Financial terms of the transaction were not disclosed, and Quintiles said the acquisition is not expected to have a material impact on its 2013 earnings per share.
Industry insiders seem positive on the new industries Novella might be able to introduce Quintiles to.
Neal McCarthy, managing director of investment bank Fairmount Partners, told Outsourcing-Pharma.com, “Devices are great place to be – lots more work due to changes a few years ago that have geared up the regulatory hurdles, and that is substantial part of Novella business. Oncology – Novella specializes in ‘emerging’ oncology companies – Quintiles does mostly work with large companies, but this gets them into the smaller companies.”
Novella will operate as a stand-alone unit within Quintiles’ clinical development organization in most respects.
David Blume, managing director of Edgemont Capital Partners, told us, "This is a good transaction for both companies. For Novella it provides an exit at a 'strategic' valuation and a great result for its shareholders. For Quintiles it adds some reach into other parts of the market and some enhanced capabilities in select areas and is surely accretive, if not material to earnings."
Quintiles spokesman Phil Bridges reiterated the focus of Novella, telling Outsourcing-Pharma.com, “While Quintiles has supported 900+ oncology trials over the past decade, the largest percentage of Novella’s revenue comes from its dedicated oncology division that specializes in working with emerging, oncology-focused biopharmaceutical companies.”
Although Novella will keep its name, the company will “operate primarily as a stand-alone unit within Quintiles’ Clinical Development organization. Novella’s President and CEO, Richard Staub, will report directly to Paula Brown Stafford, President, Clinical Development at Quintiles,” Bridges said.
This acquisition is the latest in a string of transactions that will further consolidate the CRO (contract research organization) industry, which includes the recent merging of PRA and RPS .
Blume added, "We are clearly seeing an acceleration of the consolidation of the mid-sized CROs we predicted earlier this year and would expect it to continue. Novella is a premiere player in this tier so its not surprising to see them align with a larger player from a position of strength."
Novella is headquartered in Research Triangle Park, N.C., and has more than 800 professionals located throughout North America and Europe, including about 300 employees in the Raleigh-Durham “Triangle” area. Upon completion of this transaction, Novella will operate as a unit within Quintiles and be known as “Novella Clinical, a Quintiles company.” The transaction, which is subject to standard and customary closing conditions, is expected to close later this quarter.