CRO sector M&A activity in 2023 reflected growing pharmaceutical industry desire for contractors with broader skills, increased capacity and expanded geographic reach based on deals done to date.
Consolidation of the clinical research organization (CRO) industry continued the trend seen last year with the focus being smaller, skills and geographic reach-driven takeovers.
In January, for example, Novotech bought EastHORN, a European CRO that offers clinical, medical and regulatory services in “multiple strategically important locations across the continent.” The Australian contractor framed the deal as part of its global expansion program.
In January, TFS HealthScience acquired Appletree CI Group citing its capabilities in ophthalmology, dermatology, medical devices, and paediatric studies as well as its geographic reach as drivers.
In the same month, Huma Therapeutics snapped up Alcedis GmbH, a data driven clinical research and technology firm. Huma said it would form an advanced trials division offering digital solutions across the entire development pipeline.
Likewise in February, Avania bought Maxis a medical technology development contractor that provides pre-clinical engineering, design validation and verification, regulatory affairs, field clinical services, and trial management. Maxis has offices in San Jose, California, and Frankfurt am Main, Germany, with additional operational staff across the regions.
Also in February, FHI Clinical acquired the clinical trials business of Triclinium Clinical Development Proprietary Limited (TCD), a full-service, South Africa-based CRO.
In the same month, Reuters reported Syneos Health was making a new effort to sell itself after three years after abandoning efforts to find a buyer.
Furthermore, in May the CRO agreed to a takeover by Elliott Investment Management, Patient Square Capital and Veritas Capital in a transaction valued at approximately $7.1 billion.
Slowdown
Deal making slowed down in spring with only a handful of mergers. Of these the most notable, in March, was ClinChoice Medical Development’s purchase of Italian CRO Cromsource.
At the time, ClinChoice CEO, Ling Zhen said the deal would “expand our coverage in Europe and the US to better meet our global clients' needs and accelerate product development and support lifecycle management.”
Moreover, in May, Aixial Group announced it had fully integrated recent acquisitions Larix and Cmed Group. Similarly Aixial said the deals were motivated by the firms’ strong US and European presence and more than 1,000 employees.
Surge
As summer began, the CRO sector M&A activity increased markedly, beginning in July when Catalyst Clinical Research acquired Genpro Research, a Massachusetts-based global clinical research organization with staff in the US, India, and Ireland.
In the same month, medical device Namsa bought the Clinical Research Institute (CRI), a German full-service CRO that provides a range of services for device studies.
August saw one of the largest deals of the year. US-based private equity firm Kohlberg & Co bought Worldwide Clinical Trials in an agreement that saw previous owner TJC retain a meaningful minority equity stake.
At the time Matt Jennings, operating partner of Kohlberg, said “Worldwide Clinical Trials is positioned for long-term growth and success due to a rigorous high science-based approach to executing successful clinical trials, driven by the strength of their people across key therapeutic areas such as oncology, neuroscience, and rare disease.”
The renewed deal making pace continued through September, with US medtech services firm RQM+ acquiring German contractor CRO Kottmann to build its presence in the European Union (EU).
Later the same month Shanghai, China based Harvest Integrated Research Organization (HiRO) acquired Courante Oncology, a US full-service clinical research provider specializing in oncology product development.
Also in September, Biofortis bought analyze & realize GmbH to bolster its offering in regulatory and scientific consulting. And in the same month, Apposite Capital-backed 1MED acquired Evamed, a CRO based in northwest France also focused on the medical device market.
In October, Veristat acquired Instat Clinical Research, citing its capabilities in biometrics and the analysis of complex trial data as drivers for the deal.
Other acquisitions in the month included Finnish trial services firm Labquality Oy purchase of German CRO, Prisma, Avania takeover of Hull Associates and Ironstone Product Development and Veramed’s buyout of data management, biostatistics and medical writing company, CTDS.
In November, it was the turn of Arlington Capital Partners-backed Everest Clinical Research, which acquired Bulgaria, headquartered CRO August Research.
At the time Malcolm Little, a Partner at Arlington Capital Partners, said, “The acquisition of August is highly strategic for Everest as it further expands our global service offering and establishes a beachhead in one of the largest clinical trial markets in the world.”
And in December, the site organization, the Alliance for Multispecialty Research (AMR), acquired Affinity Health, adding a team of eight investigators to its staff and boosting its knowhow in a number of therapeutic areas.
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