Magazine
The Pathology Perspective
A behind-the-scenes look at a boutique provider
By Steve Snyder
In my year-in-review article for 2007 (Contract Pharma, November/December 2007), I introduced the term "boutique provider." I defined this term as a company that focused on providing a particular service for drug development, with an emphasis on high quality and exceptional customer service. These companies are different than legacy providers that try to cater to every need. Boutique providers identify a specific need in the marketplace and then focus the expertise necessary to address this need.
In this article, I have the unique opportunity to share a behind-the-scenes look at one boutique provider while concurrently introducing the role of the veterinary pathologist in drug development. In my previous articles, I have discussed the importance of preclinical studies in drug development and how sponsor companies can best position themselves for a successful outsourcing experience. This advice has largely focused on those activities leading up to and during the study but, often, it is what is learned after the in-life phase that defines the toxicity of a potential new drug. Those that are less familiar with the details of drug development may not realize that an extensive histopathologic evaluation is a key component of most preclinical studies. This is where the role of the veterinary pathologist is so critical.
I recently had the opportunity to interview Chris Johnson, who is the co-founder and vice president at Vet Path Services, Inc. Here is some of our conversation:
Steve Snyder: Describe the services that Vet Path Services, Inc. provides.
Chris Johnson: Vet Path Services (VPS) provides GLP-compliant pathology, pathology peer review, paraffin histology, plastics histology, necropsy, and histomorphometry services. Through strategic relationships, we provide immunohistochemistry, in-situ hybridization, and high-resolution slide scanning services. Our sister company, VPS Archives, provides GLP-compliant long-term specimen archiving.
SS: What business sectors do you serve?
CJ: We serve a broad range of companies including pharmaceutical, animal health, medical device, biotech, chemical, consumer product, and contract research companies.
SS: What motivated you to start this business and how did you go about doing it?
CJ: Our primary motivation for starting this business was the desire to work for ourselves. In doing that, our goal was to create an environment that would allow us the flexibility to exceed the expectations of our clients and our employees. We felt that if we created a dynamic company and work environment, the chances were good that the business and great people would follow. Since April of 2005, we have grown to more than 35 employees, including seven veterinary pathologists, and a breadth and depth in histology and pathology that allow us to support any type and size of study.
SS: As a provider of pathology and histology services, what are the challenges that you face in this market?
CJ: There are a lot of challenges in this market. One big challenge is managing the growth and direction of our company in an environment where outsourcing budgets and needs change yearly, and building relationships with large companies is very difficult. To date, our business has grown primarily through word-of-mouth without marketing or professional recruiting. As we grow our business, we will continue to add infrastructure and expertise, and this will require continued expansion of our client base through directed marketing, and active professional recruitment activity. Another challenge for us is to differentiate ourselves from our competition. We do this the old fashioned way -- by offering competitive turnaround times, controlling our costs, and maintaining a very high standard of quality.
SS: What are some of the business trends that you are seeing in the preclinical drug development market (e.g., increase in outsourcing, requests for more extensive tissue processing, specialized techniques?)
CJ: Outsourcing is increasing as industry attempts to reduce in-house costs associated with a large labor force, as well as manage their pipeline and budget fluctuations. An interesting trend is that our clients are requesting dedicated on-demand histology and pathology capacity. Much like the in-life side of our business sector, this involves a client paying for reserve capacity in order to meet upcoming needs, especially as it relates to turnaround time. Another trend is that the interpretation of the regulations by industry Quality Assurance groups can result in redefining industry standards with respect to GLP compliance. Although sometimes frustrating, this serves to improve our procedures and systems while setting the bar higher for companies to successfully enter and succeed in our business sector.
SS: Are you seeing any regulatory trends that focus on your services?
CJ: Clear chain-of-custody documentation and timely archiving of histopathology specimens are receiving heightened attention from our clients and regulatory agencies. As noted above, regulatory agencies and Quality Assurance groups are raising the bar across the board on industry standards, with a tighter interpretation of regulations and expanded expectations on quality systems, validation procedures, and overall documentation practices.
SS: Are there any recent scientific trends or areas of scientific focus in pathology or histopathology services?
CJ: Scientific issues really depend on the nature of compound and whether a specific organ/tissue is a known or suspected target, since known or suspected target tissues may require a more extensive examination and even special procedures. More and more sponsors are now requesting pathology peer review of many of their studies.
SS: What is one thing that sponsors should be aware of when they are planning to use your services?
CJ: To the greatest extent possible, it is very important for sponsors to inform us of their histopathology needs and changes as early as reasonably possible. Often, some delays during the early phases of a study can be mitigated by expediting the tissue processing and evaluation. In order for any company to provide an effective expedited turnaround time, sufficient notice is necessary in order to schedule and reserve the required resources. In addition, especially where target tissues may be involved, we recommend that all tissues from all animals be taken to slide in order to promote time-efficient evaluation of these tissues.
SS: What can sponsors do to get the histopathology portion of their studies completed more quickly?
CJ: We established our business to leverage the opportunity for sponsor companies to get the histopathology portion of their studies completed substantially faster by creating a nimble, independent contract histopathology provider. Furthermore, if a sponsor is not happy with the histopathology turnaround time quoted by a full service CRO, they can now request that the histopathology be subcontracted to a company that can meet their need.
SS: From your perspective, do you see any decline in the demand for preclinical outsourcing any time soon?
CJ: Based on information gathered from industry leaders, journal articles, and the press, the current trend for many large pharmaceutical companies of containing infrastructure costs by reducing head count will continue to increase and drive their need for outsourced services, especially within the preclinical R&D aspect of their business. Outsourcing trends have been cyclical in the past, and one would be naïve to think the current trend may never retreat, but this doesn't appear to be the case for the next several years to come.
SS: Most sponsors prefer to work with pathology/histopathology providers that have board-certified veterinary pathologists on staff. Why is this distinction so important?
CJ: Board certification is viewed by many to be a minimal qualification for evaluating tissues from regulated studies. It provides clients with assurance that the person working on their studies has attained a certain level of training and competency within their profession, and that their work will be performed correctly. In addition, in many regions within the U.S., a veterinarian cannot hold himself out to the public as a "veterinary pathologist" without first attaining specialty certification. Board certification is now considered by many QAU's as an expected industry standard.
SS: I have heard that board-certified veterinary pathologists are in demand in the drug development industry. What is your view of this industry need and why is the demand so great?
CJ: Board-certified veterinary pathologists are in demand, and this demand is high because the supply is low. The supply is low because, in part, compensation is not competitive versus other veterinary specialties, relative to the time required for pathology training. Another way of looking at it is that there is a shortage of employers willing to provide compensation packages that make the career attractive. If employers are willing to provide competitive compensation, they will have no problem attracting and retaining pathologists.
SS: A lot of U.S.-based sponsors continue to look to China and India for lower priced preclinical outsourcing options. What are you hearing about this market specifically relating to the availability of pathology/histopathology capabilities?
CJ: We hear a lot of talk about the potential for competitive services that are based in Asian markets but we are not aware that any significant competition has materialized to date.
In this article, we learned about veterinary pathology in preclinical drug development and how one boutique provider has built its business by focusing its services in this niche. We also learned that some sponsors have entered into agreements to reserve resources with this boutique provider (Vet Path Services) when, previously, it seemed like these agreements were exclusive to legacy providers. If this example is indicative of a growing trend, it follows that the demand for preclinical outsourcing continues to be robust and that opportunities certainly exist for appropriately positioned boutique providers. --SS
