Not a week seems to go by without a CRO sale rumor: Chiltern, INC Research and PPD (which in fact was recapitalized last week) are two of the most recent, and now the Wall Street Journal is adding Parexel to that list.
The financial news service is reporting anonymous “people familiar with the matter” as saying the CRO is up for sale; it currently has a market cap of around $3.8 billion, but a premium could see it worth over $4 billion.
The 20,000-employee Boston-area company saw its share price tick up by more than 7% yesterday on the rumor.
“The company has drawn interest from activist investors, including Corvex Management LP, which has built a sizable stake in Parexel,” according to a person familiar with the matter talking to WSJ. Parexel is not commenting on the story.
Parexel has itself been on the M&A trail, and back in February acquired contract medical affairs services provider The Medical Affairs Company (TMAC), bolstering its outsourced healthcare specialist offering.
The deal, financial terms of which were not disclosed, saw the CRO gain access to Georgia-based TMAC and its outsourced medical affairs services to biopharma and the medical device industries.
But the company, one of the major CRO players, has also had its problems, and last year its chief financial officer and senior vice president, Ingo Bank, resigned from the company just days before its fourth-quarter results were released.
Then, a few weeks later, it delayed its 10-K filing as it looked into “misappropriation of corporate funds” by an employee.
In its SEC 12b-25 filing, the company said it found out that one of its employees, who works “in one of the company’s international operations,” had apparently been misusing its money.
Back in October 2015, Parexel narrowed its outlook for fiscal 2016, reducing its revenue target by about 2% at midpoint to around $2.14 billion amid sliding profits.
The CRO had been in the process of shedding around 850 jobs during that year, with the goal of saving between $20 million and $30 million a year starting from 2016.
Covance, itself bought by LabCorp in 2015 and now subject to cuts, tried to buy Parexel 18 years ago for $671 million, but the deal was eventually called off.
By Ben Adams
Source: Fierce Biotech
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
