Synexus, a multinational company specializing in recruiting for and managing later-stage clinical trials at its centers across the globe, has been purchased by Jaguar, a holding company of Pharmaceutical Product Development (PPD).
“Synexus will continue to operate under its own name as a separate business unit with its existing management team, which is great,” said Synexus CEO Christophe Berthoux. “Jaguar will support Synexus in its overall expansion strategy, adding new countries and new services, and Synexus will surely accelerate its growth under this new ownership.”
Synexus, based in Manchester, England, has the largest network of clinical research sites in the world, with 28 dedicated sites and 68 affiliate sites in countries, including Bulgaria, Germany, Hungary, Poland, Romania, South Africa, Ukraine, India and the U.K. Earlier this year, Synexus acquired Texas-based Research Across America, marking the company’s entry into the U.S. and expanding its reach to over 79 million potential patients.
The private equity firm LDC announced the sale of Synexus to Jaguar Holding Company Luxembourg SARL in June, for £178m (approximately $258 million). The sale came less than 18 months after the firm acquired Synexus from U.K.-based Lyceum Capital.
PPD, a global CRO providing drug development and laboratory and lifecycle management services, said in a statement, “Jaguar Holding Company has completed a transaction for Synexus, a leading global research site group, providing patient recruitment and treatment services in support of drug research for phase II-IV clinical trials. Synexus will continue to operate under its own name as a separate business unit led by its existing management team and with no change to its business model or expansion plans.
David K. Blume, co-founder and managing director of the independent investment banking firm Edgemont Capital Partners, who follows the industry closely, said the transaction is yet another example of the ongoing consolidation trend within the clinical research landscape. “To me, this indicates an evolution toward a more symbiotic relationship between CROs and research sites,” he said. “Historically, it’s been more of an arms-length relationship.”
The catalyst for this change, Blume believes, is the difficulty faced in recruiting patients for clinical studies. “CROs partaking in a relationship with high-performing sites are going to have a strong competitive advantage going forward. Among the most acute challenges that the clinical development industry faces is subject recruitment, and no one recruits subjects more efficiently than top clinical research sites.”
Blume predicts that the path to a more integrated model between CROs and sites will lead to a “massive land grab of acquisitions” with strategic players rushing to acquire top-performing sites. This is already happening, he notes; a half a dozen sizable clinical research sites are currently on the market.
In the past, owning sites was a challenging business model because of the potential for short-term volatility in revenues. But after decades of operating independently from each other, several factors are bringing CROs and investigative sites closer to each other.
“The thinking has now changed dramatically for several reasons,” Blume explained. “By having scale, you can leverage technology and diversify across multiple therapeutic areas and geographies; you can involve both the inpatient and outpatient research business; and you can spread your risk by being more diversified, just like the CROs did when they built their businesses 20 years ago.”
Technological advances also are a factor, in light of the increasing complexity of study protocols. Technology provides the ability to link multiple research sites in distant locations, aids in the regulation of standard operating procedures across multiple sites and facilitates data collection, among other advantages, making cooperative relationships between diverse partners more feasible.
“What you see today is the top performers distancing themselves from everyone else,” Blume said. “Sites that are well-managed as professional businesses are now dramatically outperforming the smaller independent investigator sites, and that gap is widening. They are capturing a larger proportion of the overall market as a result. This, in turn, enables them to attract capital or acquisition interest, and that allows them to accelerate their growth.”
This article was reprinted from Volume 20, Issue 26, of CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »