Mercury Private Equity (MPE) has made a GBP7.1 million ($11.6 million) expansion investment in UK company Profiad as it spies an opportunity to improve the clinical trials procedure on behalf of pharmaceuticals companies. Profiad is a site management organisation (SMO) business which organises patient recruitment and trial management services for sponsors of pharmaceutical clinical trials.
The Reading-based business was established by current managing director Hywel Thomas in 1997. Prior to this, in his work as a GP, Thomas had set up a company called Rifleman which performed the same function as Profiad now does, but on a smaller scale in his native country of Wales.
This company was sufficiently successful that Thomas realised he was onto a good thing and set about rolling out the concept on a national basis. Having started with no money and no customers, Profiad has grown to become the largest business of its kind in the UK. Up until now it has been funded by Glaxo Wellcome.
Thomas’ focus has been on improving the efficiency of clinical trials by building a network of affiliated GPs across the country, entering into commercial agreements with them and training them in standard operating procedures (SOPs).
The opportunity for Thomas was provided by the deficiencies in the existing system. A normal clinical trial will start with an idea that needs testing using a sample of patients with certain characteristics. The idea is then formalised through a protocol, which is sent to GPs, who are asked to decide if they will accept patients for the trial and, if so, how many. The number allocated might end up being smaller than the number required by the protocol. In this event, the doctors will be written to a second time. “It takes a long time and is clumsy administration because those involved are not working to standard operating procedures,” says Lisa Stone, who worked on the deal on behalf of MPE and is a member of the firm’s healthcare sector team. “The trials are of variable quality which means that the pharmaceutical companies have to send people round to the doctor to ensure that the data is being properly collated and checked.” Unfortunately, this is very time-consuming. “Time is money in the pharmaceutical world and one or two months’ difference in the time taken to complete the trial can be hugely costly,” adds Stone.
Profiad, the largest business of its kind in the UK, manages 145 study centres; works with 650 GPs; and has access to 1.5 million patients. The company claims that the size and distribution of its GP and patient pool benefits its customers (the sponsors of the trials) in two main ways. Firstly, it enables the company to recruit patients for trials covering a wide range of therapeutic areas and, secondly, it accelerates access to specific patient groups. In addition, Profiad’s GPs are trained to work to exacting standards, collecting high quality data while protecting the rights and safety of the patient.
Thomas also claims to provide a more efficient service in the event of there being a shortfall in the number of patients required by the protocol. Thomas gets quicker feedback by sending out e-mails to his network so that any irregularities can be balanced within 24 hours. In addition, the company is developing a web-based system to facilitate the capturing of clinical information during the trial process.
Profiad also claims to be attractive to patients due to a customer-friendly approach. Other SMO companies outsource the work to dedicated facilities or contract non-GP staff from a pool to carry out the research. By contrast, Thomas has put the emphasis on a GP-led model in which the trials are carried out in the primary care environment, always under the supervision of the patients’ own GP.
The investment by MPE – which gives it a 56 per cent stake in the company – will be used partly to buy out certain existing shareholders and also to provide for its working capital requirements as it grows in the UK and in continental Europe. At the moment emphasis is on the UK, but expansion plans are on the agenda. “Our feeling is that, if it is the right formula, it can be rolled out anywhere in Europe, because the pharmaceutical companies themselves are growing across Europe,” says Stone. “Having said that, we are looking at country prioritisation with a particular focus on those countries where the structure of healthcare provision is similar to the UK.”
The transaction is one of a number completed by MPE’s healthcare sector team recently including the GBP73 million ($119 million) acquisition of Sinclair Montrose, the healthcare recruitment agency, to form Match Group earlier in the year (see table). MPE has developed a sector specialisation in healthcare because it is perceived to be growing while at the same time undergoing considerable change in service provision. Stone maintains that the SMO segment is becoming particularly attractive as more drugs are trialled than ever before and more patients per trial are required.
Says Lindsay Dibden, a healthcare director at MPE: “There is a clear demand for the services of SMOs which is being driven by the pharmaceutical industry’s attempts to shorten the time taken to bring new things to market. Profiad’s efficiency of trial set up, flexibility and responsiveness to protocol changes, combined with its large resource of patients, will all contribute to its long-term success,” he says.
Adds Hywel Thomas: “The capital will enable us to grow our business within the UK, capitalising on the increasing trend from pharmaceutical companies to
outsource clinical trials.”
Stone foresees MPE committing further injections of capital into Profiad in the future to enable its European roll-out as well as enabling the broadening of its product range, particularly in IT-related areas.
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