Preclinical consolidation: MSI firm Protea buys CRO vivoPharm

07-Apr-2015 - Last updated on 11-Jan-2024 at 16:21 GMT

Protea set acquire CRO vivoPharm for $11m

Molecular imaging company Protea Biosciences has acquired CRO vivoPharm in the latest instance of consolidation in the preclinical sector.

vivoPharm offers drug developers pharmacology, toxicology and bioanalytical services, but after entering an $11m (€10m) share purchase agreement at the start of the month, the contract research organisation (CRO) is set to operate as a subsidiary of molecular profiling company Protea Biosciences Group.

While Protea will identify operational synergies between the two preclinical service companies, Ralph Brandt - founder and CEO of vivoPharm – told Outsourcing-Pharma.com this will not lead to a reduction in staff numbers or the closure of vivoPharm facilities in Melbourne, Australia and Hershey, Pennsylvania, but instead will lead to further growth opportunities.

“The new service offering will increase demand and therefore we project significant growth of the merged company and a growing number of jobs,” he said.

“Combining mass spectrometry imaging (MSI) with world class orthotopic tumour models is a game changer towards more specific identification of drug localization and drug targeting,” he continued, adding this can help accelerate drug development while also reducing customer costs due to a more stringent decision making process.

“The combination of the both companies creates quality level of service synergies not known yet within the Pharma and biotech community.”

Both companies serve a similar customer base with some customers shared between both companies, and this could lead to more aggressive pricing Brandt explained as synergies between Protea and its new subsidiary are explored.

Preclinical consolidation

Last year CRO Huntingdon Life Sciences acquired fellow preclinical player Harlan Laboratories and in February shareholders of Covance signed off on a deal that will see the firm merged with LabCorp for $6bn.

Brandt told us he saw the merger of his firm with Protea as further evidence of increased consolidation in the preclinical services sector though said the services combined made this latest agreement “superior to the Huntingdon-Harlan deal.”

Earlier this year, CEO of Charles River Laboratories James Foster said the preclinical sector is ripe for consolidation “given the fact that consolidation appears to be predictable in our business. Like many service-providing businesses, there’s strength of scale and expectations from clients.”