Oracle is preparing to swallow Phase Forward in a deal expected to close mid-year. The enterprise software giant, already well entrenched in clinical circles via the continuing build-out of e-clinical applications to its enterprise database platform, will be extending its vertical appeal via Phase Forward's integrated data capture and management solutions.
A big plus for Oracle is Phase Forward's use of the software as a service model. SaaS opens a market for Oracle by placing e-clinical solutions within the reach of the smaller biotechs likely unable to afford traditional Oracle offerings, says Ruchi Mallya, pharmaceutical technology analyst at Datamonitor unit Ovum Health Care Life Sciences, in a phone interview.
Both Oracle and Phase Forward are standards-minded organizations, Mallya says. Both are members of the Clinical Data Interchange Standards Consortium and serve with other standards bodies. Another plus for Oracle is that Phase Forward straddles the regulatory fence, providing solutions for both drug developers--in their management of trial and safety data for preparing regulatory submissions--and for the FDA, via solutions for managing the submissions data it receives. Mallya notes that both companies have "great relationships with the FDA."
In the big-fish-eats-little-fish model (not that Phase Forward is any little fish), Oracle's closing of its choppers on the Waltham, MA, company follows a similar meal pattern: The West Coast software maker has spent in excess of $40 billion consuming more than 60 companies since January 2005, according to Cross Research analyst Richard Williams, in BusinessWeek. About a year ago, for example, Oracle picked up Relsys, a maker of drug safety and risk-management applications.
Phase Forward has also played the big-fish role, with recent acquisitions including Waban Software, a maker of solutions for clinical data analysis and reporting, and Covance's interactive voice and web response services business.
The current deal is big news in clinical trial IT circles, as well as life sciences and healthcare IT, currently front of mind for Oracle. And it's a bit of a surprise. "Phase Forward is a tier 1 e-clinical solutions provider," says Mallya, who thought the acquiree may not have been willing to accept a buyout because it's been performing so well.
She says another surprising aspect in Oracle's choice of Phase Forward is the latter's complement of drug safety solutions, an apparent overlap with capabilities gained in the Relsys acquisition. "I thought they would focus more on an e-clinical provider," she says.
Oracle is said to be paying about a 30 percent premium for Phase Forward, $685 million or $17 per share.
- see the BusinessWeek article
- here's the announcement