Parexel in Medical Affairs Company buyout deal, lowers forecast

Parexel has acquired contract medical affairs services provider The Medical Affairs Company (TMAC) as it looks to bolster its outsourced healthcare specialist offering.

The deal, financial terms of which were not disclosed, sees the major CRO gain complete access to the Georgia-based TMAC and its outsourced medical affairs services to biopharma and the medical device industries.

The decade-old, 200-employee strong company works as a full-service contract medical organization and uses what are known as medical science liaisons (MSLs), as well as clinical nurse educator support services, across a host of areas from medical affairs consulting and med comms support, to direct placement services.

Parexel said in a statement: “Outsourcing medical affairs services presents a compelling option for biopharmaceutical companies as a way to reduce fixed costs. The increasingly complex nature of new products, and the need to demonstrate the therapeutic and reimbursement value of a product, is creating demand for credentialed healthcare professionals, such as MSLs, to lead clinically robust dialogues with key medical stakeholders on a peer-to-peer level.”

Though being bought out, Parexel says its new unit will work independently under its old management, although under the CRO’s umbrella.

This also comes as the company announces its Q2 results which saw its service revenue up more than 3% to $534.4 million, with backlog increased 8.4% year-over-year to $5.94 billion.

But the CRO has seen headwinds. Josef von Rickenbach, chairman and CEO, said: “Revenue growth in the quarter was relatively modest mainly due to the lingering impact of cancellations in prior periods, continuing slower backlog conversion due to increasing clinical trial complexity, and revenue delays from recent awards.

"As we expect recent strong new business awards to contribute less near-term revenue than we had anticipated, we are lowering our forecast for fiscal year 2017 revenue and diluted EPS."