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Large pharma cos to invest nearly 7 per cent revenue on next-gen labs by 2025: Capgemini report

Next-gen lab environments are now critical for innovative therapies, reduced time to market, and improved approval rates, but most are still at pilot phase, finds report

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Pharma organisations are rethinking their approach to the setup and operations of their labs, with a focus on accelerating digitalisation, leveraging AI, improving processes, and building the right skills and culture for a lab transformation. The need to accelerate cycle times is driving change, with the majority (92 per cent) of pharma organisations listing this among the top drivers for future-ready ‘next-gen’ labs. This is according to the Capgemini Research Institute’s latest report, titled ‘Building the next-gen pharma lab: Digitally connected, environmentally sustainable, which explores the current state of pharma lab transformation, the challenges that must be overcome, and the expected benefits of building a lab of the future.

According to the research, the top drivers for lab transformation are the need for faster development of innovative drugs, pressure to optimise costs, and the requirement to improve drug approval rates. As a result, pharma organisations are looking to create more agile, efficient, collaborative, and sustainable labs to help them better address these challenges and drive scientific breakthroughs.

Large pharma organisations are planning to almost double their investment in lab transformation by 2025, to up to 7 per cent of their revenue, up from 4 per cent today. Nearly 75 per cent of pharma organisations have already begun their lab modernisation journey while the rest are planning their approach.

Pharma companies today face wide-ranging, global health challenges and a cutting-edge lab environment can help them meet industry demands, making vital medicines and drugs accessible at speed. Backed by technology and continuously evolving in terms of skills, processes and infrastructure, next-gen labs are crucial to accelerate the pace of breakthrough discoveries. The opportunity for organisations lies in successfully adopting the latest technologies and developing a robust strategy, with data and AI at its core, to unlock the full potential of their lab transformation. For those looking to create and scale next-gen labs, the key remains in human-centric design, with scientists positioned at the center of this process,” said Thorsten Rall, Global Life Sciences Industry Lead at Capgemini.

However, while the value of a connected, cutting-edge lab environment is clear, most organisations are yet to advance beyond the pilot and proof-of-concept (PoC) phase. Only one in 10 organisations surveyed have partially or fully scaled their lab transformation initiatives.

As pharma organisations strive towards more digitised and modernised labs, they face key challenges related to data and technology, processes, as well as talent. In addition, diversifying into developing new advanced and innovative therapies poses problems as processes become even more complex. According to the report, most organisations rank data-related issues (90 per cent) and process complexity (92 per cent) as the main challenges faced by labs.

Crucially, next-gen labs require professionals with the right analytical skills to be able to derive insights from available data. But the vast majority (97 per cent) of organisations face the challenge of hiring scientists with a mix of domain as well as digital and data expertise.

While many organisations are in the early stages of lab transformation, ‘leaders’ that are spearheading these efforts are already reaping benefits at considerable scale, reporting reduced errors, higher approval rates, and optimised costs as compared to beginners. Additionally, half of leaders have achieved accelerated time to market through lab transformation measures compared to 23 per cent of beginners.

Leaders are also realising sustainability-related benefits, with nearly 36 per cent of these organisations witnessing a reduction in carbon footprint due to lab modernisation initiatives, as compared to only 18 per cent of beginners.

For this report, the Capgemini Research Institute surveyed 700+ respondents within R&D, quality, and process development labs from 235 pharma and biotech organisations, across the US, the UK, Switzerland, France, Germany, Japan, and India in October 2023. 85 per cent of surveyed organisations have an annual revenue of more than $1 billion and 15 per cent of organisations fall in the range $500 million to $1 billion The respondents were at director level or above, spanning various functional areas, including research and re-clinical trials, clinical trials, analytical method development, manufacturing process development, regulatory affairs, pharmacology and product safety, information/digital technology, data and analytics, as well as innovation.

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