Doing some corporate stock-up shopping

Seeking to fill gaps and extend reach, Quintiles acquires three companies in October and November

Jeffrey Bouley
RESEARCH TRIANGLE PARK, N.C.—Over the course of a nearlythree-week period this fall, biopharmaceutical services company Quintiles madeacquisitions to bolster three areas of its business: the Advion BioServicesdivision of Advion BioSciences to add more analytical offerings to thecompany's laboratory services; VCG & Associates/VCG BIO to help companiesgain market access as part of Quintiles' commercial group; and Outcome SciencesInc. to fill gaps in late-stage observational research for Quintiles' clinicalgroup.
 
 
While the series of acquisitions wasn't unexpected, nor arethey out of line with Quintiles' stated strategic goals—after all, the companyannounced plans to more actively partner and acquire early this year andsecured more than $2.4 billion in credit in the spring—neither were theacquisitions purposely bunched so close together.
 
"We've been pretty aggressive in looking at acquisitionsover the last year or so," Greg Connors, senior vice president of corporatedevelopment and investor relations at Quintiles, tells ddn. "It's not bydesign that these three deals happened so close together; it's hard to predictwhen closings will happen. But we have had discussions going on with all threeof them for some time now. Basically, though, we're focused on profitable,high-growth companies, we're focused on filling in gaps in our strategies andwe want to offer more services for customers and extend our market leadership."
 
Advion was the most recently announced closing of the threedeals, with Quintiles saying in its Nov. 7 news release that its ability toprovide customers with "actionable early-stage data to make better developmentdecisions faster" took "a significant step forward" with the purchase of theU.S.-based bioanalytical laboratory from its parent company, AdvionBioSciences.
 
Known as Advion Bioanalytical Labs now that it is aQuintiles company, the group provides Good Laboratory Practicepharmacokinetic/pharmacodynamic testing and other services to biopharmacompanies worldwide.
 
"Adding Advion's world-class bioanalytical testingcapabilities and expertise to our existing CAP-accredited central labs networkcreates a global one-stop solution for lab testing across the developmentspectrum," said Thomas Wollman, senior vice president of Quintiles Global Laboratories,in a prepared statement. "I believe we now have unsurpassed abilities to helpcompanies gather early-stage data and gain insights aimed at reducing the riskof failure in expensive, later-stage trials."
 
 
A few weeks earlier on Oct. 19, Quintiles announced theacquisition of Holliston, Mass.-based VCG & Associates and Cave Creek,Ariz.-based VCG BIO, the addition of which reportedly strengthens Quintiles'comprehensive commercial services in sales and brand solutions, productsolutions, product distribution and market access.
 
Quintiles notes that VCG has experience across numeroustherapeutic areas and device markets, contacts throughout the healthcareindustry, access to managed care organizations and government payers andspecial services with distribution and pricing analysis for commercial entry.
 
 
"VCG complements our solutions and capabilities within bothour commercial and consulting divisions with emerging biopharma, companieslooking to establish a commercial presence in the U.S. and drug developmentcompanies entering the commercial space for the first time," said Rich Pilnik,president of Global Commercial Solutions, which leverages the full suite ofQuintiles' sales, marketing, clinical, consulting and capital services toprovide customized commercial solutions to partners throughout thebiopharmaceutical industry—it was formerly known as Innovex and now functionssolely under the Quintiles name. "By creating virtual companies—utilizingmarket access services, proven distribution channels and reimbursementstrategies—biopharma can bring needed therapies to market faster and moreefficiently," he added in announcing that deal.
 
VCG's 25 employees will join the more than 10,000 peoplealready in Quintiles' Global Commercial Solutions group, which has operationsin 30 countries.
 
Also on Oct. 19, Quintiles announced it acquired OutcomeSciences, a privately held outcomes research firm headquartered in Cambridge,Mass., a deal Quintiles says positions it "as the industry powerhouse inlate-phase research, offering global reach, robust dedicated resources andspecialization." This acquisition is particularly important, Quintiles notes,with late-phase (Phase IIIB and Phase IV) research becoming increasinglyimportant to multiple healthcare stakeholders. 
 
Quintiles calls Outcome Sciences the "world's leadingprovider of observational research services," a statement it predicates in parton that fact that since its founding in 1998, Outcome Sciences has reportedlydesigned, developed and managed more patient registries and post-approval studiesthan any other company. Outcome's programs cover more than 40 therapeuticareas, thousands of sites and millions of patients in more than 80 countries.In addition to serving biopharmaceutical interests with its registries,post-approval research and quality improvement initiatives, Outcome'sobservational research serves other stakeholders, as well, such as medicaldevice companies, government agencies and healthcare providers.
 
"This acquisition underscores Quintiles' commitment todelivering efficient, insightful late-phase solutions to help customers showthe value of their products to patients, providers and payers," said QuintilesPresident and Chief Operating Officer John Ratliff in a prepared statement."The Phase IIIB/IV market is forecast to reach more than $4 billion by 2015, upsignificantly from 2010. We estimate that observational research accounts forabout 30 percent of that market, and Outcome is the notable leader in it. Withthis acquisition, no other biopharmaceutical services company can matchQuintiles' level of late-phase science and strategy, global reach and servicespecialization."
 
Currently, there are no plans for staffing changes orrelocations for the roughly 250 employees of Outcome Sciences.
 
Looking toward future acquisitions, Connors tells ddnthat he cannot make any specific statements about potential acquisition targetson his radar, or on specific additional gaps that Quintiles seeks to fill, buthe says there are some general objectives. For example, the company wants toextend its leadership in the scientific realm, so increased lab capabilitiesare of interest.
 
"On that clinical side of things, for example, we bought abiomarker company a few years back called Targeted Molecular Diagnostics, andthere could be more things along that line," Connors notes. "Also, we areinterested in continued geographic expansion and then on the commercial side,anything that extends our strategy of 'brand solutions' and 'market access.'"
 
 
However, that said, Connors insists that there are no hugegaps to fill, just a leadership position to solidify.
 
 
"We've filled in a lot of the basic gaps already over theyears, unlike many of our competitors," he says. "You'll see others oftentrying to build and grow by getting smaller or equal-sized versions ofthemselves. But that's not something want to spend time on as we work to offermore services to our customers and help them get drugs to patients quicker anddo it with more efficiency. We don't want to acquire companies that alreadylook like us."
 
 
Quintiles calls itself "the only fully integratedbiopharmaceutical services company offering clinical, commercial, consultingand capital solutions worldwide" and does so with a network of more than 20,000professionals in 60 countries. The company boasts some $3 billion in annualrevenue.

Jeffrey Bouley

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