NovaQuest’s Clinical Ink in second round of process

The Baird-run process for the eClinical company includes sponsors and PE-backed strategics.

Two years into its investment, NovaQuest Capital Management has put Clinical Ink back on the market, according to four sources familiar with the matter. 

Baird is providing financial advice on the sale process, which is in its second rounds, some of the people said.

The Horsham, Pennsylvania, company is projecting approximately $6 million and $35 million of EBITDA, respectively, for the year ended 2020. 

One source said the company is likely to fetch a more than 20x EBITDA multiple, while a second placed price expectations in the $140 million to $150 million range. A third source said the company wants a growth revenue multiple, which on the high end could reach up to 5x. 

Both financial sponsors and PE-backed strategics are in the mix, sources said. 

According to one of the people, the company held management meetings in January during the J.P. Morgan Healthcare Conference in San Francisco. A process was just getting underway before being put on hold when covid-19 hit. 

Led by CEO Ed Seguine, Clinical Ink improves the clinical trial process with eClinical services and tools including eCOA, or electronic clinical outcome assessments, and ePRO, or electronic patient-reported outcomes. Its tech-enabled solutions remotely capture and integrate electronic data from clinical trial sites, clinicians and patients. 

PE-backed companies of scale in this space include Genstar Capital’s Signant Health, formerly Bracket Global, and ERT, backed by Nordic Capital and Astorg. Astorg joined Nordic as an investor in ERT in October in a deal valuing it at $3.8 billion, PE Hub wrote. 

NovaQuest in May 2018 bought a majority of Clinical Ink and provided a substantial infusion of additional growth capital. RTI International, a non-profit research institute, co-invested in the deal. 

While the pharma outsourcing space is generally considered to be a strong performing industry coming out of the downturn, sources said assets exposed to clinical trials aren’t entirely immune to the covid-19 impact.

Ongoing clinical trials are moving forward, but there have been disruptions, and the start date for many new pharmaceutical or biopharmaceutical trials have been pushed back, sources said.  

For example, IQVIA, one of the world’s largest contract research organizations, said in its Q1 earnings call two weeks ago, that approximately 80 percent of its clinical research sites are inaccessible. The industry giant expects 35 percent will remain inaccessible in Q3, with a return to 100 percent functionality anticipated at the beginning of Q4. 

That said, IQVIA CEO Ari Bousbib noted that “as site access remains constrained, we are seeing an uptick in demand for e-consent, virtual trials, eCOA and connected devices.”

Clinical Ink isn’t the only pharma services player in the market. 

Linden Capital Partners relaunched its sale process for ProPharma Group after private equity interest persisted through the crisis, PE Hub wrote last week. A first round bid date is set for late June, sources said. ProPharma provides compliance-related consulting services to the life sciences industry. 

NovaQuest, Clinical Ink and Baird didn’t return requests for comment. 

Action Item: Check out NovaQuest’s latest Form ADV