Underlining the importance of integrated data management and analysis in an increasingly value-oriented healthcare market, acquisition-hungry software giant Oracle is acquiring Phase Forward, the US-based provider of data management solutions for clinical trials and drug safety, for around US$685 million in cash.

Oracle is paying US$17.00 per share for Phase Forward, a 30% premium over the latter’s closing share price on 15 April, the day before the deal was announced. Phase Forward’s shares jumped 28% on the news.

Oracle will fold Phase Forward into its Oracle Health Sciences Global Business Unit, with Phase Forward management and employees expected to come on board as part of the package. The latter’s electronic data capture (EDC) platform, as well as its interactive response technology (IRT) and clinical trial design tools, are seen as particularly useful to Oracle, which has already established a commanding presence in the eClinical space.

In March 2009 Oracle bought safety solutions provider Relsys International for an undisclosed sum, claiming it wielded “the industry’s most comprehensive suite of software applications for clinical development”.

The latest acquisition will give further weight to that claim. Over the last year or so, Phase Forward has been busy repositioning for a market shift towards ‘end-to-end’ solutions for clinical research.

That has involved branching out from its core electronic data capture business to build an integrated clinical research suite encompassing EDC, IRT, data and statistical analysis platforms, safety services and electronic patient-reported outcomes (ePRO).

Much of this transformation was achieved by buying up other companies. Last year, for example, Phase Forward mopped up Maaguzi, a US-based specialist in web-based electronic ePRO and solutions for late-phase clinical studies; the Interactive Voice & Web Response Services business of contract research organisation Covance; and Waban Software, a US supplier of platform solutions for automation and compliance in clinical data analysis and reporting.

Now it is Phase Forward’s turn, as consolidation in the eClinical sector – battered by the effects of global recession on clinical trial activity – steps up a notch. The deal with Oracle, which is subject to shareholder and regulatory approval as well as standard closing conditions, is expected to be completed by mid-2010.

Data continuum

Oracle set up its Health Sciences Global Business Unit in June 2008, with the aim of providing an all-embracing software solution for clinical trials, product safety and risk management.

The unit already offers clinical trial design, clinical study and healthcare data management, clinical and healthcare analytics, and healthcare interoperability solutions. Added to this will be Phase Forward’s software platforms for streamlining the collection, management and analysis of medical data and safety information.

Together, these capabilities address the pressing cost and efficiency issues in healthcare and drug development at a number of levels. They should enable researchers, developers, physicians, regulators and patients to “more efficiently and securely contribute, capture, access and share data from drug development through patient care”, Oracle and Phase Forward stated.

“The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation,” commented Neil de Crescenzo, senior vice president and general manager, Oracle Health Sciences.

Merging clinical data with care delivery information “is expected to better support personalised medicine, enable patient-centered innovation and better engage patients in their own care”, the two companies said. At the same time, the efficient use and re-use of clinical development and healthcare delivery data will “promote value-based healthcare, ensuring the best care for the patient”.

For Oracle, the agreement with Phase Forward is consistent with its strategy of providing “mission-critical applications for key industries”, which the company has pursued through an aggressive spate of acquisitions in other sectors.