The Changing Outsourcing Paradigm from Service to Strategic Partnership: The Vendor Viewpoint

1. The Changing Outsourcing Paradigm from Service to Strategic Partnership:The Vendor Viewpoint N. Susan Slagle V.P. Project Management, inVentiv Clinical Solutions Massachusetts Biotechnology Council Biostatistics and Data Management Committee October 7, 2008 Confidential inVentiv Clinical Solutions 2008

2. The Changing Outsourcing Paradigm Macro Viewpoint Drug and Biotech companies are increasing their R&D budgets to build out their product pipelines which will increase their use of outsourcing (Moody’s Global Corporate Finance August 2008) Drug companies are under intensifying political and scientific attack regarding safety and high cost of their products Generic versions are on the rise and threaten market share and revenue Confidential inVentiv Clinical Solutions 2008

3. The Changing Outsourcing Paradigm Confidential inVentiv Clinical Solutions 2008 Sponsor Viewpoint Sponsors are looking for outsourcing solutions that result in cost savings, better utilization of internal/ external resources and high quality outcomes Biotech firms which concentrate on discovery often lack the infrastructure to conduct clinical trials and take a product to approval Clinical Trials are increasing in complexity and difficulties in patient enrollment are pushing companies to find treatment naïve populations in regions such as Asia and Western Europe

4. The Changing Outsourcing Paradigm Confidential inVentiv Clinical Solutions 2008 Vendor Viewpoint CROs are being called upon to help fill the void as R&D expands and industry downsizes Calls for the development of flexible service solutions to fit the varying needs from Biotech to Big Pharma, from local to off-shore Shift in outsourcing model from service to strategic partnership allows for closer collaboration, development of product knowledge, and sharing of risk

5. Flexible Outsourcing Solutions Flexibility is key to meeting outsourcing needs as it is not one size fits all Alternatives in outsourcing provide appropriate structures and levels of control to meet the situation Service offerings tailored to meet the sponsor’s needs allowing for variability both across and within organizations Finding the right solution must include enhancing quality and efficiencies

6. The Flexibility Continuum Maximum Sponsor Control Executed Internally Minimum Sponsor Control Fully Outsourced Resource Teams Functional Services Staff Augmentation Full-Service Solutions Maintaining desired level of control with significant flexibility and cost-effectiveness

7. Staff Augmentation Great solution for: Short-term resource needs Not well suited for: Companies with minimal infrastructure or long-term projects Requires on-site support by sponsor and more investment to provide direction, systems and processes Co-employment rules contribute to frequent turnover leading to lost time due to replacement of staff (hiring, training, loss of knowledge base, team disruption, etc) Limited accountability for vendor once placement made puts burden on sponsor to oversee and manage • Allows for direct contact with Sponsor staff • Sponsors select individuals with desired experience/skill level • Can easily shift assignments to aligning resources with changing priorities • Utilize Sponsor systems and process for seamless integration • Collaboration, communication and team building opportunities enhanced by close proximity

8. Staff Augmentation Examples of Staff Augmentation Hire statistical programmers to help support analysis and reporting of clinical trial data. Bring on a specialist in therapeutic area to aid with trial design. Hire programming staff to build EDC applications in the sponsor’s environment.

9. Dedicated Resource Groups Great solution for: Medium to long-term resource needs Not well suited for: Emerging companies where workload or funding may impair full team utilization Full resource utilization requires upfront planning and collaboration to be successful- adjustments may need to be made for changes in workload (ramp-up or downsize) Fluctuations in workload can result in unstable work environment which may affect retention • Sponsors have input into selection process defining desired experience/skill level • Sponsor and vendor share management and accountability • Flexible, rapid deployment of resources based on sponsor priorities • Utilize the same process and systems for seamless integration with work done in-house • Collaboration, communication and team building opportunities

10. Dedicated Resource Groups Examples of Dedicated Resource Groups Remote group of statisticians and statistical programmers to support reporting of Phase III trials along with preparation of ISS/ISE for submission. Group of Statisticians that have long-term experience with product and clinical trial knowledge Data management team hired to support data validation and locking in sponsor’s system.

