M&A activity may have slowed in the CRO space in 2022, but the deals that did take place suggest contractor see expanded reach and capabilities in emerging therapeutic modalities as the keys to growth.
Last year was a period of consolidation for the clinical services space. There were 50 major CRO mergers with Thermo Fisher Scientific’s $17.4 billion takeover of PPD and Icon’s $12 billion acquisition of PRA being the obvious examples.
This year, in contrast, has been dominated by less valuable, less high-profile acquisitions with small and mid-sized contractors doing the majority of the deal making.
Site organization expansion has been a major theme with several companies buying clinical research locations to add capacity.
In January, for example, trial site organization Flourish Research added two more clinical research facilities - Great Lakes Clinical Trials and Clinical Site Partners - to its network.
Another site-focused merger took place in June when Evolution Research Group bought Ohio Clinical Trials (OCT) to add a 64-bed Phase I unit in Columbus to its network.
And in November Velocity Clinical Research acquired UK-based site network, Egin Research. The deal followed a few months after Velocity bought German study trial site organization, Clinical Research Hamburg.
The growth of the advanced therapy industry also prompted a number of takeovers in the contracting space, with various CROs citing a desire to cater for demand from the cell and gene therapy sector as a driver for deals.
In January, for example, North Carolina-based CATO SMS and UK-headquartered Pharm-Olam merged to target “the growing number of small and mid-sized companies developing complex therapies.” The combined firm rebranded as Allucent in May.
In February KCAS bought FlowMetric, a specialist cytometry and assay services provider. Kansas City-based KCAS cited growing demand from the cell and gene therapy sector as the motivation for the deal. The deal followed less than a year after KCAS was acquired Vitruvian Partners.
And in September KCAS acquired France-based assay development and lab services firm, Active Biomarkers.
Similarly, drug industry demand trial services for oncology and rare diseases also prompted takeovers. For instance, in February, AI and precision-focused Tempus acquired oncology-focused trials contractor, Highline Sciences.
Likewise in March Veristat bought contractor SFL (Solutions for Life Sciences) to add capabilities in orphan diseases and oncology as well as artificial intelligence (AI), devices and diagnostics to its offering.
Also in March Emmes acquired Casimir, a US-based rare disease focused CRO.
There was also an uptick in ophthalmology related M&A activity in 2022. For example, in July QHP Capital, the management company for NovaQuest Private Equity, acquired ophthalmology CRO Lexitas Pharma Services.
And in September Emmes acquired Clinical Edge, a firm that trains and certifies visual function examiners at investigator sites conducting Phase I to IV ophthalmic clinical trials.
As ever, several organizations cited a desire to expand geographic reach as the motivation for a deal.
For example when Catalyst Clinical Research acquired Aptus Clinical in May it said it wanted to grow on both sides of the Atlantic. Likewise when Novotech bought South Carolina-based NCGS it said one of the drivers for the deal was increasing its access to the US market.
Alira Health bought full service CRO Sourcia citing its presence in the Netherlands, Germany, and Austria as key.
Also, when Optimapharm acquired Qualitis it said the latter’s presence in Southern Europe was the driver for the deal. Similarly when Avance Clinical bought C3 Research Associates in September it said the aim was to expand its business into the US.
In addition, in October Argenta bought Spain-based clinical development firm Ondax Scientific in a move designed to expand its geographic reach in Southern and Western Europe.
Several CROs also made acquisitions to bolster their analytical capabilities in 2022. In May, for example, Alliance Pharma bought UK-based DDS, the bioanalytical business unit of LGC. The same month biomarker and bioanalysis focused Synexa Life Sciences bought Finland-based bioanalysis CRO Syrinx Bioanalytics.
A few months later dermatology CRO Innovaderm expanded its biometrics capacity through the acquisition of Excelsus Statistics. In August spatial biology and biomarker analysis firm Flagship Biosciences bought Interpace Pharma Solutions, a provider of cytogenetic, molecular pathology and genomic profiling solutions.
And in October NAMSA acquired Perfectus Biomed Group, a UK lab microbiological services lab.
Patient centricity and regulations
Patient centricity also prompted acquisitions. For instance, CSAM Health Group acquired patient-data tech provider Carmona. The move followed the former’s takeover of health analytics software developer MedSciNet in 2021.
Similarly in February CenExel Clinical Research acquired CTSdatabase, a tech firm focused on detecting trial subjects who are participating in multiple studies.
Several CROs also made deals to enhance their regulatory expertise in 2022. For example, In February, PharmaLex Group merged with Phlexglobal to add clinical and regulatory services capabilities to its trial management and training offering. Also, in February Ergomed spent £25 million on the Adamas Consulting Group.
In mid-March, ProPharma Group bought clinical and regulatory diagnostics firm M Squared Associates. In August, the firm acquired OneSource Regulatory to expand its range of consultancy services.
In May, Neuca Group subsidiary Clinscience bought a 51% holding in clinical data and regulatory services firm, Agati Systems.
And in September ProPharma acquired Kateric, a medical writing and clinical trials disclosure support services firm.
Devices and diagnostics
Other CROs used their M&A budgets to add capabilities in diagnostics and medical devices. For example, In February, Cerba Research merged with Viroclinics-DDL, a virology and immunology CRO. The deal followed the latter’s acquisition by parent company, Cerba Healthcare.
Meanwhile in March NAMSA acquired Madrid, Spain-based medical device CRO AKRN Scientific Consulting.
And Device CRO MCRA bought Japan-based medtech consulting firm Vorpal Technologies K.K.