ESPOO, Finland—In a move to expand its clinical trial capabilities, contract research organization (CRO) Encorium Group has acquired Switzerland-based Progenitor International Research, a niche provider of drug development services in emerging regions, which allows the company to expand its vaccine development services into South America, India and Asia Pacific.
The deal, announced last month, is for cash and stock valued at $2.5 million, plus earn-out consideration of cash and stock with a value of up to $2.02 million. Encorium CEO Dr. Kai Lindevall says the acquisition "provides a key advancement of our strategic goal of becoming the world's leading vaccine clinical research organization."
Vaccines have become one of the fastest-growing sectors in the life sciences industry, but the number of opportunities available to mid-sized CROs has decreased as a result of the recent consolidation in pharma, along with the increasing trend for drug sponsors to outsource substantial aspects of their development work to a single service provider.
"The environment has been changing tremendously during the last year or two years. Mergers and acquisitions have been one of the factors along with the downturn in the economy," says Lindevall. "The focus on vaccines was a strategic decision. When you are a medium-sized CRO, you need to find a niche segment for growth. Since we have been involved in vaccine clinical trials since 1998, it was quite easy for us to choose our niche area."
According to Lindevall, the companies' combined experience in the vaccine field is the most impressive among medium-sized CROs, and the potential of the combined organizations is substantial.
"Additionally, there was virtually no overlap in the key departments within the two organizations, making the integration of the two companies a straightforward process," he says. "Now the new Encorium is a mid-sized, full-service, vaccine-focused CRO with expertise throughout the emerging markets."
Established in 2005 as a niche emerging market CRO, Progenitor brings an operational footprint in seven countries: Mexico, Panama, Argentina, Chile, Switzerland, India and Hong Kong.
"A combination of the European ownership, the Swiss headquarters—assuring European quality and operational standards—and the experience in vaccine clinical trials, made Progenitor a perfect fit for the new Encorium's focus as the leading vaccine clinical research organization," Lindevall says. "From these affiliates, we are able to provide services in an additional 10 countries throughout Latin America and Asia. Such expanded geography is important for the conduction of vaccine trials, which is a core focus of our steps forward as the next-generation CRO."
The new affiliates will stay in their current facilities, and all employees will be retained. Encorium and Progenitor will consolidate their branding under the Encorium name.
Progenitor President and CEO Renee E. Moore says the strategic combination of the teams at the two companies "is an exciting step in the creation of a vaccine-focused CRO that can meet clients' needs internationally."
Progenitor, which has conducted more than 20 vaccine trials in emerging regions, will not only strengthen Encorium's vaccine expertise. Together, the organizations have been involved in more than 70 vaccine and infectious-disease trials, with more than 50,000 patients recruited in recent years.
Lindevall hints that the Progenitor acquisition isn't necessarily a one-off deal for Encorium: "We are constantly looking for new acquisition objects that would further strengthen our capabilities as the leading emerging market and vaccine CRO," he says.
