Contract research outfits have been snapping up clinical trials software companies as part of a drive to beef up their IT offerings to sponsors or create new lines of business for themselves.
At United BioSource, the decision was made last year to begin working on forming a separate business venture that would be dedicated to selling clinical tech from the CRO's operating units. The CRO, which is owned by Medco, had found that its outsourcing peers were actually becoming more frequent users of its software. Bracket, the new clinical tech business, was formally launched in June.
"What we're seeing in this rapid shift in how pharmaceutical companies approach R&D problems is there's been this trend in relying on the CROs to bare the brunt of the day-to-day heavy lifting of running clinical trials," said Adam Butler, associate vice president of Bracket. "When CROs are doing that, they still need the support of these niche platforms and technology tools and software products to do this. And we often times find ourselves offering these things directly to the CROs."
Bracket is now building out its product offerings and bought Texas-based electronic patient-reported outcomes (ePRO) software firm Arrowhead in July. (United BioSource's strategy with Bracket isn't new. Parexel ($PRXL) has operated Perceptive Informatics as its clinical tech subsidiary since 2000.) Across the Atlantic, Icon decided to buy Firecrest this summer for the tech firm's trials site-monitoring tools, which have now become part of its Iconik offering. Icon can generate revenue from clinical developers using the Firecrest products, but a major factor in the buyout for the CRO was improving the timelines of its trials, according to a story in Outsourcing-pharma.com.
On the vendor side of the equation, Medidata struck a buyout deal in June that clearly indicated its interest in CRO customers. The company agreed to acquire Clinical Force, which brings the buyer a web-based clinical trial management system that has already found an audience among clinical research outfits.
Expect to see CROs' profile in the clinical software market to rise further as their share of the billions of dollars spent on clinical research grows. Frost & Sullivan forecasted this summer that global CRO revenue is expected to nearly double to $43.1 billion in 2017 from $23.6 billion expected this year, according to a San Diego-Union Tribune story. That kind of money buys a lot of IT.