The European pharmaceutical contract research organisation (“CRO”) market comprises businesses that provide pharmaceutical research and clinical development support to third parties. We segmented the European pharmaceutical CRO market based on the research stages into: (i) drug discovery & pre-clinical and (ii) clinical.

The European drug discovery & pre-clinical research market has a long tail of regional niche players specialising in certain therapeutic areas and modalities (e.g. advanced therapies, compound-specific, personalised medicines), while the less diversified clinical research segment is more concentrated around major players. An inclination towards portfolio diversification and integrated services are key drivers for consolidation in both segments with European players facing significant competition from the US and Asia.

Sponsor-led interest has been significant, with ~60% of identified assets backed by financial sponsors (June 2023). Private equity investors are attracted to the defensive nature of the pharmaceutical sector, the growing demand for research outsourcing and related services, and the underlying growth driven by an ageing population combined with a rising prevalence of chronic diseases and opportunities arising from various technological innovations.

Relevant ESG topics mainly revolve around social and environmental challenges linked to the ethical aspects of clinical trials and their carbon footprint. As such, identified players with large global sites increasingly rely on renewable energy sources and eco-friendly development strategies. From a social standpoint, the well-being of trial participants can be safeguarded with the introduction of novel technologies.