5 Key Takeaways from the Goodwin Pharma Services Symposium

Executive Summary:

Pharma services continues to attract investor interest, but heightened selectivity, policy uncertainty, and evolving market dynamics are reshaping where capital is being deployed. Following the Goodwin Pharma Services Symposium, Jordan Abrams shares five key takeaways on the investment landscape, including the growing importance of asset differentiation, AI's evolving role in drug development, and shifting global development strategies. Additionally, he highlights the factors investors should consider as they evaluate opportunities and position assets for long-term growth and successful exits.

2. Commercialization Still Offers Value, Even at a Premium

Valuations in market access and commercialization are high, but the space is still attractive, with ad spend in particular remaining an opportunity. Paying a premium for a strong commercialization asset can still make sense if investors are more selective elsewhere.

For contract development and manufacturing organizations (CDMOs), commercial capabilities are now table stakes. Large pharma clients want a partner that can support a drug across its full lifecycle, from clinical through commercial (though specialization still adds value). Because pharma relationships are sticky, new customers are hard to win organically, which has made M&A a main way to add them.

3. AI Is Raising Drug Development Quality, Not Quantity

AI isn't making preclinical pipelines bigger. Rather, it's raising success rates. That means the programs entering the clinic should continue to improve over the next 10-15 years. Further along the development path, the nearest-term opportunities are practical ones, especially in patient recruitment and manufacturing. Beyond those use cases, data and analytics in pharma services are still early.

4. Global Footprint Is Now a Strategic Decision

China has become a real option for drug development due to efficiencies in Phase 2 trials because of lower labor costs and a less complex regulatory environment. The expectation that those studies must be repeated in the US or EU is fading, and MFN is speeding up the shift. The cost advantage extends beyond development to the price of therapies themselves. In cell therapy, for example, treatments cost around $400K today, and China is working toward bringing that closer to $20K. That gap may become hard for the industry to ignore.

Supply chains face similar pressure. Reshoring has practical limits, and tariff policy is still unpredictable. Being able to source from both sides of the Atlantic reduces geographic concentration and tariff exposure.

5. Clinical Trial Sites Have Become an Investable Asset Class

Clinical trials are growing in number and complexity, and more than 80% fail to enroll on time. That gap has turned sites into an investable asset class. The site market has been consolidating for the past 5-10 years and now includes dozens of PE-backed platforms. Sites also carry limited AI disruption risk. Scale matters, but service quality and execution are still what separates the leaders.

Implications for Investors

Pharma services remain an attractive market, but the bar for a premium outcome is higher. Key questions to ask in commercial diligence:

• Would this asset still stand out without its growth rate? If not, what's the differentiation or margin story, and will it hold up by the time we sell?
• If we're paying a premium for a commercialization asset, what specifically justifies it? Does that leave us room to be disciplined elsewhere?
• If we're evaluating a CDMO asset, can it stay with a client drug through commercialization, or does it lose the work when the program moves past the clinic?
• Where is AI delivering practical results today, such as patient recruitment or manufacturing? How much of the value is still theoretical?
• If faster, lower-cost clinical trials in China become standard, does that help or hurt this asset's customers and competitors?
• As trials grow in number and complexity, does this asset solve a real sponsor problem, like enrollment, or just ride the volume?

About Grant Thornton Stax

Grant Thornton Stax brings corporate strategy and operational knowledge within the healthcare industry, paired with 30+ years of experience serving clients throughout the investment lifecycle. Our highly specialized healthcare team, consisting of seasoned industry experts and insiders, provides knowledgeable depth and breadth to every engagement-delivering comprehensive coverage spanning the entire healthcare landscape. Click here to learn more about our Healthcare expertise or contact us directly.