Vyteris wants out of delivery tech biz and into CRO sector
The plan, which will see New Jersey, US-headquartered Vyteris seek a buyer for its adhesive, patch-based technology platform, follows just months after it entered the contracting sector with the acquisition of CRO MediSync BioSrervices.
MediSync’s business plan, in addition to the provision of clinical trial, site and data management services, is to buy smaller CRO and site management organisations (SMOs) in the field of dermatology.
Evidently this is a strategy that Vyteris is very keen to take forward, given that it has already identified ‘multiple’ CRO takeover targets it plans to pursue over the next two years.
Vyteris CEO Haro Hartounian said that: “With more than 1,100 CROs worldwide, we believe this industry is ripe for consolidation.
“Our plan is to acquire small, private CROs with successful track records that lack the capital raising power, business development resources and scale to compete with large CROs.
Market motivation
Dr Hartounian’s observation is in step with the wave of consolidation in the research sector at the moment, with Clinipace’s planned purchase of PFC and inVentiv Health’s move for Pharmanet being just the most recent examples.
The belief that the CRO space represents a good investment opportunity also fits with moves made by a number of private equity groups of late.
However, while recognition of these trends was undoubtedly a motivation, Vyteris’ decision to refocus as a CRO also reflects the difficulties it has had with its delivery technology business.
Prior to the MediSync deal Vyteris core business was its low-level electrical energy (iontopheresis) delivery technology, which despite some regulatory progress, has never generated a profit.
Additionally, according to a prior SEC filing, on March 31, 2011, Vyteris had significant cash flow problems with just $100,000 in the bank and a capital deficit of $12m.
At the time Vyteris said: “There is substantial doubt about our ability to continue as a going concern.”
