Issue Date: July 14, 2014
A New Concept For Contract R&D
A new contract research organization, Concept Life Sciences, has been formed through the acquisition of three British firms. Taking advantage of a fragmented research services market, Concept’s backers hope to expand their business to $175 million in annual sales within the next three years.
Peakdale is a provider of medicinal chemistry services that employs more than 100 organic chemists in Chapel-en-le-Frith and at the former Pfizer R&D labs in Sandwich. SAL operates five laboratories offering analytical services for industries including chemicals and food. REC provides environmental consulting.
The three deals, for companies that together employ more than 500 people, have a combined value of $100 million, Concept says. Rather than rebrand the companies under its own name, Concept intends to operate them as a “federation” of associated companies.
Concept CEO Alan Morgan says follow-on deals are already in the works, including ones in the U.S. and Germany. “The marketplace is highly fragmented,” he says. Morgan contends that his federation can compete successfully against research service giants such as Covance and Eurofins Scientific.
Drug companies are outsourcing more and more to contractors such as Peakdale, notes Adrian Gibb, a partner with the life sciences practice of Ernst & Young who carried out commercial due diligence on the deals for Equistone. Gibb says Peakdale can open the door to the drug industry for SAL, which is now focused on food and industrial clients.
Morgan claims that Concept can withstand Asian competition in chemistry-related services. He reckons that the global outsourced chemistry market is worth upward of $850 million annually, about half of which has migrated to Asia in recent years. “But we believe that has stabilized and that the trend is starting to reverse,” he says, “as large pharma companies recognize the value of complex projects being executed in time zones more conducive to communication.”
- Chemical & Engineering News
- ISSN 0009-2347
- Copyright © American Chemical Society