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Quintiles' Internet Gambit

Executive Summary

Quintiles is investing heavily in building a platform of web-enabled technology tools for clinical development that it hopes will nudge Big Pharma towards wider adoption of that technology and foster the kind of strategic partnerships that many see as crucial to the future health of the CRO industry.However, despite a consensus that the Internet will eventually revolutionize the way that clinical trials are done, there's also agreement that wide-spread adoption of web-based studies is a ways off.One likely reason that drug companies have moved slowly in this area is that they've been bombarded with pitches from start-up technology companies, promising to transform the clinical study process, but seemingly lacking the infrastructure and financial strength to assure that they can follow through on those promises.Quintiles is looking to use the critical mass of its own resources, and those of its partner, WebMD, to develop the scaleable, supportable, and enterprise-wide solution that it believes Pharma is waiting for. But even for Quintiles, pouring money into web-enabled processes that are unlikely to yield any near-term rewards won't rekindle interest among investors already disappointed by the continuing industry slump.Nonetheless, Quintiles will need to bear the short-term stock hit if it is to reap the possible long-term benefit of moving away from the increasingly low-margin fee-for-service model to one based on more lucrative partnering agreements in which it works with Pharma to re-tool clinical development.

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