INC exec: Global scale-up key driver of Kendle deal

May 13, 2011 – 9:54 am by Michael Christel

We caught up with INC Research’s chief operating officer John Potthoff, Ph.D., by email for more on INC’s big deal to acquire CRO rival Kendle, a move that could elevate the privately held company into a top five industry player.

R&D Directions: How will the acquisition of Kendle position INC to compete with the top tier of the global CRO business?

Dr. Potthoff: Together, these companies will bring complementary assets that enable the breadth and depth of services and expertise that are most valuable to our customers.

• Global scale and experience: Operations in 42 countries, solidifying our geographical scope in Latin America and Asia, as well as Europe, the Middle East, and Africa. The talented people of Kendle will enhance our ability to field more high quality teams worldwide to better position us to handle large-scale global trials, as well as staff that can be committed to regional or functional service projects.

• New levels of operational excellence: We will be able to leverage our proven best practices within INC Research’s Trusted Process to reduce variability and increase predictability in trial outcomes, as well as gain economies of scale to create cost efficiencies.

• Reinforced therapeutic expertise: Builds on [Kendle’s] complementary heritage of therapeutic expertise, which in combination gives us a broad spectrum and depth of global therapeutic experience, much of which strategically aligns with the largest areas of clinical R&D investment, including cardiovascular, CNS, endocrine, infectious disease, inflammation, and oncology.

R&D Directions: What has been the impetus behind INC’s aggressive growth strategy over the past year? Was part of it the realization that mid-tier CROs face growing challenges in today’s market?

Dr. Potthoff: Our growth strategy is intended to solidify our scale and scope in order to deliver biopharmaceutical companies of all sizes globally high quality teams, therapeutic expertise, and operational excellence while retaining a customer-centric focus on each individual project.

This acquisition is a proactive move to match the increasing trend towards outsourcing.

Major pharmaceutical companies have begun reducing the number of CROs they work with, which is a trend expected to continue. This transaction, will better position us to provide the required staff/expertise, technologies, and processes on a global scale.

Biopharmaceutical companies of all sizes are relying on outsourcing partners earlier in the clinical trial process. The combined clinical and strategic assets of these companies, from strategic planning to Phase I-IV through commercialization, enhance our value proposition throughout the R&D lifecycle.

R&D Directions: Are they any specifics yet on how Kendle will be formally integrated into INC once the deal is closed?

Dr. Potthoff: A joint integration team will be formed to carefully plan key integration priorities and a detailed implementation that will commence when this transaction closes.

R&D Directions: Will this deal enable INC to pursue more large-scale strategic partnership opportunities?

Dr. Potthoff: After close, the new organization will have the resources and scale to work in operational and alliance partnership with large pharmaceutical companies. The “new� pharmaceutical outsourcing models require broader capabilities and critical mass, and this transaction will allow us to successfully compete with other leading CROs.

Our acquisition of Avos Life Sciences (now AVOS Consulting) earlier this year also enhances our ability to deliver strategic, operational, and financial analysis to life sciences companies, including the creation and management of clinical delivery alliances.

However, a continued mandate will be to maintain our historical intimacy with start-up and small to midsize biopharmaceutical companies where our advisory services and therapeutic expertise have been the mainstay of the relationship.

R&D Directions: With healthcare demands increasing for sponsors, how important is it for a CRO to be able to provide broad clinical development services, as well as differentiated expertise in some niche areas?

Dr. Potthoff: Our philosophy has always been to achieve sustained, organic growth and acquire in strategic areas that will meet the ongoing and future needs of our customers. Our Trusted Process, our continuous improvement methodology for outsourced drug development services, has proven to be a major differentiator, along with our dedication to our therapeutic approach to clinical trials.

Tags: CROs, INC Research, Kendle