Contract research organisation Covance has completed the purchase of eight clinical development sites from fellow US company Radiant Research, giving it a significant hike in its clinical pharmacology bed capacity.
Radiant, which specialises in conducting trials of biologic drugs, has booked about $65 million in the transaction, which was first announced back in April.
Radiant Research provides study conduct and drug development services to the biopharmaceutical industry. The eight centres acquired by Covance specialise in Phase I/IIa clinical pharmacology trials. Radiant's remaining 30 centres conduct later-stage, Phase IIb-IV studies.
Covance said the acquisition would help it meet its clients' increasing demands for ‘high-science, first-in-human clinical trial services’, which are estimated to account for around 8% of the total outsourced clinical research market. Estimates for the overall size of the market vary – one market researcher valued it at $15 billion in 2005.
The eight sites, which currently generate approximately $25 million in annual revenue, are located in Texas, Idaho, Floria, Oregon, California and Hawaii. Each site addresses special patient populations for both Phase I and IIa studies. For example, the Honolulu clinic has access to patients that are used for Japanese bridging studies.
The addition of the sites brings Covance's total global Phase I/IIa clinical research capacity to more than 500 beds across 11 sites.
Phase I studies are one of the key growth areas in the CRO sector, mainly because of an increase in the number of product candidates in preclinical development – a pay-off from the biotech and pharma industries’ investments in high-throughput drug and target discovery technologies in recent years, as well as advances in screening and combinatorial chemistry.
For example, its is estimated that there were around 3,600 drug candidates in preclinical development in 2002, but this climbed to around 4,200 in 2004 – a 17% increase – and should rise an additional 17% to reach around 4,900 in 2007, according to figures compiled by Covance rival Kendle.
There is also good news for Covance’s laboratory testing division, which has just won a $187 million contract for contract toxicology services, carried out at a dedicated space in its facilities.
The deal will add approximately $150 million to the company's second quarter backlog, the majority of which will be converted to revenue between 2009 and 2013.
- Meanwhile, Radiant Research said it has promoted Pamela Spaniac to president. She previously served as chief financial officer and chief operating officer at the company, which is approaching $100 million in revenue.
