With 2022 firmly planted in our rearview mirror, and the planning for the new year essentially complete, we all look forward to a new year with cautious optimism as we wait to see what the year holds in store. CEO economic outlook has dropped considerably compared to just two short years ago and the biotech and pharmaceutical industries are in aggregate, no exception. Inflation, supply chain challenges, talent shortages, global conflicts have all created a less than rosy picture of the opportunities awaiting us all in 2023.

Having had the pleasure of serving as CEO for our organization, I look back on what we have done well and where there are opportunities to improve our ability to serve our clients, inspire our team, and meet the Company’s goals in 2023.

We all have heard that “a rising tide lifts all ships.” It is very easy to see that this was prevalent in the industry for a period with 2021 essentially being the capstone of the positive run for the industries mentioned and thus the industry that serves these markets. Of course I’m speaking of the contract services organization we all refer to as CRO, CDMOs, CMOs, whichever C”X”O is firmly aimed at the biotech and pharmaceutical industries.

It is not uncommon to justify when times are good (and arguably “easy/ier”), many if not all can point to increased measures of success and enjoy the excitement of growth in the market and the potential to capitalize on the opportunity. Justifications become easier, optimism accompanies it, and the ride of enthusiasm is one that we all want to see continue. However – like every amusement park ride – the time comes when the ride is over and the thrill has passed, giving way to the steps that come next to ready ourselves for the next ride. For those companies that had simply shown up to jump on this ride when it was thrilling, the realization that the easy investment to get on when it is getting going is not the same commitment as required once the ride is slowing down. For those that prepared for this inevitable change, the ride (or the market) requires adjustments and an understanding of how to prepare for what’s next.

2023 will bring strategic planning back into sharper focus, requiring more commitment from leadership to dive deeper and more often into the information and convictions that drove the business in the last 2-3 years. With more risks than just a failed drug candidate in the R&D process, the CXOs must realize that the industry, particularly the biotech industry – the major source of the service provider’s customer base is under significant pressure to navigate a very different financial landscape than it was experiencing just a few months earlier. Consolidation of capital, timing of obtaining capital, portfolio risk assessment is taking center stage for the biotech industry. Outsourcing is obviously a key component of the biotech’s success, and the industry should and will take a more in depth look at how it will move forward to advance drug candidates effectively and efficiently. Pharmaceutical companies – even large companies – are not immune to effects of the current environment and will evaluate their needs as the opportunities become ever more complex as biotech’s will be willing to partner more going forward.

So what should the CXO providers prepare for (or have prepared for)?  

Well, as many might realize the ability to see the path further ahead, make wise investments, prepare the foundation of the business to withstand the challenges, are all coming into focus in the coming year. Clients have been willing and somewhat having to adjust to the growing lead times the CXO industry has enjoyed and, in many cases, taken advantage of the situation.   However, it is inevitable that this pendulum will be challenged as budgets of clients get tighter and cash burns and development milestones are heightened as the driving KPIs for continued success. Finding outsource partners who understand and have the sophistication to help manage timing needs, understand they are not only a vendor, but need to bring more to the plate than just a good product to differentiate the CXO providers. Successful vendors will engage more with their clients and evaluate how their experience and understanding of outsourcing trends and best practices may make the difference for the company who has little time to spare and is counting on the help and guidance of a professional service provider to do more than just the science. These CXO providers that can not only provide the product but also help their clients become better at outsourcing will be the winners in this new market and will be prepared to enjoy the ride, even though the twists and turns may be a bit more treacherous than previous years.

KCAS realized just a few short years ago that the CXO market had undergone radical changes. The middle market had been all but eliminated by a surge in acquisitions by the larger CXOs. Since then, KCAS has been aggressively investing, growing its offering and maturing its talent and capabilities. 2023 will be a defining year as these investments, commitments and vision start to reveal the organizations commitment to becoming a next generation provider of bioanalytical services and offering the industry an answer to the challenges that the new market will be offering in these more challenging times in 2023.

The reality of being able to do this simply comes down to making investments needed to engage with clients to meet their changing needs. This will separate those providers who do well during the downturn vs. those who don’t. KCAS is and will continue to evolve. Looking forward to 2023, the Company outlook is ready for its next chapter…

  1. The Company has brought over 95,000 sq.ft. of new laboratories online in the US in 2022 alone, and each of these labs have been purpose-built to provide the state-of-the-art environment needed to be a top tier provider in these service offerings.
  1. We have advanced our People Operations team to assure the company can attract, identify, hire, train, motivate and retain the top talent. With significant support from investors, we knew collectively that the prevailing trend of the Great Resignation had to be met head on. Advances in training, engagement, recruiting, career development, communication and on-boarding were all key. The investments in these areas speak for themselves, with single-digit turnover and a true focus on investment into our team, 2023 is getting off to a great start for the most critical of all business needs – its people.
  1. KCAS was successful in bringing two acquisitions into our family of companies in 2022. FlowMetric (Pennsylvania, USA – Milan, Italy) and Active Biomarkers (Lyon, France) were welcomed to help define, enhance and grow the Company to continue advancing our ability to serve our clients. With significant investments, all sites are now more capable of servicing the industry on a global scale going forward.
  1. We have initiated a sophisticated program management enterprise system, specifically designed for R&D development in the bioanalytical space. This system is seamlessly integrated into the Company’s CRM and ERP systems to help accelerate the Company’s ability to track, manage, assess, forecast, and improve business intelligence.
  1. We have implemented a complete eQMS system and are looking to advance this throughout all sites to speed the process accelerating information needed to manage a robust and sophisticated quality system in today’s regulatory and global environment.
  2. The Company has continued to advance its investment in all areas of the organization. From scientific expertise, to helping clients scope work more effectively, to hiring the technical talent in its laboratories and advancing leadership; the ability to support our clients has never been better.
  3. KCAS continues to give back to the community in a variety of ways…. Internships, volunteering, STEM initiatives, all focused on the staff’s sense of belonging and giving back to the community.

2023 may prove to be a challenging year, but KCAS is ready for the next ride and prepared to support its clients in making it one of the best years yet!