CROs further consolidate: Icon scoops up Aptiv for $144M

31-Mar-2014 - Last updated on 01-Apr-2014 at 07:46 GMT

Ireland-based CRO Icon has agreed, subject to certain closing conditions, to acquire Aptiv Solutions for $143.5m in cash to further expand its adaptive trial offerings.

Virginia-based Aptiv, which is owned by The Halifax Group, SV Life Sciences, Comvest Partners and Management, will position Icon in the market of adaptive trials. Aptiv’s proprietary software supports the design, simulation and analysis of adaptive trials and is used by the US FDA, EMA and Japan’s PMDA, as well as over 50 top pharma and medical device companies and academic researchers.

The acquisition of Aptiv will also further position Icon in the Asian market as Aptiv owns Niphix, a full-service, oncology-focused CRO serving both Japanese and international customers and this will be combined with Icon’s current operations in Tokyo and Osaka.

In addition, Aptiv has experience in the management of medical device trials, leveraging its adaptive capabilities and regulatory expertise to expedite the development of a wide range of medical devices.

Analysts seem upbeat on the deal, as well. Ross Muken, analyst at ISI, said in a note to investors: “We are positive on today's deal as Aptiv adds to Icon's software, and IT capabilities, an area management noted that was of particular interest.”

The acquisition is also in-line with the company's stated capital deployment plans, which are focused on between two and three “bolt-on acquisitions per year as well some share repurchases,” Muken said. He added that ISI is “increasingly confident in [Icon's] ability to execute on its strategy and create shareholder value, we reiterate our Strong Buy rating.”

The acquisition comes as CROs are predicting an upturn in demand for adaptive clinical trials, Aptiv previously told us.

Since 2008, Icon has invested about $300m on acquisitions to boost its scale and capabilities. Last year, the company acquired the clinical trials division of Cross Country Healthcare for $52m, and in 2012, Icon acquired a Chinese CRO focused on consulting.

Commenting on the recent acquisition, Nuala Murphy, president of Icon Clinical Research Services, said: “Aptiv Solutions’ adaptive trial capabilities will further differentiate and enhance our services to help our customers identify the most promising drug candidates earlier. Their presence in Japan will also broaden our existing capabilities in this market.”

Pat Donnelly, Chairman and CEO of Aptiv Solutions, added: “Our unique technology and expertise in integrated design and execution of adaptive trials, our strength in medical device development and our strong position in oncology in Japan are key areas of differentiation.”