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More acquisitions of CROs anticipated through 2018

While the ongoing rift in Congress over health care reform continues to garner headlines, the growing activity in the pharmaceutical market continues with little coverage or fanfare. Despite this, the mergers between contract research organizations (CROs, for short) will likely affect health care in ways only investors may see right now.

For the uninitiated, CROs work with many prominent drug manufacturers to get FDA approval for a number of products. The help with tasks such as running clinical trials, discovering and evaluating subjects for such trials and maintaining data that could be cross-referenced in the future. But like many businesses trying to survive (or prosper) in other industries, more pharmaceutical companies are looking to purchase or merge with CROs in order to be more efficient.

Further, private equity firms are seeing this trend and are buying CROs as well. They ostensibly see a great deal of value in these companies that make them attractive to an equity firm’s investors. According to a recent Bloomberg.com report, M&A spending on CROs topped $24 billion in 2016, and with $13 billion in deals so far this year, the 2017 total is very likely to eclipse last year’s total.

The growth in activity exemplifies the need for skilled legal counsel in corporate transactions. An experienced mergers and acquisitions attorney will understand the legal challenges that can arise in such transactions and can anticipate issues before they become deal-breakers.

 If you anticipate making a strategic acquisition or have been extended a purchase offer, we would like to speak with you.

The preceding is not legal advice and does not create an attorney client relationship. 

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Daniel S. Willard, P.C.
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