US biopharmaceutical services company Parexel International has paid around $50.9 million for Taiwan-based Apex International Clinical Research Co, Ltd, a privately held contract research organisation (CRO) in which Parexel has held a minority stake since April 2003.
The acquisition will bolster Parexel’s global capabilities with a wide range of clinical research services offered throughout the Asia-Pacific region, the US company said. Apex’s business spans mainland China, Hong Kong, India, Taiwan, Singapore, Indonesia, South Korea, Malaysia, Thailand, the Philippines, New Zealand, and Australia. Key competences include:
- Good Clinical Practice-compliant services, especially in the late phases of clinical development, in 11 Asia-Pacific countries including China;
- clinical and regulatory experts with local experience;
- medical expertise and access to patient populations across a wide range of therapeutic areas, including cardiology, rheumatology, endocrinology, oncology, infectious disease and neurology.
“The Asia-Pacific region is becoming increasingly important and attractive for a wide range of clinical development activities,” commented Josef von Rickenbach, Parexel’s chairman and chief executive officer.
Among the factors driving client demand for clinical research services in the region were established and sophisticated healthcare systems in a number of countries, the availability of highly trained professionals, and attractive end markets for biopharmaceuticals, he noted. Combined with Parexel’s existing presence in Japan, India and Australia, the Apex deal would make for “a formidable competitor and one of the leading providers of biopharmaceutical services in the Asia-Pacific region”.
The US company’s wholly owned subsidiary Parexel (Taiwan), Inc launched a tender offer on 29 June 2007 to purchase all of the issued and outstanding shares of Apex common stock. This offer closed on 7 September, with Parexel acquiring 20.3 million shares of Apex common stock, amounting to 93.9% of the latter’s total issued and outstanding shares. The purchase price was 82.94 new Taiwan dollars (NT $) or around US$2.51 for each Apex share of common stock tendered, giving a total acquisition price of roughly NT $1.7 billion. The resulting company is called Parexel Apex International.
Parexel acquired its minority interest in Apex after conducting “a considerable amount of due diligence to ensure that the company’s programmes and standards met Parexel’s rigorous quality guidelines” it pointed out. Apex had established “a strong track record of success, carrying out numerous clinical studies with Parexel”.
In conjunction with the acquisition, the US company has updated its financial guidance for the first quarter of fiscal year 2008 (ending 30 September 2007) and the full year. Consolidated service revenues for the first quarter are now projected at US$203-US$210 million, compared with the US$200-US$210 forecast previously.
Guidance for consolidated service revenues in fiscal year 2008 has been raised from US$855-US$885 million to US$875-US$910 million. Apex is expected to contribute service revenues of around US$1 million in the first quarter and between US$14 million and US$17 million in the full year.