CROs with global aspirations

Synteract and Harrison Clinical Research close M&A deal to form multinational CRO

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SAN DIEGO—Seeking to provide "top-tier internationalcapabilities" to clients, Synteract, a full-service contract researchorganization (CRO), completed its acquisition of Harrison Clinical Research(HCR) on March 1, forming a new multinational CRO called SynteractHCR in theprocess.
The newly combined company will be headquartered in SanDiego County, with Wendel Barr to lead the new SynteractHCR as CEO, just as hedid with Synteract. Dr. Francisco Harrison, formerly HCR's chairman andfounder, will remain a senior member of the executive team and become a memberof the combined company's board of directors. Stewart Bieler, formerlySynteract's chief operating officer, becomes president of U.S. operations, andformer HCR CEO Benedikt van Nieuwenhove becomes president of Europeanoperations for SynteractHCR.
Synteract was already a California-based CRO before theacquisition of and merger with HCR, and a portfolio company of SanFrancisco-based Gryphon Investors, with offices in North Carolina and the CzechRepublic as well. In that capacity, Synteract has offered clinical expertise inmultiple therapeutic areas since 1995, including a strong emphasis in oncology,central nervous system, cardiovascular, respiratory and ophthalmology. HCR,founded in 1987, was headquartered in Munich, Germany, with operations inEurope, Israel and South America, in addition to a U.S. office in Princeton,N.J.
Separately, the two organizations provided Phase I-IVservices, but by joining forces, Barr notes, the two companies can now offerclinical trial support to biopharma clients around the world—Barr's goal, infact, is ideally for SynteractHCR to become a one-stop shop for emerging andmid-size biotechs, offering services from discovery to post-marketing andspreading its resources to industry hubs around the world. The combination ofthe two companies is also expected to allow the new entity to better supportlarge, later-phase programs.
Although the two companies had never worked togetherbefore—in fact, they also had little overlap in clients—Barr says the synergywas obvious from the first meeting.
"Not only were we a strong fit culturally, with long-termemployees who truly cared about the customers, but we offered complementaryadvantages to each other that both organizations had been looking for," Barrtells ddn, "including a non-overlappinggeographic footprint, strong talent, brand recognition in our respectivemarkets and an excellent depth of therapeutic expertise."
Barr says he expects no disruption in any ongoing projects,because the company is keeping the study leads as they were, although projectteams may expand and gain depth of resources with people who have had deepexperience in a particular therapeutic indication.
"We also think our clients will benefit from our expandedfootprint, so that we will be able to more quickly enroll patients in theirtrials, and will be able to offer our own organization and processes inadditional locations," he adds. "We have put together strong integration teamswith members of both organizations, and have also been working with the BostonConsulting Group to make sure we are doing this efficiently and effectively."
In addition, the company should very soon be able to offerinformation technology efficiencies by using common operating systems and ITplatforms that will streamline operations, Barr notes.
"Most important, we think that our clients will trulyappreciate the continuum of service we can offer now that allows us to workwith clients throughout their entire development lifecycle, from emergingproducts through post-marketing," Barr concludes.
The process for the acquisition started with a reevaluationof Synteract's strategic plan in fall of 2011, mere months after Barr took thereins as CEO, having previously served as chief operating officer and executivevice president at Covance.
"The company's previous efforts to expand in Europeconsisted of putting an office in the Czech Republic and looking to accesspatient populations in Eastern Europe to support U.S.-based clients," Barrexplains. "Our objectives changed in that we wanted access to the total Europeanmarket. To accomplish that, we needed to be in key Western European countrieslike Germany, France and the United Kingdom."
Working with Fairmount Partners, he said, Synteractidentified a list of between 40 and 50 prospects, which were then pared down to10. Following that, Synteract visited the top six on the list. HarrisonClinical Research, which Synteract visited in the middle of last year, was onthat short list.
The combined company will have offices in 16 countries withoperations in Western and Eastern Europe, Israel and South America, as well asthe United States, where in addition to the San Diego office, it will continueto have two offices on the East Coast—Research Triangle Park, N.C., andPrinceton, N.J., "reflecting coverage of three important biopharmaceuticalhubs" in the United States, as the company noted in the news release about themerger.

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