This post is an attempt to understand the implications of the acquisition of Ecron Acunova.
Views are invited.
Prior to the acquisition of Ecron Acunova, Navitas had the tech capabilities to handle clinical trial management through the following services:
1. Trial Master File Management
2. Clinical Data Management
3. Clinical Data Standardization
4. Biostatistics (To help with Clinical Trial Design, Selection of patients/sites, etc.)
Basically, they were acting as a Tech-Vendor to a CRO who provide the actual data from clinical trials.
Highlights of the acquisition which has been commented on by mgmt. is:
1. Access to Europe clientele
2. Access to Biosimilars and other emerging pharma markets.
What i felt missing was that the core competency of EA was not highlighted which was handling Phase I-IV clinical trials.
Most of Navitas competitors other than Medidata are mostly CRO’s who later diversified into CTMS, CDM tech solution space (eg: Quintiles, Covance). This investment in IT was more out of compulsion due to the amount of data generated from clinical trials (and nature of complexity) which had reached a point that their in-house data management systems could not handle.
Couple of links which attest to the above point.
Increasing data volume, trial complexity and changes in sponsor and regulator demands are driving investments in IT systems among contract research organisations (CROs).
During a panel discussion Christian Tucat, Senior Vice President Business Development at INC Research, said CROs “are awash with data” adding that “there are more and more data points, biometrics and capturing tools, but the biggest challenge we have is how to read and interpret it all.”
“Our sense is that CROs are viewing IT capabilities as increasingly important competitive differentiators, more so than in the past.
CRO: Explaining the term
The abbreviation CRO is used for both ‘Clinical Research Organisation’ and ‘Contract Research Organisation.’ The former includes only the clinical research companies which can be subdivided into two categories:
• Clinical research organisations offering phase I to phase IV clinical trials
• Bioequivalence centres offering BA/ BE studies
And Ecron Acunova having both of the above 2 capabilities makes the combined entity a fully integrated CRO tech company.
Now, unlike Syngene which is clearly into drug-discovery, Ecron Acunova core competency is Phase I-IV clinical trials with dedicated sites available across Eastern Europe, India, Germany and US as well.
Oppurtunity size for CRO Market
From Quintiles JPM16 slides - http://s1.q4cdn.com/151453148/files/doc_presentations/2016/JP-Morgan-2016-Healthcare-Conference-vFINAL.pdf
Below is a comparison matrix between EA and Quintiles which is a decent match up.
Below snapshots highlight the pedigree of EA’s capabilities and its potential in future.
Coming to the negative aspects:
1. Regulatory: There had been a negative decline in Clinical Trials in India on account of unpredictable and uncertain regulatory environment. Approvals for change in dosage and other sort of hurdles which are not present in developed countries have contributed to the above trend.
2. India is generally held to be a cost-competitive centre for clinical trials due to higher recruitment rates and diversity of population. This could be possibly disrupted with data analytics (and wearables) making it easier and faster to recruit in developed countries.
Initially, ICON is applying Watson Clinical Trial Matching to its breast, lung, colon and rectal cancer trials. The solution enables ICON to advise sponsors how many patients match their trial criteria, where they are located and how they will recruit them
3.EA had a partnership agreement with Biotrial for handling clinical trials in Europe. Biotrial has been in news recently for the failed trial which led to death of 1 patient and hospitalization of 5 others.
4.Low taxation numbers as was highlighted by @hitesh2710 bhai in earlier posts.
All the above information is from public domain.
Ecron Acunova site is a treasure trove of information from which above slides have been taken.
I had bought shares of Take Solutions last week during the correction. I have bought it with a 3yr horizon. There is a degree of high uncertainty and hence please do your own due diligence.