Clinical Researcher—October 2023 (Volume 37, Issue 5)
PRESCRIPTIONS FOR BUSINESS
Mergers and acquisitions are part and parcel of doing business in today’s clinical research enterprise, and when you’ve been involved in more than 20 acquisitions totaling more than 80 clinical trial sites since December 2017, you certainly learn a few things along the way.
You learn how to identify high-performing people and organizations, how to bring out the best in them as they join your organization, and how to improve the patient experience in clinical trials—endeavoring to shorten the timeline for vital drugs and treatments to become available to those who need them the most.
At Velocity, we’ve been fortunate to build upon our core business and set of processes to expand our therapeutic expertise. We have done this by making site acquisitions across multiple U.S. states and countries, over the past few years.
As you may imagine, it’s not always been a smooth ride, navigating the acquisition and fusion of disparate cultures, specialties, and other variables. But it’s exactly that hybrid vigor we seek when looking for new organizations and professionals to integrate into our corporate family. Just as the science of clinical trials benefits from patient diversity, so does the workforce and the broader industry.
In addition to my own reflections, I’ve culled some best practices and insights from team members who shared their perspectives about the best ways to successfully acquire a new entity.
It Begins and Ends with People
I’m going to focus on five key areas, but the human element of any acquisition cannot be underestimated. I’d argue that if you successfully mesh cultures, the other issues can become somewhat secondary. Conversely, I’d suggest that if you fail to mesh cultures effectively, you begin the process at a significant, if not terminal, disadvantage.
With that in mind, here are the five top considerations for acquiring and integrating clinical sites that we would like to share based on lessons learned—sometimes the hard way—before, during, and after the acquisition process. For better or worse, an acquisition is a marriage of sorts and compatibility is vital to its success.
Cultural Fit: Assess the cultural fit of the organization and its people. Are they open to new ideas and approaches? As the organization doing the acquiring, we have a clear vision and clear way of doing things operationally, and we adopt a fully integrated network model. While we’re open to learning new and better ways to achieve something, we also know our model has worked well and is worth emulating. We aren’t looking for franchises where we simply put up our logo over the previous company’s name, rather, we are looking for partnerships where acquisition targets buy into our model. Our model is designed to provide sponsors and contract research organizations (CROs) with what they need—streamlined clinical processes, assurances on data quality, and quick start-up times. Our sites are fully integrated via a centralized infrastructure and common technology backbone, including centralized budgets and contracts, business development, standard operating procedures (SOPs), and a robust operational oversight team. This streamlined approach allows for superior patient enrolment and consistent, high-quality data delivery. As a result, CROs and biopharma companies can benefit from simplified access to international clinical research. Potential site acquisitions need to align and buy into this operating model for everyone involved to call the relationship a success.
Company Reputation: Find out what others think about the site being considered for acquisition. Assess the quality of the site and its reputation in the industry. You can begin to paint this important picture in a number of ways, including reviewing their audit history with the U.S. Food and Drug Administration (FDA), site SOPs, and other work instructions. Gather anecdotal evidence from sponsors, CROs, or individuals within your company who know of, or have worked with the site. You’d be surprised how much valuable information you can learn from these activities. In some cases, the information can help make for a better transition during the acquisition. In some cases, you may decide the target is not the right match for your organization.
Site Growth Potential: In the research industry, sites are valued based upon a multiple applied to the net profitability generated by the site. There is a correlation between the multiple paid and the level of earnings and the industry generally pays more for a site with higher earnings. The multiple paid incorporates future growth assumptions. How is the site going to grow in the future to justify the multiple purchase price? Is the site able to expand therapeutically? These types of questions need to be considered to ensure you are spending your funds wisely.
Therapeutic Fit: Do the site’s therapeutic capabilities fit into your strategic growth objectives? Is there a willingness to expand therapeutic capabilities or is the site set upon focusing in one area? A site that focuses on a narrow therapeutic area will inevitably suffer the consequences of the ebbs and flows in industry pipeline. We are looking for sites that have the interest in or capability to expand their areas of expertise. For example, we recently closed on exciting acquisitions of the Impact Research Institute in Waco, Texas and the Liver Institute in Seattle, Wash. Adding these sites to our team will allow us to expand our research work in the area of fatty liver disease and metabolic dysfunction-associated steatohepatitis (MASH).
Access to Patient Population. Discern the quality of the site’s patient database and its access to minority and at-risk patient populations. Does the patient database include minority patients who have either participated or shown interest in a research study? Given the FDA’s industry guidance requiring the enrollment of minority study participants, the evaluation of the site’s patient catchment area is an important factor to consider. Look to see if the site is located in an area that helps to facilitate the enrollment of minority patients and if the patient database is fully representative of the demographics of the region. Often clinical research sites are in predominantly white and affluent areas, which creates a barrier in the participation of some minority patients. Moving sites closer to diverse communities makes clinical research more accessible for people who are interested in taking part. Removing long travel burdens and reducing the need for time taken off work to participate in a study could also result in paying smaller stipends for sponsors.
Worth the Effort
There’s something uniquely exciting and rewarding about finding new organizations to work and grow with to advance the conduct of clinical trials. It isn’t always easy finding the right partners and acquisition targets, but hopefully these ideas will help you and your organization as you consider your own future growth opportunities. I can assure you it is worth the effort.
I believe our acquisition efforts have been successful in large part because we’ve made such a concerted effort to address, respect, and mesh cultures. In addition, our centralized structure helps streamline some operations for our new partners, while we also empower them to put even more energy into the effective patient care and recruitment efforts that have already served them so well—and made them people we wanted to work with in the first place.
Patients deserve our best. By exploring new ideas and new ways of working together, we can deliver our strongest and most effective results to ensure patient safety and promote an even higher level of care fueled by new, exciting, and innovative drugs, devices, and treatments.
Paul Evans is President and CEO at Velocity Clinical Research and a former Chair of the Association Board of Trustees for ACRP.