ERT Acquires CareFusion

April 30, 2010

Applied Clinical Trials

Last week, ERT announced it would purchase the research services division of CareFusion Corp. (CRS) for $81 million in cash. The transaction is expected to close in June 2010. It is a deal almost a year in the making, according to John Blakely, Executive Vice President, Sales and Marketing for ERT, who spoke with Applied Clinical Trials about the acquisition.

Blakely outlined the synergies between the companies as such, the number one ECG core lab with the number one respiratory core lab and the number four and five ePRO providers. The technologies? ERT has a strong data collection and operating platform in its EXPERT system. CRS a strong front-end technology in its devices, which serve as respiratory data collection systems for pulmonary function. The acquisition also brings multiple modalities for ePRO delivery—handhelds, Web and IVRS-based. In addition, the company cultures, dedicated to serving the customer are in sync.

CRS has a long history, originally founded in Germany in 1954 as Erich Jaeger GmbH as a healthcare device manufacturing and servicing operation. In 2002, it entered into clinical research under VIASYS Healthcare, which became part of Cardinal Health as an acquisition in 2007. Last year, the CRS business was spun off as CareFusion. All to say that Blakely is quite pleased that the company now has an extended footprint in Europe.

“This acquisition gives us significant presence in continental Europe. We already have the UK presence, so we are excited about that,” said Blakely.

For ERT, it is evolving from a background of EDC, ePRO and cardiac safety solutions. Last June, the company sold its EDC business to OmniComm Systems in order to focus and expand on its cardiac safety and ePRO business lines. Earlier this year, it launched Centralized Cardiac Safety 2.0, and now this acquisition announcement.

There is a distinction here that makes it hard to categorize ERT by the books right now. Basically, ePRO is placed under eClinical or technology and cardiac safety assessment is under Laboratories. Shedding its EDC business makes sense as ERT wasn’t in the market to become an end-to-end eClinical provider. As the Oracle Phase Forward announcement three weeks ago shows, that eClinical market is consolidating quicker and at higher levels than previously thought.

ERT, it appears, is making its way in a new category “technology services that have to do with patient safety data.” Respiratory function. Suicidality monitoring. ECGs. All of these are issues that FDA has flagged for approved drugs, and is raising the regulatory bar for similar drugs in trials. Blakely said, “As this industry matures and outsourcing matures, these kind of combinations make more sense.” He continued, “Sponsors are demanding more from service providers, and we have to continue to look at the complementary services that make true sense in the industry.”

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