Did you know that pharma services are one of the most active areas of healthcare investing? 

On this episode of The Capital Corner, McGuireWoods' Geoff Cockrell sits down with Daniel Brinkenhoff, Managing Director at Centre Partners, to discuss the segmenting of the pharma services sector and some of the headwinds and tailwinds that investors are seeing.

To kick things off, Dan explains how the pharma services sector has seen an uptick in outsourcing due to rapidly evolving science and technology. These advancements have opened the door for players like biotech and biologics by bringing down the cost of targeted therapeutics, but have driven up the costs of bringing new drugs to market by increasing the complexity of production. The market is further segmented by the complexity of the science itself, requiring more specialized skill sets that are difficult for one company to employ. 

Despite the new challenges with more complex science and technology, innovation is driving a strong growth outlook for the sector. Dan anticipates that the new therapeutics coming to market will continue to result in high single to low double-digit growth. 

This sector is also sheltered from the broader economy, with massive capital going into developing new drugs, whatever market conditions may be. Dan also shares insights into the niche subspecialties that he finds particularly compelling, including clinical trial site management, patient recruitment, and anything consulting-oriented. 

“The knock on some of these segments is that sometimes they’re project-based work, but there are some interesting consulting firms that really help the smaller-end biotech firms navigate the FDA approval process, their regulatory submissions, paperwork with the FDA, market mapping, and some interesting specialty firms out there that we think are quite attractive as well,” he says. 

Featured Guest

Name: Daniel Brinkenhoff

What he does: Daniel is the Managing Director at Centre Partners. Before joining the firm in 2008, he gained experience at ClearLight Partners, LLC and UBS Investment Banking. 

Organization: Centre Partners

Connect: LinkedIn

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