M&A in CRO market shows no sign of halt

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These past three years have seen dynamic activities with regards to mergers and acquisitions (M&A) in the field of clinical trials. Deals among contract research organizations (CROs), pharmaceutical cooperations and related agencies peaked at nearly $9 billion, with a remarkable increase in both private and public investments in this sector.

2015

In 2015, the trend was towards mid-sized global transactions if we leave out the $6.2 billion deal of LabCorp buying Covance. While Quintiles acquired CRO Cilo Science – a small enterprise that only had 70 employees in Tokyo and Osaka with the hope of expanding and going deep into Asia-Pacific region, Parexel reached its hand to India following the purchase of Quantum Solutions India to add expertise in pharmacovigilance services.

This action was in the pathway of the enterprise’s going global strategy, as it was precedented by the 2014 acquisition of a UK company called ClinIntel which offered Randomization and Trial Supply Management (RTSM) system.

Moving away from the robust Asia market, Clinipace shifted gear to Europe by purchasing the Germany full-service CRO Accovion. With 10 years of experience in hand, Accovion has expanded Clinipace’s network to 39 countries, yet the US-based organization is still on the search for further globalization.

2016

2016 witnessed a boom in M&A by finishing at $24 billion in total spending. Quintiles led the race by merging with IMS Health for a closing deal of $8.75 billion. The merger result, QuintilesIMS now possesses the largest information portfolios in the healthcare industry. A month after its launching, the new entity made its first M&A move by purchasing TKL Research whose focus was on dermatology clinical development.

Charles River Laboratories was busy in the middle two quarters of the year with three acquisitions from April to September. Sold CROs included WIL Research at $585 million in cash, Blue Stream Laboratories, and Agilux Labs at $64 million. These transactions were expected to add analytical, manufacturing and early-stage services to Charles River.

Continuing its annual M&A activities, Parexel completed its two deals with consulting firm Health Advances and global functional service provider (FSP) ExecuPharm to expand its capabilities and meet with growing demands.

2017

As this year is moving into the last three months, investments and M&A deals have forecast promising growth probability in the field over the next decade. Both private entities and public investors are paying unprecedented attention at the healthcare industry, signaled by Pamplona Capital Management’s $5 billion purchase of Parexel International and Carlyle Group and GTCR’s acquisition of Albany Molecular Research at $922 million.

In May, two big players Inc Research Holdings and InVentiv Health stirred it up with a merger worth $4.6 billion. The combined company is expected to have a value of $7.6 billion, according to Reuters.

Following its expansion to Asia with an office in India earlier this year, Childtern purchased a Japanese CRO to further widen its global scope. As an independent entity, Integrated Development Associates (IDA) operated over Japan, Korea, and Southeast Asia with diverse services ranging from product development consulting to commercialization.

Conclusion 

It is highly likely that this M&A mania will see no stall in the upcoming years since more and more money is being poured into the industry. This, in turn, gives hope for small specialized companies to spring up and expand their activities, while at the same time encourages small and mid-sized studies that are based in Asia-Pacific region. Consequently, in the near future, clinical trials are anticipated to continue to grow and flourish.