Quintiles, the world’s largest life science services company, is going to get even bigger – but through a joint venture rather than an acquisition. The deal announced Tuesday to partner with Quest to take on No. 1 lab tester LabCorp is seen as the best way for Quintiles to capitalize on a changing market, a Q executive explains.
“From Quintiles’ perspective, it is clear that the clinical development industry continues to become more complex and competitive,” Phil Bridges, senior director of corporate communications for Quintiles, writes via email from New York.
“It is in this context that Quintiles has made a customer promise to improve their probability of success.”
As drug development and related pharmaceutical services become ever more expensive, big companies are looking for partners and service providers who can not only cut costs but perhaps speed up development. And with LabCorp’s recent addition of Covance, Quintiles was facing a bigger competitive threat in dealing with pharmaceutical clients.
“Through this joint venture with Quest Diagnostics, we are combining components of a leading biopharmaceutical services company with a leader in diagnostic information services,” Bridges explains.
“The joint venture will combine the scale, clinical trial expertise, and diverse therapeutic experience of Quintiles with Quest Diagnostics’ operational, scientific and quality excellence, supply chain network and informatics to promote greater innovation, quality and value for biopharmaceutical customers.
“In addition, customers will benefit from a globally scaled and agile business model that is singularly focused on delivering top-quality services informed by deep medical and clinical knowledge.”
The deal was announced very early Tuesday – well before markets opened. And executives from both companies were scheduled to participate in a conference call to discuss what they see as the deal’s merits.
As for now, just what the deal means for jobs and where a joint venture might be located – well, answers to those questions will have to wait, Bridges says.
“We will evaluate the location for the JV headquarters in connection with the integration planning efforts. We expect to be able to provide this information around the time of the transaction close,” he points out.
As for jobs …
“Both Quintiles and Quest Diagnostics recognize that their employees are an integral part of their overall value. In the coming weeks and months, a joint integration team from Quintiles and Quest Diagnostics will meet to focus on integration planning and where opportunities exist to leverage the strengths of both organizations, including people and facilities after the transaction is closed. No definitive decisions have been made at this point.”
The bullet points
Bridges lists a number of bullet points about what Quintiles sees as advantages to a JV:
- Experienced, global management team and board of directors appointed from and by both parent companies
- Customers will benefit from a globally scaled and agile business model singularly focused on delivering top-quality services informed by deep medical and clinical knowledge
- Opportunities for synergies in operational execution as well as how we work to grow current and future business opportunities for the new entity as well as across parent organizations.
- Best-in-class supply chain management
- Opportunities to explore:
- New ways to enhance clinical trial patient recruitment and retention
- Speed validation and development of companion diagnostics
- Enhance support of real-world late phase studies
- Population health analytics and tools
Advantages for clients
He adds that advantages for clents include:
- The joint venture will enable biopharmaceutical customers to enhance their drug development process; support precision medicine through companion diagnostics and biomarker discovery; and promote value by leveraging the scale, scientific expertise and operational excellence of both companies and their parent organizations.
- Collaboration involving data analytics capabilities and patient data resources can help customers enhance their drug development efforts.
- Access to additional clinical data repositories could provide benefits to customers in terms of trial set-up, efficient investigator site selection and potentially, post-market surveillance data.
- Combined innovation capabilities will help support precision medicine (with) globally integrated genomics, bioanalytical and central lab offerings/capabilities
- Next-generation genomics sequencing combined with analytics will provide “end-to-end” integrated companion diagnostics services
- World-class and extensive esoteric testing laboratories/capabilities
- Combined entity will have access to extensive test menu, including flow cytometry capabilities, pharmacokinetics for large and small molecules and biologics bioanalysis
- Will leverage the deep scientific, medical and bioinformatics expertise of both parent organization
- Parent organizations have approximately 3,500 medical doctors, Ph.D.s and biostatisticians combined
- Breadth and depth of development experience, expertise and capabilities across therapeutic areas and geographies
- The combination of both laboratory services operations will enhance quality, responsiveness, efficiency and effectiveness.
Note: We’ll have more on the deal later after the conference call and the markets begin trading.