(Editor’s Note: As the North Carolina Biotechnology Center and a host of biotech and life science companies within the state head to San Diego, Calif., for the national BIO convention, Jim Shamp, director of media relations for the center, provides an in-depth look at key segments of the North Carolina’s life science industry; part one focuses on the growth of contract research organizations.)

RESEARCH TRIANGLE PARK, N.C. – Contract research organizations (CRO) aren’t what they used to be. But, they are where they used to be: in North Carolina.

North Carolina reigns, after more than three decades of growth and change in the industry, as the CRO epicenter of the world.

Small-scale contracts and agreements for clinical support work had been part of pharmaceutical research practice in North Carolina and elsewhere for years before things really got rolling in February 1982 from a trailer parked on the campus of the University of North Carolina at Chapel Hill.

Dennis Gillings, London born and newly minted as a UNC biostatistics professor, and fellow biostatistics faculty member Gary Koch, had been learning there was money to be made doing detective work. They were being hired to apply their data skills to help pharmaceutical companies pinpoint and overcome problems with drugs.

Up goes Quintiles

So they co-founded a consulting company they called Quintiles and hired some of their university friends, mostly as part-timers, to do the work while they remained on faculty. A few years later, Gillings resigned his faculty post to devote full time to building what is now the largest provider of biopharmaceutical development and commercial outsourcing services in the world.

Gillings, now believed to be a billionaire, gave $50 million to the UNC School of Global Public Health, which bears his name. Quintiles’ public offering of stock last year raised $947.4 million.

It was 1985, three years after Quintiles’ founding, that Fred Eshelman, who’d earned a bachelor’s degree at UNC, founded a one-man pharmaceutical consulting business called Pharmaceutical Product Development.

He initially operated out of his Maryland home, but after a year decided to return to his beloved Tar Heel state. He hung out the PPD shingle in the North Carolina coastal city of Wilmington, and also made CRO history.

Now PPD is also a global giant, and UNC’s pharmacy school is the Eshelman School of Pharmacy, thanks to Eshelman’s $20 million donation in 2003. In 2010 Eshelman founded a PPD spinout called Furiex Pharmaceuticals, which Forest Labs bought in April 2014 in a deal approaching $1.5 billion. Also, in 2011, two private equity firms ponied up $3.9 billion in cash to buy PPD.

North Carolina leads with 128 CROs

Today North Carolina is home to 128 CRO companies employing over 21,000 people within the state and tens of thousands of others around the world.

They include large multi-nationals like Quintiles, PPD, Inc Research, Wilmington Pathology, LabCorp, Solstas Lab Partners, Duke Clinical Research Institute and RTI International.

Mid-sized organizations headquartered in the state and large multi-nationals with North Carolina campuses include firms like AAI Pharma, Catalent, Metrics, Novella (Quintiles), Charles River Labs, PAREXEL, PRA International, Genova, InVentiv Health Clinical and Rho.

There’s also a full complement of small, targeted CROs, many the result of churn in the industry and an entrepreneurial spirit statewide that has driven North Carolina to the top tier of life science clusters.

CROs run the gamut of support

Today they support pharma, biotech and medical device companies and research institutions with a wide range of services, including biopharmaceutical development, biologic assay development, commercialization, preclinical and clinical research and clinical trials management.

Their main U.S. trade association, the Association of Clinical Research Organizations, says the top five therapeutic areas for CRO activity are: oncology, the central nervous system, infectious disease, metabolic disorders and cardiovascular disease. Vaccine development is another growing area of research for CROs.

Other key ACRO stats:

• In 2013, CRO industry revenue was estimated at $21.6 billion. That number is expected to reach $23.6 billion in 2014—representing one-third of drug development spending.

• ACRO member companies employ approximately 100,000 people worldwide and conduct more than 11,000 clinical trials in 115 countries, involving nearly two million research participants.

• ACRO member companies have contributed to the development of all of the top 50 selling biopharmaceutical products globally.

• CROs participate in the global development of the vast majority of new treatments and therapies approved worldwide each year.

(C) N.C. Biotechnology Center