Back in April Parexel agreed to pay 135 pence in cash for each ClinPhone share, valuing the eClinical firm at £91m ( $182m), and has arranged a $300m facility with JPMorgan Chase Bank and Keybank National Association in order to fund the acquisition and cover related costs, as well as to refinance the existing debt of the two firms.
ClinPhone reported revenues of a little under £50m and operating profit of around £3m for the year ended February 29. Parexel expects the deal to be dilutive to earnings in the financial year ending June 30, 2009.
In buying ClinPhone, Parexel is looking to build upon its own technology division, Perceptive Informatics, which includes medical imaging, clinical trial management systems (CTMS), interactive voice response systems (IVRS & IWRS) and services as well as other eClinical tools.
ClinPhone offers a range of software an services for sponsors conducting Phase I to IV clinical trials, and has particular expertise in the area of electronic data capture (EDC).
In its prospectus for the ClinPhone bid, Parexel made much of the advantages of "having an in-house EDC capability" that would enables it "to standardise its clinical trial processes on a common platform, integrate this platform with ... existing technologies, and consequently bring efficiencies that can reduce the cost of delivery to its customers as well as accelerate trial close."
Thomson CenterWatch's recent 2007 Survey of Investigative Sites in the US, identified EDC technologies as the number one area of potential for best preventing future delays in clinical trials. Meanwhile, analysts have estimated that 20 per cent of clinical studies around the globe are now being conducted using EDC and predict a complete transition from paper based systems within a decade.
Aside from its EDC expertise, ClinPhone has a CTMS - TrialWorks - that Parexel maintains is targeted at smaller companies and sits well alongside its own IMPACT offering that is geared towards larger organisations. TrialWorks is likely "to remain as an independent product targeting this market segment," according to Parexel.
ClinPhone also has capabilities in IVR that are compatible with IMPACT and will add "additional capabilities to help complete the eClinical suite."
For its part, Quintiles said that it had decided to focus on developing its own in-house clinical technologies when announcing it was dropping out of the running for ClinPhone earlier this month.
The positive vote does not mean a clear run for Parexel, however, as the deal is also subject to legal clearances. The UK Office of Fair Trading has asked for comments on the proposed sale, with a deadline of July 21, but had not issued an update by the time this article went to press.