Kendle Begins Early Stage Expansion Plans With DecisionLine Buy
In a deal worth upwards of $24 million, Cincinnati, Ohio-based contract research organization (CRO) Kendle has boosted its early stage capabilities with the acquisition of DecisionLine, a central nervous system (CNS)-focused phase I company located in Toronto.
"Phase I continues to represent a significant growth opportunity within the outsourcing drug sector. Our customers are looking for high-end scientific and therapeutic expertise to help them fully tap the potential of their molecules and make the critical decisions needed to determine the most efficient development pathway for their drug," said Simon Higginbotham, president of Kendle.
DecisionLine, formerly Ventana Clinical Research, operates a 36,000-square-foot, 82-bed facility in downtown Toronto and has a staff of about 240 scientists, nurses and clinical development personnel. DecisionLine had about $20 million in revenue in 2007 and reports it has generated an average compound annual growth rate of 60% since 2002.
“We have in recent quarters talked about Kendle’s plan to build our early phase capabilities. Phase I growth is projected to outpace the broader outsourcing market, growing at a rate of 15% annually. This is in line with the marketplace growth of our core business in phases II through IV,” stated Candace Kendle, the company’s chief executive officer.
Kendle stated that DecisionLine’s current revenue stream will result inapproximately 8% of the CRO’s early stage business in 2008.
Although Kendle does perform bioequivalence studies, Candace Kendle explained that there is a growth opportunity in first-in-man and proof-of-concept studies, due to the increased use of sophisticated tools and methodologies being used to make go/no-go decisions in clinical development.
“First of all, in the marketplace there are many more beds to meet bioequivalence needs than there are to meet the exploratory medicine needs. So, while there is a smaller demand there are much fewer providers in the exploratory medicine space. We have no intention of shrinking our bioequivalence services. We would expect it to grow...but the bigger opportunity for us is in the exploratory medicine space. We would hope to find the right balance,” she stated.
About 70% of DecisionLine’s research is in conducting trials aimed at treating CNS issues, including depression, anxiety, insomnia, sexual dysfunction, Alzheimer’s, Parkinson’s, ADHD and tobacco, alcohol and drug dependencies. The company is also a specialist in running human substance abuse liability studies and the assessment of abuse potential and risk mitigation.
The unit was founded in 1997 by its president and chief executive officer Ed Sellers, M.D., Ph.D, and the company’s senior vice president of research development and medical affairs, Myroslava Romach, M.D. Both founders will be joining Kendle in key leadership roles in its phase I organization and will report directly to Philip Davies, vice president of the CRO’s early phase operations.
In January, Kendle brought in early phase industry veteran Davies to head the global expansion of its phase I business. At the same time, Kendle’s strategic business group was off identifying acquisition candidates in the phase I area. But the company stated that it was ultimately Davies who solidified the relationship with DecisionLine founders, Sellers and Romach, and was key in closing the deal.
“This was a part of an active process on our side to identify units. DecisionLine was top on our list,” said Candace Kendle.
Kendle stated the acquisition also increased its geographic reach in Canada, including a diverse ethnic population in the Toronto region. Canada also has a very favorable regulatory environment for research, the company said.
The CRO has two existing early phase site, a 48-bed clinical pharmacology unit on the campus of the University Hospital Utrecht, in The Netherlands, and a 118 bed bioequivalence (BE) facility in Morgantown, W.Va.