11. Functional Outsourcing Models Great solution for: Individual project needs Not well suited for: High priority projects or highly specialized indications requiring in-house knowledge Reduced control over process requires confidence in vendor quality systems and final product Members of clinical project team may be located at sponsor and various vendors making communication more challenging May impact in-house knowledge of studies and results that are necessary for support of products and regulatory submissions • Strategic outsource planning by functional area heads yields efficient dissemination of work • Meets many project needs without staffing or system challenges • Allows for selection of best in class functional vendors • Reduces the load on the sponsor • Vendor management is accountable for delivery of specific projects adhering to metrics and timelines in an efficient manner

12. Functional Outsourcing Models Examples of Functional Outsourcing Protocol developed in-house and then outsource SAP and statistical reporting Statistical expertise provided for protocol and SAP for an adaptive trial Outsource support of Data Safety Monitoring Board to include data analysis, reporting and consultation Vendor develops EDC system, DMP and executes data management activities delivering final clean locked database for a given study

13. Full Service Models Great solution for: Sponsor wants to only provide oversight. (May not have in house staff, be lower priority project, or be more efficient model for delivery) Not suited for: High priority projects or highly specialized indications which require in-house knowledge and coordination Reduced control over process requires confidence in vendor quality systems and final product. May impact in-house knowledge of studies and results that are necessary for support of products and regulatory submissions Integration issues may arise if submission projects are executed at various vendors using variable standards and systems Vendors who specialize in some areas but do not have cross-functional delivery strength • Sponsor provides oversight at a high level with minimal resource commitment and lower overhead • Vendor coordinates all aspects of the clinical trial including hand-offs between groups, risk mitigation and issue resolution • Places the balance of the project team on the vendor side which enhances collaboration • Selection of vendor with specific therapeutic expertise or access to desired resources or patient populations

14. Full Service Models Examples of Full Service Models Delivery of a clinical trial from protocol development to execution to delivery of results and submission ready information Support product development for a small biotech company including regulatory advice, research planning and clinical trial execution Support Phase I program for emerging biotech company with first in man, dose escalation and food effect studies.

15. Shift from Service to Strategic Partnership • Paradigm shift from fee for service to a more strategic and collaborative relationship with a long-term focus • Sponsors are selecting a few trusted vendors and forming partnerships and alliances • Strategic partnership allows for a deeper level of communication and collaboration (communication on all levels with governance and oversight at executive level) • Increased efficiencies and decreased costs result from increased stable work volume, gain in product knowledge and long-term execution to sponsor standards

16. Shift from Service to Strategic Partnership • Re-engineering of process from in-house execution to oversight and management of vendors • Shift in skill sets needed by in-house staff from technical expertise to project oversight demanding a higher level of communication and coordination • Increase in shared standards, processes and systems for ease of integration • Executive commitment and governance board to provide oversight and expedite decision making • Shared risk and rewards as product development strategies and up front clinical trial planning allow vendor to maximize deployment of resources and streamline execution

17. Shift from Service to Strategic Partnership Traditional Outsourcing Paradigm Modern Partnership-Based Models Dedicated Resource Teams Full Functional Outsourcing Strategic Alliances Staff Augmentation Functional Outsourcing Full Service Outsourcing

18. Factors in a Successful Partnership • Pairing of sponsors and vendors who are in alignment on objectives and have a strong commitment to a successful outcome • Building effective lines of communication • Put governance and oversight mechanisms in place • Sufficient resources on both sides to effectively collaborate and manage the relationship • Strategic planning will lead to rapid and efficient resource deployment and streamline execution • Mutual investment and risk sharing from both partners leads to a well-balanced relationship Confidential inVentiv Clinical Solutions 2008

