Ergomed has announced a proposed acquisition of Dutch-based PSR Group, a contract research organisation specialising in orphan drug development for a total consideration of up to €5.7 million.

The drug development firm also said that it would launch a £2.9 million placing to part-fund the deal, through the issue of around 1.7 million new ordinary shares at a price of 165p per share.

Dr Dan Weng, CEO of Ergomed, said: "This acquisition aligns with the strategy laid out at IPO of seeking to grow our existing, profitable service business both organically and through strategic acquisitions, and specifically of becoming a leader in orphan drug development.”

Dr Roger Legtenberg, CEO of PSR Group, added: “PSR welcomes the opportunity to expand its current services portfolio and geographical coverage by leveraging Ergomed’s international reach and complementary services. We will continue to make a significant contribution to the availability of new orphan drug treatments, improving the lives of patients and their families impacted by rare diseases.”

Under the terms of the agreement, Ergomed is acquiring 100 percent of the issued share capital of PSR for an initial consideration of €3.2 million (£2.8 million), with a contingent consideration based on the achievement of EBITDA targets for 2017, 2018 and 2019 of up to €2.5 million (£2.2 million).

The company added in a statement it would continue to grow PSR’s global orphan drug development business under the PSR brand and will remain focused on its two divisions – PSR Orphan Experts, which supports biotech and pharma companies with their regulatory and clinical development of orphan drugs, and PSR Pharma Resource, a niche staffing provider focused on orphan drug specialised staff.