July 17, 2013

Life Sciences IT Showing Strong Vital Signs

In April, we shared our view that 2013 may be the year for Life Sciences IT. Well if the month of June is any reflection, it is well on its way. The month of June saw no fewer than five new deal announcements, many of which were PE-backed. I have highlighted a few that fall within Clearsight’s coverage universe below.

On the year (through June 2013), the Life Sciences IT and Services sector has announced over 25 M&A transactions. Of these, approximately 60% have gone to strategic acquirers with the balance split evenly between new platforms and add-on deals backed by PE.

The pharmaceutical/life sciences industry is experiencing unprecedented change, which we believe is contributing to this spate of deal activity. After all in chaos there is opportunity. Currently, pharmaceutical companies are faced with a number of challenges, including rising R&D costs, increased regulatory requirements and loss of patent protection on a number of blockbuster drugs over the last several years. In response to these challenges and the pressures they put on company profits, pharmaceutical companies continue to explore cost reduction and other performance improvement strategies.

A corollary of this trend is increasing demand for eClinical solutions and related services. Efficient management of clinical trials has become a necessity not only to control cost, but to contain risk and ensure compliance. Clinical trials are research studies intended to produce data to support health care decisions regarding new medications, treatments or devices. eClinical solutions enable the efficient collection, management and analysis of this data, automate workflows, facilitate reporting, and maintain compliance, among other features. Ultimately, these solutions reduce the time and cost of conducting trials for all stakeholders involved – sponsors, investigators and subjects.

The eClinical Solutions Market is fragmented and capabilities vary widely by provider. As reliance on these solutions grows, we expect to see i) new entrants enter the market, ii) best-of-breed providers to emerge, and iii) a healthy level of M&A activity as vendors seek to integrate various solutions on to a single platform and gain scale at all levels.

Representative Life Science IT Deals in June 2013:



Qforma Inc.

SkilaMederi/ BelHealth Investment Partners



Envision Pharma, Inc.

The Halifax Group

Control Investment


Zinc Ahead, Ltd.


Non-control Investment



Veeva Systems, Inc.