Fortrea sells pair of businesses to private equity firm to become 'pure-play' CRO

12 Mar 2024
www.fiercebiotech.com
AcquisitionPhase 3
Fortrea sells pair of businesses to private equity firm to become 'pure-play' CRO
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Source: FierceBiotech
Fortrea's deal with PE firm Arsenal Capital Partners is expected to close by the end of the second quarter.
Fortrea is offloading its Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners, a private equity firm, according to a March 11 release.
Arsenal will shell out up to $345 million for the companies, with $295 million paid at closing and $50 million on the completion of transition milestones, according to Fortrea’s fourth-quarter and full-year earnings report, which was filed the same day.
The sale will position Fortrea to focus on growing as a “pure-play CRO, with added financial flexibility,” Tom Pike, chair and CEO at Fortrea, said in the release. Sam Osman, head of Enabling Services at Fortrea, will join Arsenal as head of Endpoint Clinical and Fortrea Patient Access.
Endpoint Clinical offers patient randomization and clinical supply management solutions for clinical trials, while Fortrea Patient Access provides patient support and pharmacy hub services. Arsenal buys and sells businesses in healthcare and industrial growth.
Fortrea is a publicly traded company that was spun off from lab testing giant Labcorp in July 2023. The CRO has more than 19,000 employees and runs phase 1 through 4 clinical trials for clients in biotech, pharma and medtech.
Late last year, Acrelyrin blamed a study failure on information that was entered incorrectly by a third party vendor working with Fortrea. The issues were found in a study for Acrelyrin’s drug izokibep in psoriatic arthritis, which ultimately led the biotech to audit its izokibep program after the surprising failure in a phase 3 study on a different disease.
Acrelyrin at the time vowed to never use the CRO for its clinical trials again. Fortrea disputed the biotech’s claims in a statement to Fierce Biotech, pointing to its long track record of successful trial management.
More recently, Fortrea linked up with Veeva Systems, a software provider, and a regulatory review company called Advarra to streamline clinical trial operations.
Fortrea and Arsenal will complete the deal by the end of the second quarter this year, Fortrea said in the press release.
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