Trial site organizational merger and acquisition activity continues as Headlands Research recently purchased Artemis Institute for Clinical Research, representing a move by the former to strengthen its ability to impact the clinical research process, now establishing a global footprint of 13 trial site centers. Based in the heavily populated and ethnically diverse South California region (Riverside and San Diego), Artemis Institute for Clinical Research focuses on numerous important therapeutic areas including Psychiatry, Neurology and Vaccine trials. The purchase makes sense, suggests Mark Blumling, CEO, and founder of Headlands Research, as the target not only compliments their trial site portfolio but also opens up tremendous opportunity to access a large diverse population for behavioral, health-based, vaccine and other clinical trials. With a growing number of clinical trials influenced as well by COVID-19 spurring the need for more vaccines and therapies specific to coronavirus, sponsors and their CROs wage war for research participants. This competition goes across therapeutic areas from oncology to behavioral health. The trial site organization will never be the same as those achieving certain revenue targets become acquisition candidates for rollups.
Artemis Institute for Clinical Research was founded by in 2008 by Dr. Vishall Mehra with the purpose of prioritizing patients and advancing medicine. Based in the Inland Empire and San Diego, this research site organization specialized in Psychiatry, Neurology, Vaccine, Inpatient and even Medical Device clinical trials. Impressively, the commercial trial site organization has conducted, according to the M&A press release, over 500 clinical trials across 20 therapeutic areas, averaging about 41 commercial clinical trials per year according to the press release. TrialSite did find on their website that in fact the number they share is 315 clinical trials over that same period (about 26 trials per year). With a local executive team, the group employs about 40—TrialSite estimates their revenue between $5 to $10 million. Founder Dr. Mehra earned his MD from Texas A&M University and completed the Psychiatry Residency Program from University of California, San Diego.
Operating in both San Diego and Riverside, California (part of a region known as the Inland Empire)—part of the Southern California area with well over 20 million people with large Hispanic and Asian populations, Dr. Mehra recently declared, “We are very excited to be joining Headlands Research and we share in their vision to dramatically improve the clinical trial process.”
Headlands Research as Consolidator—Ahead to ‘Super Site’ Status?
Backed by private equity firm KKR, Headlands Research has been identified by TrialSite as an agent for consolidation in the clinical trials ecosystem. In a recent report by boutique investment bank Provident Healthcare Partners titled, “Consolidation in Clinical Research Sites and COVID’s Impact,” the authors recognize trends in trial site consolidation, notably market fragmentation, growth trends and operational efficiencies supporting the consolidation thesis in this important space. Even with the impacts of the pandemic crisis, M&A activity is considered a given ongoing.
These bankers consider Headlands Research as representative of the “buy and build” model of site consolidator. Again, fueled by private equity capital from KKR, Headlands has now completed over 1,000 clinical trials across a wide spectrum of therapeutic areas. How can Headlands differentiate itself from other private equity-backed site consolidators?
Differentiation in a Competitive Space
Apparently, they are investing to “dramatically improve and change the clinical trials process,” suggests the investment bankers from Southern California. But how will they accomplish this? Provident Healthcare suggests they will continue to use KKR funds and their market position to 1) leveraging patient-centric best practices to recruit large numbers of test subjects (there is competition among sponsors and CROs for subjects), and 2) produce superior quality data.
Thus far, the Headlands rollup of trial sites includes a number of centers across America and Canada, including firms such as Centex Studies, a multispecialty research group located in Texas and Louisiana to Clinical Research Atlanta, a multispecialty group focusing on specialty population recruitment and treatment. Other examples can be read in the Provident Healthcare Partners interesting report.