19. Dedicated Resource Groups The Challenge: Women’s health study with large back-log of CRFs – now a major company priority Backlog of 200,000 CRFs Monthly influx of 29,000 CRFs CRFs needed to indexed, scanned and entered Entered data needed to validated, DCFs sent, and queries resolved Delivery of cleaned database ready for lock in sponsor system Aggressive project timeline due to shift in sponsor priorities The Solution: Assemble a Dedicated Data Management using a partnership vendor Partnership already established with the vendor trained on sponsor data management systems and processes Assemble a dedicated team of 18 data management professionals and train them on the project Improve metrics and reduce turnaround time for data entry and cleaning

20. Dedicated Resource Groups Outcome • Average turnaround time from receipt of CRF to validation was reduced to 48 hours • Weekly performance metric expectations established • Expectations were exceeded as gained familiarity • Sponsor Expectations: 80-100 visits/wk cleaned per person • Actual Performance: 110-120 visits/wk cleaned per person • Average Total Cleaned: 1500 visits/week • Database cleaned 2 days ahead of schedule • Results: Database lock met aggressive timeline allowing sponsor access to trial results sooner.

21. Full Functional Outsourcing The Challenge: Company wants to fully outsource all of it’s statistical programming activities Flexible support needed across multiple therapeutic areas Working with multiple vendors increases sponsor oversight and presents difficulty in maintaining standards Develop efficiencies in creating analysis datasets based on CDISC and ADaM requirements Team based staff on sponsor side results in downtime for some staff while others are overwhelmed The Solution: Establish a partnership that allows for the full support of statistical programming activities Establish Governance board along with Alliance Manager to expedite communication and decision making Single vendor manages across projects to deliver against agreed upon timelines and standards Manage allocation of resources to correspond with sponsor priorities Vendor has direct secure access into sponsor system

22. Full Functional Outsourcing Outcome • Higher level of Collaboration • Executive level collaboration on resource planning and milestone agreement across protocols • Team Leads have direct access to sponsor statisticians and play a consultative role as they develop product knowledge • Single vendor responsible for oversight of other vendors (e.g. programming off-shored to India) • Performance Metrics and increased resource utilization • Rapid delivery of key statistical results (24-48 hrs post-DBL) • Resources can be optimally deployed as priorities change • Detailed level of standardization results in maximum efficiency • Seamless delivery as statistical analysis and reports are placed directly into sponsor’s system Confidential inVentiv Clinical Solutions 2008

23. Strategic Alliance The Challenge: Small pharma company has limited in-house staff and infra-structure to take their product to market Sponsor expertise lies with the product while needing support to bring it to market In-house staff limited to executive level requiring systems and resources to design and execute clinical trials Seeking partner with knowledge of regulatory requirements and clinical trial design and execution The Solution: Establish a partnership that allows for the full support of clinical development Partner with a vendor that specializes in supporting small company regulatory submissions Establish strong lines of communication and governance Provide consultative expertise on submission strategies and support regulatory interactions Clinical trial execution and delivery provided according to agreed upon timelines

24. Strategic Alliance Outcome • Strategic Planning and consultation from vendor • Collaborate on the product development and submission plan • Recommend 505 B2 submission route saving time/money • Produce publications & manuscripts based on product knowledge • Performance Metrics and increased resource utilization • Flexibility to provide resources to compliment in-house expertise • Ramp-up or down to maximize resource utilization • SOPs, systems and standards are already in place • Efficiencies gained across protocols with re-useable tools • Delivery of 6 Phase I-II trials and FDA support Confidential inVentiv Clinical Solutions 2008

25. Summary Pharma and biotech industry must find smarter ways to get their products to market. CROs need to provide a tactical blend of options to meet the changing needs of their customers Both sides must be creative in finding the best, most efficient, cost effective outsourcing solution Need for long-term solutions has led to strategic partnerships which can benefit both partners through shared risks and rewards Confidential inVentiv Clinical Solutions 2008

26. Summary • Benefits of long-term Strategic Partnerships: • Decreased costs due to predictable long-term work volume maximizing resource utilization and allowing for process efficiencies to be realized • Increased quality as standardized, repeatable processes are employed and product knowledge expands • Deeper lines of communication across multiple levels including highest levels builds long-term trust and improves collaboration Confidential inVentiv Clinical Solutions 2008

27. Questions & Discussion