Contract research organizations are a fairly mysterious bunch. They’re typically considered the skilled laborers behind big drug development — the stage crews who run the trials behind some of the most (and least) successful data reveals in biopharma history.

But all that is changing.

This year, a couple of huge, out-of-the-blue M&A deals sounded the alarm on just how much money is flying around in this corner of the industry.

John Kreger, an analyst at William Blair, estimates that about half of all clinical trial work is outsourced to contract research organizations, also known as CROs. In recent years, the companies have slowly begun to take on a new look, with services now ranging from consulting to manufacturing and commercialization. It’s an industry that’s projected to reach $90 billion by 2026, according to Fortune Business Insights. 

“No one has great data about how big this market is or how much is outsourced. Everyone’s dealing with estimates,” Kreger said.

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It started with a cup of coffee and a slow burning desire to go early and long in the biotech creation business.

Wrapping up a 15-year discovery stint at Genentech back in the summer of 2021, Rami Hannoush was treated to a caffeine-fueled review of the latest work UCSF’s Jim Wells had been doing on protein degradation — one of the hottest fields in drug development.

“Jim and I have known each other for the past 15 years through Genentech collaborations. We met over coffee, and he was telling me about this concept of the company that he was thinking of,” says Hannoush. “And I got immediately intrigued by it because I knew that this could open up a big space in terms of adding a new modality in drug discovery that is desperately needed in pharma.”

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By the time Josep Bassaganya-Riera stepped down as founding CEO of Landos Biopharma in 2021, the company had racked up Phase II data for its top autoimmune program, completed what he called a positive end-of-Phase-II meeting with the FDA and plans to launch pivotal Phase III trials.

Since then, though, the new leaders at Landos have reshuffled their plans for the drug, omilancor, first announcing they will run a Phase IIb ahead of a Phase III and eventually shelving it altogether.

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A few months back, when Takeda caused jaws to drop with its eye-watering $4 billion cash upfront for a mid-stage TYK2 drug from Nimbus, it had already taken a deep dive on the solid Phase IIb data Nimbus had assembled from its dose-ranging study in psoriasis.

Now, it’s rolling that data out, eager to demonstrate what inspired the global biopharma to go long in a neighboring, but new, disease arena for the pipeline. And the most avid students of the numbers will likely be at Bristol Myers Squibb, who will have a multi-year head start on pioneering the TYK2 space with Sotyktu (deucravacitinib) as Takeda makes its lunge for best-in-class status.

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