Top-10 CRO Parexel is bringing in an experienced hand to take the helm.
Co-founder Josef von Rickenbach — a familiar face in the outsourcing world — is stepping up to concentrate on the chairman’s spot after guiding the company for the past 35 years. And he’s being replaced in the CEO suite by Jamie Macdonald, who not so long ago headed INC Research before its merger with inVentiv and rebranding as Syneos.
CROs have undergone a sea change over the past decade, with private equity stepping in to drive a global consolidation of the industry. Last year proved to be particularly challenging to Boston-based Parexel, which had built up a global organization of some 19,000 staffers. Pamplona Capital ended up buying the company out for $5 billion after a reorganization cost more than a thousand jobs, driven by some painful cancellations the year before.
For von Rickenbach, one big trend he’s been grappling with has been centered around Big Data: “making sure that the efficiencies and the opportunities that are coming down the pike as a result of the availability and use of Big Data — that we get that right.”
Macdonald sees his job now as building on the CRO’s strengths.
“What we have is a tech backbone, a strong basis in Asia, data and analytics,” says the new CEO, who jokingly notes that he is now on day two-and-half at Parexel. Key concerns remain the same: “Are we selecting the right drug and the most appropriate protocol, putting them into the right hands in sites and investigators.”
“There is,” he added, “something to be said for focus.”
So will Parexel and its new owners at Pamplona buy something new to focus on?
“We certainly have the capability to acquire certain assets,” says Macdonald, who sounded most interested in adding capabilities rather than buying market share through M&A. Making a bigger company out of a peer-to-peer alliance did not sound like his sweet spot at all.
Both von Rickenbach and Macdonald noted that as the Big Pharma side of the business grows more and more saturated on the CRO side, there is added potential on the biotech side of the business. Small and mid-sized companies have enjoyed huge increases in financing sources in recent years, while operating with a business model that encourages — if not outright requires — outsourcing clinical trial work.
Another big area of opportunity: Asia, says the chairman, and in particular China.
Parexel is likely to continue to see some of its biggest growth in China, adding researchers as well as clients as the biopharma business booms — driven by less obstructive development regulations as well as plenty of new funding.
It’s a fast-changing world in the CRO industry. And Macdonald will have a big say on how that plays out.
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