Will Alten Be A Significant Clinical Trials CRO?
Alten Acquires a UK Clinical Trial CRO
ER&D services largest pure-play, Alten, has ambitions as a clinical trials contract research organization (CRO). During Q2 2021, the company completed the acquisition of Cmed. Cmed, a clinical trial CRO based in the UK. It is a small firm with EUR 20m in revenues and 180 consultants. It has specialized in oncology, immuno-oncology, cell therapy, and rare disease.
Cmed brings consulting capabilities that will position Alten earlier in the clinical trials lifecycle. The company also has a clinical trial software product, Encapsia. Encapsia brings modules: electronic data capture (EDC) and eSource, for direct data capture. On the one hand, EDC helps to digitize handwritten notes along with independent data such as patient medical history, laboratory results, and medication. On the other hand, DDC captures directly data from electronic devices, such as a digital thermometer. Tablets and mobile devices are playing an increased role with staff and patients directly inputting electronically. Encapsia does not cover the full suite of clinical trials software but brings some level of productivity, initially to Cmed.
Cmed is little-profitable and has an adjusted EBIT margin close to 2%. . Alten believes it can, however, improve Cmed’s margin situation by accelerating its commercial activity.
Axial Is the Clinical Trial CRO Brand for Alten
Cmed fits nicely Alten’s clinical CRO business Aixial, which is headquartered in France. With Cmed, Aixial is now a 1,000 FTE organization, operating in France and also in Denmark. Aixial acquired Larix in 2019, bringing presence in Denmark and also Nordics overall. Larix started its operations as a statistical consulting form, expanding over time to data management services, clinical research, QA in 2008, and pharmacovigilance.
Alten Competes Against US Giants
Axial operates in a space occupied by large CROs such as IQVIA, LabCorp, PPD, Icon (that recently acquired PRA Health Services), and Syneos. Compared to these vendors, Axial is a dwarf (with a headcount of 1,000). By comparison, Icon has 38,000 employees. As always, Alten takes a pragmatic approach to the CRO market. While it has no chance of catching up with CRO leaders, Axial enjoys higher profitability than the rest of Alten and acquires at below-the-market multiples. We will see how far Alten’s CRO ambitions go.