MDS Pharma Services seems set to have new ownership

KING OF PRUSSIA, Pa.—On Feb. 10, MDS Inc. proposed new ownership for its remaining MDS Pharma Services operations, encompassing discovery through Phase IIa. As part of this, Ricerca Biosciences LLC, a provider of early-stage contract research organization services, has expressed an intention to acquire the MDS Discovery & Preclinical operations in Bothell, Wash.; Lyon, France; and Taipei, Taiwan.

In addition, a new corporation primarily owned by the private investment firms Bain Capital Ventures and SV Life Sciences intends to acquire the MDS Development & Regulatory Services consultancy team and five early stage development facilities. Two of those facilities are in Europe: Belfast, Northern Ireland and Zurich, Switzerland, and the other three are U.S.-based, in Lincoln, Neb., Neptune, N.J., and Phoenix, Ariz.

"Bain Capital Ventures and SV Life Sciences have long and successful track records of building market-leading companies in healthcare and the life sciences sector," says David Spaight, president of MDS Pharma Services. "Ricerca and the new corporation intend to provide our clients with a continuing source of the industry-leading drug discovery and early-stage development solutions they are accustomed to receiving from MDS Pharma Services. We believe the skills and quality of our people, and our state-of-the-art facilities and systems, provide a strong foundation for future growth under new ownership."

Two MDS Pharma Services locations are not part of these proposed transactions, however. One of those is the executive office in King of Prussia, Pa., which will be closed.  The other, the early clinical research and bioanalysis operations in Montreal, Quebec, will be decommissioned over the course of 2010, with total site closure planned for early 2011.

The decision to close the site was based on a plan to better align capacity with client demand in response to ongoing softness in the early stage market, Spaight says. Approximately 225 jobs will be eliminated as a result of the site closure.

Some 40 members of the Clinical Pharmacology and Development & Regulatory Services teams in Montreal are expected to become part of the new Bain Capital Ventures/SV Life Sciences-led corporation as home-based employees.

As many as 50 positions at other MDS Pharma Services locations are expected to be eliminated as a result of the sale of MDS Pharma Services, Spaight notes, adding, "We are grateful for the service of our departing colleagues, wish them well, and will support them with career transition assistance."

The two transactions are expected to close within the next two months, subject to customary approvals and closing conditions.  In the interim, Spaight says, "MDS Pharma Services will continue to focus on its commitments to clients during the transition to new ownership and the decommissioning of the Montreal site. To foster a smooth transition, my leadership team and I have committed to remain in place during the transition to new ownership."