The Merck-Quintiles Partnership: Sponsor, Do You Take This CRO….?

Recently, Merck Serono entered into a new, five-year clinical development deal. The deal was with none other than Quintiles, the world’s largest CRO (with approximately $3.7 billion in revenue). Moving forward, Quintiles will be the sole primary provider of Merck Serono’s outsourced clinical development services for its global clinical programs. The agreement will span the full spectrum of clinical development. Its scope will be from Phase I through to post-marketing approvals.

Sponsors and CROs partner up all the time. But it’s the details which make this Merck-Quintiles partnership unique. The idea here is that the two will work as a single clinical development machine. Merck Serono will handle all the clinical development strategy. Quintiles will focus on study execution and design. Sounds great on paper, but will it work?

Will it Work?

One thing that isn’t clear is the financial (and risk-sharing) arrangement.  The fact that dollar figures were not disclosed is not surprising by any means. But the nature of this relationship is going to vary greatly based on how Quintiles is getting paid. Will it be based on services delivered (the normal business model) or will they get a piece of future revenues from any products developed during the tenure of this arrangement?  Is it a true partnership or simply a case where Quintiles locked in a longer-than-usual exclusivity agreement?

A Look at the Details

The press release issued by Quintiles indicates that this seems to be a standard sponsor-CRO collaboration to some degree. However, there are a few items of note that set this particular deal apart from the rest.

First is the wording of the announcement. “Quintiles also will be a key contributor to Merck Serono’s future clinical trial design activities”.

Second, is this statement: “To fully leverage the expertise of both organizations, leaders from Quintiles will collaborate in strategic decision-making processes affecting the development of the Merck Serono portfolio.”  It’s nothing new for a CRO to work on trial design. But that first statement implies that Quintiles will perhaps have a greater hand in design activities than is typical.

The second statement goes far beyond this and indicates that Quintiles is moving into uncharted waters for a CRO. In the past, CROs have acted more as ‘hired guns’. In this case, it sounds like Merck Serono is bringing them on board to actually help “co-develop” products.

Tom Pike, CEO of Quintiles, said in a press release, “This agreement is built upon a long-standing commitment to trust and transparency between our two organizations, and I’m confident it will only be enhanced by this innovative relationship.”  I think Mr. Pike nailed the two of the three things that will make this fly or fail – trust and transparency.  If these two companies can stop the finger pointing that tends to define many sponsor-CRO relationships, then this has a legitimate shot at working.

But let’s not forget the other key part of the equation – money.  Given that Quintiles has so much input into Merck Serono’s trial design and portfolio strategy, there seems to be a lot more at stake for both parties here. Money is far and away the most common reason for the implosion of partnerships (whether between companies or spouses). Let’s hope that Merck Serono and Quintiles have all three pillars of partnership – trust, transparency, and financial reward – in place and in balance. In any case, it will be interesting to see what develops here.

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