PRA acquires small clinical development software company for $2.5m

28-Jul-2015 - Last updated on 28-Jul-2015 at 22:01 GMT

CRO (contract research organization) PRA Health Sciences reported in its earnings call on Tuesday that earlier in Q2 it acquired Value Health Solutions (VHS), a clinical development software company, for $2.5m.

Colin Shannon, PRA's CEO, said that VHS has developed a library of clinical trial management applications and modules “that uniquely aligns with PRA's strategy. Once this technology is fully integrated, it will accelerate the development of our Predictivv platform,” he said, referring to the company’s new platform launched last month and is about to be used in a pilot study to harmonize data, processes, and people across the trial.

PRA also expects to launch several applications of Predictivv that will focus on aspects of clinical trial management including site selection, patient recruitment and investigator engagement.

The acquisition comes as the company reported bookings of $407.8m of net new business in Q2, representing a book-to-bill of 1.21x service revenue. Adjusted net income for quarter was $29.7m, which represents an increase of 112% over the same period last year.

Shannon said: "We have expanded our operating margin, achieved significant growth in our earnings, generated solid cash flow from operations, which has allowed us to reduce our debt levels, and also delivered strong new business wins.”

As far as the company’s client mix, the top five clients represent 39.2% of total Q2 revenue, and its single largest client made up about 10.3% of total revenue during the quarter.

For the full year, the company is updating its guidance given the “strength in the underlying business and the movement in current foreign exchange rates.” As a result, PRA has increased its guidance for diluted GAAP net income per share to between $0.80 and $0.90 per share, compared to $0.70 to $0.80 per share previously. In addition, management has increased its guidance for Adjusted Net Income per share to between $1.75 and $1.85 per share compared to previous guidance of $1.62 to $1.72 per share.

Market Outlook

Most recently PRA has made a big push to hire more CRAs and other positions and Shannon noted in his comments that the CRO industry is “seeing some pressure on salaries and we've got to be careful with pricing…So we are very cautious but we are not seeing anything dramatically shifted from the last couple of quarters.”

When questioned on the company’s workflow, Shannon added that the company is “seeing a very good visible amount of RFP volume.”