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CHAPTER 1 - INTRODUCTION, SCOPE AND METHODOLOGY

The agrochemical industry has a long history of outsourcing some of its product development and support work to contract research organisations (CROs) but in recent years this practice has burgeoned. A major contributory factor to this increase in outsourcing activity has been the rationalisation of in-house research and development (R&D) resources of the major agrochemical companies at a time when regulatory pressures on the industry have been intensifying. In parallel, the traditional role of CROs has been changing. Not only is the scope of work undertaken by CROs widening but relationships between vendor and buyer are becoming closer and more strategic in nature. It is timely, therefore, to take a closer look at some of the leading CROs that are now playing an essential role in the functioning of the agrochemical industry. This report presents a profile of 30 such organisations.

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The title of this report might imply that it is analogous to the Agrow Top 20 report on leading agrochemical companies and will present an objective ranking of the leading CROs on the basis of their agrochemical-derived revenues. However, such a ranking is not possible. Unlike the leading agrochemical companies, many of the CROs under consideration are private companies and therefore do not publish their financial data. Although some of the companies are public companies and report their total turnover, they tend not to publish a detailed breakdown of their revenues by industry sector served. Hence precise figures on agrochemical-derived revenues on which a ranking could be based are not available from published sources.

The lack of such figures made the selection of 30 “leading” agrochemical CROs according to financial criteria impossible and no other objective and quantifiable criteria for selection exist. Although it was not difficult to identify around a dozen companies that clearly had to be included by nature of their size and volume of business, selection of the remaining companies to be profiled was more problematic because there are many smaller CROs of broadly similar dimensions. Eventually, an initial list of 30 companies was compiled by the staff of Agrow World Crop Protection News following consultation with contacts within the industry. This list comprised the largest CROs plus a representative group of the more significant smaller CROs.

Each of the selected companies was approached in writing using the contact details published in the Agrow Autumn Supplement 2002. Information was requested on the following:

• Date of company formation and origins plus contact details
• Business focus and industries served in addition to the agrochemical industry
• Geographical focus of business
• Financial data including current and historical proceeds and the proportion of these accounted for by agrochemical-related activities.
• Staff numbers and the approximate proportion of staff accounted for by the company’s agrochemical-related activities
• Geographical location of offices, field test stations and laboratories
• Scope of agrochemical-related activities, highlighting areas of particular strength and expertise and detailing any specific awards/achievements
• Key relationships/partnerships with agrochemical companies
• Key relationships/partnerships with other CROs
• Details of GLP (Good Laboratory Practice) compliance
• Views that the company had on the current size of the outsourcing market and/or relevant segments of the market and how these may develop in the medium and long term

Profiles of each company were prepared on the basis of the information received, supplemented by data available from other sources such as company annual reports, promotional literature and web sites.

Responses varied considerably in nature. Some of the CROs approached were prepared to provide a comprehensive body of information and were happy to respond to additional questions by telephone or e-mail, whereas others chose to respond in a more limited way. A very small number chose not to respond at all, even after several approaches. In such cases, if sufficient material from published sources was unavailable, the company was omitted and another company substituted. The final list of profiled companies is shown in Table 1.1. It must be emphasised that non-inclusion of a company in this list should not be viewed as a negative judgement on its value or significance.

Understandably, even the most open companies felt unable to accede to all the requests for information. For example, few companies chose to disclose a precise figure for their agrochemical-related revenues. However, some were willing to provide an approximate figure, while others agreed to confirm an order of magnitude. Many companies were not prepared to reveal details of their client base or details of alliances because this would have breached confidentiality agreements. Several companies have a policy of not releasing names of individuals as contacts; conversely some companies are happy to provide a series of named contacts covering particular study areas in addition to the main company contact details. Inevitably, therefore, the profiles vary in their degree of detail and some are more comprehensive than others. Although a broadly similar format has been adopted and no profile is more than six pages long, no attempt has been made to try to impose uniformity or to tailor the length of the profile to the size of the company.

The individual CRO profiles comprise Chapter 4 of this report. This chapter is preceded by two chapters of a more general nature that place the profiles in context. The first deals with the recent developments in the agrochemical industry that have a particular significance to the CROs that serve it. The second presents an overview of the agrochemical contract research industry including views on its current and future market, the types of organisation involved, and the trends and challenges that will influence its future.

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