Kendle International Inc
Candace Kendle, the chairman and CEO of Kendle International Inc and her husband Christopher C. Bergen, the president and CFO privately hold Kendle, a Contract Research Organisation which was incorporated in Cincinnati, Ohio in 1981. The Company provides integrated clinical research and drug developmental services on a contract basis to the pharmaceutical and biopharmaceutical industries. The Company's services comprise Phase II, III and IV of clinical trials. The CRO industry is a full service industry which provides integrated product development services to the pharmaceutical and biotechnology industries. CROs thus derive most of their revenue from the R&D spending of pharmaceutical and biotechnology companies which is growing at a rate of 10% a year. These services are provided in accordance with government regulations. In 1995, worldwide spending on R&D by pharmaceutical and biotechnology companies was estimated at $35 billion, of which $22 billion was spent on drug development activities and $4.6 billion was outsourced to CROs. CRO’s strive to boost revenues through faster drug development while also dealing with cost control pressures. The CRO industry is highly fragmented, with several CROs ranging from small, limited-service providers to full-service corporations. The number of new smaller entrants is increasing, however to develop capabilities of a full service CRO, significant cost and experience are necessary in order to: develop expertise in the various therapeutic areas, to develop the ability to manage complex clinical trials, to prepare regulatory submissions and also for developing integrated clinical data management capabilities. These factors have led to an increased rate of industry consolidation. Key Success Factors in the CRO Industry: Therapeutic expertise, broad range of service offering across multiple phases, Integrated Clinical Data Management (for efficiency in collection, editing, analysing date from thousands of patients with various clinical conditions from geographically dispersed sites), proximity to clients, and international, and multi jurisdictional presence to speed up drug approval. Kendle Strengths: Competitive, diligent and tenacious management that hires the best and most experienced professionals to enable the company to compete more effectively.5 By 1997, the company has grown successfully to $13 million in sales and has attracted significant businesses from major biotechnology companies. Continuous, substantial and profitable business from their largest client Searle since the late 80’s. Expertise in Multiple therapeutic areas, ‘TrialWare’ an integrated clinical data management system for global data collection and processing which greatly reduced drug development time and expenses. The educational/professional backgrounds/skills of owners/managers of Kendle, suitable Infrastructure and HR already in place to go public, broad range of capabilities, an efficient organisational structure, a brand synonymous with high quality work, congenial and motivating corporate culture, proven ability to beat industry standards, and a high CAGR% and income margins due to efficiency at managing and implementing projects. Weaknesses: Lack of international presence so at a disadvantage when competing for larger projects. Furthermore Kendle did not offer Phase 1 services, was undersized compared to its competitors, sub contracting of their work led to lack of economies of scale1 Opportunities: Growth through acquisitions (gmi and U-gene can make Kendle the 6th largest CRO in Europe, and also develop it the capacity to provide customers with a single source for contract research services throughout North America and Europe.) Growing trend to contract the entire clinical research piece to CROs, increased R&D spending by Pharmaceutical companies and increased outsourcing for the same were all positive indications. The demand for global trials/ more sites meant more...
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