Contract Research Organizations Are Profiting from the Increased Outsourcing of Drug Research and Development, Says Turner Investment Partners Commentary

2008-07-22 23:46:07 -

www.turnerinvestments.com - For biopharmaceutical companies, bringing new drugs to market is costly, time-consuming, and risky. The companies are seeking help from contract research organizations (CROs), which are applying a high level of technical expertise, productivity, and cost savings to drug development. That's the conclusion of the latest Sector Focus commentary by four health-care sector analysts at Turner Investment Partners.

Turner, an investment firm based in Berwyn, Pennsylvania, publishes Sector Focus commentaries monthly as part of the continuing efforts of its five analyst teams to monitor the market sectors for its growth-stock portfolios.

In the commentary, Contract research helps keep drug pipeline flowing, authors Theresa Hoang, security analyst; Heather Flick McMeekin, security analyst/portfolio manager; Vijay Shankaran, security analyst/portfolio manager; and Frank Sustersic, senior portfolio manager/security analyst, note that the market for contract research may grow at double-digit annual rates in the near term, with the potential to reach $29.4 billion by 2011, up from $16.3 billion in 2006.

The analysts observe that the Food and Drug Administration has shown an intensified focus on safety and a diminished tolerance for side effects in new drugs, approving just 19 new medicines in 2007. But despite increasing obstacles, "pharma companies must innovate to survive, which means that while they are striving to control costs, they also need to keep spending on research and development to create profitable, proprietary new drugs and replenish the pipeline."

The CROs' preclinical and clinical services may figure in 50% of all drug research and development in the future -- up from less than 25% currently. The analysts identify Covance, Icon, Kendle International, Parexel International, and Charles River Laboratories International as CROs with particularly good growth prospects in the near term.

To read this July 2008 Sector Focus in its entirety, see the Turner Investment Partners Web site, www.turnerinvestments.com/SectorFocus. Or call 484-329-2439 for a free copy of the piece.

The views expressed represent the opinions of Turner Investment Partners as of the date indicated and may change. They are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. Opinions about individual securities mentioned may change, and there can be no guarantee that Turner will select and hold any particular security for its client portfolios. Earnings growth may not result in an increase in share price. Past performance is no guarantee of future results.

Turner Investment Partners, founded in 1990 and based in Berwyn, Pennsylvania, is an investment firm that manages more than $26 billion in stocks in separately managed accounts and mutual funds for institutions and individuals, as of June 30, 2008.

As of June 30, 2008, Turner held in client accounts 730,308 shares of Covance, 656,980 shares of Icon, 454,973 shares of Kendle International, 1.8 million shares of Parexel International, and 2.3 million shares of Charles River Laboratories International.

Turner Investment Partners
Kate Patarcity, 484-329-2439
Fax: 484-329-2739
kpatarcity@turnerinvestments.com