Oracle buys Phase Forward

Acquisition expands Oracle’s solutions for the life sciences and healthcare industries

Lloyd Dunlap
REDWOOD SHORES, Calif.—Oracle has agreed to acquire Phase Forward, a leading provider of applications for life sciences companies and healthcare providers, through a cash merger for $17 per share, or approximately $685 million.

Phase Forward's software as a service-based (SaaS) Integrated Clinical Research Suite manages clinical development and safety processes from Phase I clinical trials through regulatory submission and post-approval monitoring. Adding complementary assets to Oracle Health Sciences, the combination is expected to enable researchers, clinical development professionals, physicians, regulators and patients to more effectively and securely capture, contribute, access and share data.

Speaking from the perspective of his company's ePRO product offering, which he views as non-competitive with Oracle's much broader product menu, Doug Engfer, invivodata president and CEO, offers this analysis: "This was, indeed, big news, and a complete surprise to us. Oracle and Phase did a nice job of keeping the process quiet until they were ready to speak about it. Having a company like Oracle place such a sizable 'bet' on the e-clinical space certainly makes clear that (1) e-clinical matters, and (2) Oracle is serious about this market. As a leading PRO Solutions Organization, and therefore part of that e-clinical universe, we're gratified for the attention and will be interested to see what comes next. If I were an EDC competitor to Phase (which I'm not), I'd definitely be thinking hard about how to respond to this move. Down the road, I will be intrigued to see what this means for the broader eHealth landscape, particularly EMR/EHR. Oracle rarely pursues small markets; I have to think that this move is directional in nature, and points to some future, equally interesting plays both within e-clinical and more broadly within e-health."

The acquisition of Phase Forward is consistent with Oracle's strategy to provide mission-critical applications for key industries. The combined technologies resident within the two companies are expected to result in a more comprehensive offering and better integration of clinical development with research discovery, clinical management, manufacturing, financials and sales and marketing applications.

Customers should also benefit from an increase in investment in R&D and better access and reach through Oracle's global support and services organizations. Among the expected specific benefits to customers, Oracle points to removing barriers between functional silos (drug discovery, development, clinical research, care delivery and care management); lowering the cost of drug development; supporting translational medicine to bring new therapies to patients more quickly; improving patient safety end-to-end; delivering targeted therapies and more personalized care; and supporting value-based healthcare.

As noted in a June 2009 report by IDC Health Insights, Oracle is considered to be the number one vendor for enterprise life sciences software applications with sales outdistancing its closest competitor by $60 million in the $2.95 billion market. The IDC ranking was based solely on software license revenue derived from life sciences customers, and the study examined only enterprise solutions, which included: business intelligence/analytics, clinical software, customer relationship management (CRM), content management, revenue management/enterprise resource planning (ERP), human resources (HR), manufacturing, supply chain management, product lifecycle management (PLM), research and development (R&D) informatics and R&D discovery platforms.

"The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation," says Neil de Crescenzo, senior vice president and general manager, Oracle Health Sciences. "Phase Forward brings outstanding products and employees with significant expertise to Oracle that will help enable the delivery of personalized medicine and value-based healthcare."

"Deployed in over 10,000 clinical trials, Phase Forward's software has been used successfully by hundreds of customers to accelerate innovation in drug development and patient care delivery," notes Bob Weiler, chairman, president and CEO of Phase Forward. "We look forward to combining our complementary wealth of experience with Oracle Health Sciences."

Phase Forward management and employees are expected to join Oracle as part of the Oracle Health Sciences Global Business Unit. The transaction is subject to stockholder and regulatory approval and other customary closing conditions and is expected to close in mid-2010.


Lloyd Dunlap

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