The proposed $9-billion merger between data-cruncher IMS Health and contract research organisation Quintiles Transnational may not seem like a perfect fit at first glance.
But they are, in fact, quite rightly matched. And it has all to do with data, say experts. The deal creates a mammoth, Quintiles IMS Holdings Inc, with a market value estimated at $18 billion. The clincher is that the combined entity will house research skills sharpened by analytical data on medicines, its distribution, the people consuming the medicines and those prescribing it.
The merger is about growth, innovative solutions and “using data and technology to enable an improved path to clinical trial execution,” Ari Bousbib, Chairman and CEO, IMS, told analysts. Quintiles CEO Tom Pike points out that they were always a tech leader. But the use of big data from IMS would make it “unparalleled”, he said.
With company top brass defining it as a “transformational merger of equals”, industry veteran Shoibal Mukherjee observes that the deal keeps its eye on the future where data is big and analysingit, getting conclusions and channelling it into research will help drive the business. The combined company will now be better placed to provide a seamless platform of data and research across healthcare, he adds.
Both IMS and Quintiles have operations in India. IMS tracks the pharmaceutical industry in terms of retail distribution patterns of medicines. More recently, the company morphed into more of a healthcare technology services consultancy, culling details on doctors, mapping their spread across the country. Quintiles works with companies on their clinical research and has operations largely in Bangalore and Mumbai. The contours of the global deal in India are still unclear, even as the merger is slated to close later this year. Globally, the companies have more than 50,000 employees across 100 countries. And the deal is expected to have cost savings of about $100 million by the end of the third year, the management said. Among other things, the savings would come from rationalising geographic overlaps and administrative costs, officials added.
Research challenges Research on medicines and biological drugs is facing increased challenges in terms of zeroing in on good medicine and establishing its greater benefits compared with existing technologies, the management said, explaining the backdrop to the merger.
The companies said the merger would help “improve clinical trial design, recruitment and execution in the $100 billion biopharma product development market”. The merger would also help create a global real-world evidence solutions platform by combining a leading portfolio of anonymous patient records, technology-enabled data collection and observational research experts to address critical healthcare issues of cost, value and patient outcomes, it added.
The deal comes at a time when big-ticket mergers and acquisitions are still being looked at in the pharmaceutical industry to tide over difficult times. This merger is not between drug companies, but its outcome will have an impact on the industry in more ways than one.