Parexel Goes Private: Pamplona Capital does $5B buyout.


Healthcare CRO giant Parexel, in the news most recently for reviving efforts at remote data gathering from clinical trial subjects, has been bought out by Pamplona Capital Management.

According to Ben Adams, writing in Fierce Biotech, Pamplona, which has operated in New York and London for the past twelve years, is a private equity company focused on the healthcare industry. It paid $88.10 per share for Parexel, or nearly $5 billion. This represents a 27.9 percent increase over Parexel’s last price per share before acquisition rumors began and a 23.3 percent increase over its year-long high.

Josef von Rickenbach, chairman and chief executive officer of Parexel, said, “Parexel benefits from a strong operating foundation with expertise and resources to support our clients in their clinical trials around the world. However, as our results over the past year show, the market for biopharmaceutical services is evolving. We believe the more flexible corporate structure afforded by this transaction will better position us to advance Parexel’s strategy in light of these realities and to shape the company to best capitalize on our exciting market opportunities.”

Parexel has been a leader in clinical trial data gathering and analysis, has nearly 20,000 employees and earned $605 million in the second quarter. However, it has also recently eliminated almost 2,000 jobs to save money.

Pamplona is optimistic. Partner Jeremy Gelber, M.D., said, “We have great respect for the global leadership that Josef and the talented employees at Parexel have built. We are excited to partner with a company and a team that have a strong track record in helping to successfully navigate the complexities innate to the biopharmaceutical industry and bring new therapies to market.” Parexel will become a private company, no longer traded on any market.

Both the regulatory environment and the marketplace now demand that a proposed therapy show its worth in a trial population that actually reflects the intended patient population. Data from electronic medical records, remote sensors carried by subjects, smart phone apps and other sources now contribute to the data stream that is needed.

Issues that influence the difference between clinical trials and real-world patient populations include additional diseases subjects suffer from, additional treatments they are receiving and various differences in treatment by different physicians. It is also important to identify the researchers themselves. All of these factors must be gathered and reported during the trial process.

Parexel Senior Vice President Josh Shultz said, “The most effective way for pharma companies to advocate for reimbursement with more expensive products is to demonstrate and de-risk for payers that the compound will have the expected value in a clearly targeted group of patients.”

As Parexel Vice President Paul Evans concluded, “We know that just because an investigator has had previous success doesn’t mean he or she will be successful in the next study, because the protocols are different. But we do know that investigators have figured out how to address the challenges of patient recruitment and understand how to deliver successfully on a study at a much lower risk for future studies. This is a business where good experience counts.”


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