The deal comes against a backdrop of reduced demand for Covance’s early development services caused by a reduction in new projects and delayed studies.
Covance has been investing in new capacity and offices around the globe, despite the economic downturn, and observers suggested the CRO giant may be taking an opportunistic view of the current market and be positioning itself for strong growth when the operating environment picks up.
By all accounts there was no shortage of suitors for SPC’s hand. Private equity firm Jina Ventures, which advised SPC on the sale of the business, said there were 14 companies involved in the bidding for the CRO.
"There were bids for SPC from several global clinical research organizations, but Covance presented the most compelling opportunity for strategic long-term growth for SPC,” commented Ron Shah, managing director of Jina.
The deal gives Covance a 10 per cent hike in Phase I/IIa capacity, from 500 to 550 beds across Europe and the US.
“Our clients' need for complex, high-science clinical pharmacology studies that can help them make decisions faster is growing," said Joe Herring, Covance chief executive.
Expertise in proof-of-concept study
The Basel site also has substantial expertise in radiolabeled and proof-of-concept studies, a wealth of experience in specialty therapeutic areas, and access to a large and active volunteer database. SPC specialises in proof-of-concept studies across a range of therapeutic categories, including central nervous system, cardiovascular rheumatology, respiratory and oncology studies, amongst others.
The Swiss CRO is working with 10 of the top 20 pharmaceutical companies, Covance said in a statement, and provides Phase I testing for pharmaceutical and biotechnology clients in Europe, the US and Asia.
SPC was seed-funded by Novartis Venture Fund in 1998, and its management includes industry veterans Dr. Rolf Pokorny and Dr. Michael Seiberling, both specialists in the field of Phase I clinical trials.
Terms of the acquisition have not been disclosed