, Schechter thinks there are merits to focusing on increasing Covance’s win rate in oncology.
Schechter said, “When we win [in oncology], I think we'll be able to show that we can also do well in other areas, such as specialty, neurology and other areas. So to me, winning in oncology is important because it allows us to be successful in other areas over time.”
The conference call also covered the possibility of disruption to some of Covance’s existing business, with an analyst questioning Schechter about the fact that one of the CRO’s “big customers talked about some pipeline reprioritizations at the end of the year.”
Schechter downplayed the impact of the pipeline changes, saying that the company does not “see any significant impact to our business as we go into 2020.” That position is reflected in Covance’s outlook for 2020, which foresees revenue growth of up to 9.5% at the CRO.
