Warburg Pincus to buy RPS

By Gareth Macdonald

- Last updated on GMT

Related tags: Private equity

CRO ReSearch Pharmaceutical Services (RPS) says acquisition buy private equity group Warburg Pincus will provide “financial strength” for future geographic expansion.

The takeover agreement, which values the US contract research organisation at $227.3m or $6.10 per share, was announced last month and is expected to complete at the end of February.

RPS CEO Daniel Perlman said that decision to sell meets with the firm’s aim of “fortifying our financial structure and industry expertise to successfully execute our model and continue to expand our capabilities​.”

The firm also told the domain-b website that: “It intends to continue advancing its current strategy under the leadership of its existing management team [and] will look for opportunities to accelerate its growth through the development of enhanced service offerings and expanded international capabilities​.”

So what does Warburg get for its money? Well for the three months ended September revenue generated by RPS’ range of Phase I to IV clinical trial services business generated some $68.5m, an increase of 32.5 per cent.

Income for the period also increased, although higher direct costs and selling, general and administrative expenses meant that earnings grew a more modest $2.4m on the year-earlier comparable period to $5.6m.

In a press statement Warburg Pincus MD Jonathan Leff commended RPS’ business plan, commenting that: “The company’s unique integrated outsourcing models has attracted many of the world’s leading pharmaceutical and biotechnology companies as customers​.”

He went on to say that: “We are delighted to partner with Dan Perlman and the management team at RPS​.”

Inspire’s CF drug fails at Ph III

In other financial news, Inspire Pharmaceuticals, in which Warburg holds 22.9m share, suffered in the markets after a candidate cystic firbrosis treatment it is developing failed to meet its Ph III endpoints.

According to a report in the Triangle Business Journal the announcement saw Inspires’ price fall some 60 per cent on Monday, which cut the value of Warburg’s holding in the company to $110m from $190m the previous week.

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