Bracket, a division of United BioSource Corp. (UBC) established just last month, has made its first acquisition: Arrowhead Electronic Healthcare, a privately-held, Austin, Texas-based electronic patient-reported outcome (ePRO) technologies company. The terms were not disclosed.

Adam Butler, Bracket’s associate vice president of client services, said UBC and Arrowhead have partnered on and off for trials over the last five years.

“They have developed some really excellent software and tools across a variety of technologies, including smart phones, tablets and PDAs,” said Butler. “There are a lot of integration opportunities with our existing tools.”

Bracket was formed when Bethesda, Md.-based UBC, owned by pharmacy benefits manager Medco Health Solutions, decided to cordon off two of its service areas and rename them. Bracket includes the former UBC Clinical Technologies and UBC Specialty Clinical Services divisions. Bracket’s target market is CROs in need of outsourcing services such as IVR/IWR, ePro, virtual investigator meetings, site verification services, rater and CRA training, data quality and surveillance and endpoint administration services. And possibly as part of one platform.

“We’re headed for a broad platform of data collection tools that will be available for use in all sorts of clinical trials, no matter what the specific needs are,” said Butler.

Butler said the Arrowhead buy is the first significant acquisition in the ePRO market, and he expects it to trigger more such deals.

“ePRO is growing rapidly, and there has been little to no M&A activity in the space,” he said. “We expect this to change, and an acquisition of an ePRO vendor is likely to trigger lots of positive conversations about growth in this sector.”

Arrowhead is 10 years old and has 24 employees. The company’s ePRO-LOG software platform is used in more than 60 countries on smart phones, tablet computers, the Web and text-messaging applications. Arrowhead will remain in Austin, said Butler, adding that its offerings are very agile.

“Their questionnaires and patient-reported outcomes are very configurable, so you can make a change to a question and deploy it out to patients very easily on multiple platforms in a few days,” he said. “Other systems require a much more complicated process, and it takes weeks to months to deploy out to patients.”

Use of ePRO is expected to rise from 14% of all trials now to about 22% of trials in 2012, said Butler.

UBC was formed in 2003, and in 2010 was bought by Medco Health Solutions, the largest pharmacy benefits manager in the U.S. Since its inception, said Butler, UBC has expanded via acquisitions and organic growth. That is expected to continue, with more acquisitions likely to be announced before year end.

Suz Redfearn