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REPORT S . F A Z Z O L A R I N . W A L K E R If you want to learn more about the report or about how to participate, please contact Nigel Walker, managing director, or Salvatore Fazzolari, director of client services, at Nice Insight by sending an email to niceinsight.survey@thatsnice.com . Survey Methodology: The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to outsourc- ing-facing pharmaceutical and biotechnology executives on an annual basis. The 2013-2014 report includes responses from 2,337 participants. The survey is comprised of 240+ questions and randomly presents ~35 ques- tions to each respondent in order to collect baseline information with respect to customer awareness and cus- tomer perceptions of the top 100+ CMOs and top 50+ CROs servicing the drug development cycle. Five levels of awareness from "I've never heard of them" to "I've worked with them" factor into the overall customer aware- ness score. The customer perception score is based on six drivers in outsourcing: Quality, Innovation, Regula- tory Track Record, Affordability, Productivity, and Reliability. In addition to measuring customer awareness and perception information on specifi c companies, the survey collects data on general outsourcing practices and preferences as well as barriers to strategic partnerships among buyers of outsourced services. EXCLUSIVE LIFE SCIENCE FEATURE 42 LIFESCIENCELEADER.COM JULY 2014 CMO SUPPLEMENT chain risk carried greater importance among emerging pharma companies than among emerging biotechs (5th posi- tion vs. 10th). Conversely, emerging bio- tech companies ranked general process improvement much higher than emerg- ing pharma (6th position vs. 10th). When it comes to selecting a CMO, the number one factor for both emerg- ing pharma companies and emerging biotechs is experience. Experience is one of two common rankings between these two buyer groups, the other being "risk sharing opportunities" in fifth posi- tion. Emerging pharma placed the CMO's financial stability over quality and time- liness (3rd and 4th, respectively), where- as emerging biotechs ranked financial stability after those merits, identifying quality/regulatory positioning as their second priority, followed by timeliness. Neither emerging pharmas nor emerg- ing biotechs placed much importance on the size and structure of the CMO or its geographical location. As a contract manufacturer, you should apply this knowledge to pitch the right company strengths to the relevant audience in key sales communications, which will more strategically position your business. Emerging companies that understand how other buyers iden- tify and prioritize CMO qualities before engaging a provider can eliminate some of the trial and error elements of vendor selection and serve as an advantage with respect to strategic decision making in outsourcing. L FOLLOWING THE LEAD FROM BIG PHARMA OR BIOTECH MAY NOT IDENTIFY THE RIGHT SUPPLIER FOR EMERGING/NICHE OR START-UP COMPANIES By K. Hammeke Attributes that Factor into CMO Selection Experience (Operational/Methodological/Therapeutic) Financial stability of the organization Quality/Regulatory positioning Timeliness Risk sharing opportunities Size and structure of the organization Geographical locations 1 2 3 4 5 6 7 1 4 2 3 5 7 6 EMERGING PHARMA EMERGING BIOTECH ATTRIBUTES Prioritized Strategic Partner Attributes by Buyer Category Operating procedures that are established collaboratively Flexibility in terms of commitment Dedicated project manager Long-term commitment Customized protocols or outlines Preferred scheduling arrangement Discounted pricing arrangement Flexible payment terms ATTRIBUTES 2 5 1 3 4 7 6 8 1 2 3 4 5 6 7 8 EMERGING PHARMA EMERGING BIOTECH Motivations for Engaging a CMO Improve time-to-market Improve quality Reduce fixed costs Gain competitive advantage Reduce capital investment/financial outlay General process improvement Improve regulatory positioning Gain operational expertise Use internal staff more efficiently Mitigate supply chain risk ATTRIBUTES 1 2 3 4 5 6 7 8 9 EMERGING PHARMA EMERGING BIOTECH 3 1 2 6 8 9 4 7 5 0 7 1 4 _ R e s e a r c h _ R e p o r t s _ O I _ S p o n s o r . i n d d 6 0714_Research_Reports_OI_Sponsor.indd 6 6 / 2 0 / 2 0 1 4 1 : 2 2 : 2 1 P M 6/20/2014 1:22:21 PM