EClinical provider OmniComm Systems recently acquired eResearch Technology's (ERT) electronic data capture (EDC) business in a move that OmniComm executives hope will help the Fort Lauderdale, Fla.-based company become a top-tier EDC provider.
Under the terms of the agreement with ERT, OmniComm issued 8.1 million shares of common stock and assumed certain liabilities, including deferred revenue relating to ERT's EDC business in exchange for ERT's EDC software, applications and fixed assets and $1.15 million in cash paid by ERT. OmniComm also took on 16 of ERT's 20 EDC-focused employees and plans to open a new office in New Jersey, which will house the majority of the ERT support team.
The ERT acquisition is part of a larger effort by OmniComm to acquire EDC capabilities and grow its business, said OmniCommï's chief operating officer Stephen Johnson.
"We want to build a Tier 1 company," he said. "We are in full acquisition mode; we're not done. ERT is the first acquisition, but we're looking at several others right now. We're going out there and trying to find the best technologies to fuse or integrate with our technologies to give our customers the best portfolio of products."
ERT's EDC platform provides OmniComm with additional clinical trial management system (CTMS) functionality, as well as enhanced reporting and data management system capabilities. The company plans to add these capabilities to its existing EDC software to create a version of the software that includes the best of both companies' capabilities. The ERT deal--and the fact that OmniComm can roll the two companies' capabilities into one product--is just the type of acquisition that OmniComm is looking to make, Johnson said.
"We're not looking to add complementary products, like add a safety system and add a CTMS system and add a clinical data management system to our EDC portfolio. We want to stay focused on EDC," Johnson said. "What we will do is add complementary functionality."
In addition to its complementary capabilities, ERT's EDC system was attractive to OmniComm because of its customers--most of whom license the EDC software to use on their existing trials. This is the opposite of OmniComm's customer base, which is mostly on the host services side.
"We think that the recipe for being a stable financial organization with predictable revenue streams is to have a good mix of hosted services deals and license deals," Johnson said.
Based in Philadelphia, ERT has traditionally been a provider of cardiac safety technology and plans to focus on that core business line going forward, according to a company statement.
ERT's EDC division brought in $5.9 million in revenues for the company in 2008 (ERT's total net revenues for 2008 were $133 million), and the company reported revenues of $1.4 million for its EDC division in the first quarter of 2009. OmniComm plans to see similar revenues for the EDC unit out of the gate, Johnson said, but the real payoff will occur when OmniComm releases a new version of its EDC software, incorporating ERT's capabilities.
"When we come out with the combined energies of both products, we think that we're going to grow the market share on both sides of the fence. This hybrid release that we're going to come out with in the future, we think it's going to be the industry standard," he said.