The clinical trials group, Icon, which is listed on the Dublin and NASDAQ stock markets, has made its first acquisition since going public almost two years ago.
Icon has bought Pacific Research Associates, a Californian group which specialises in data management, statistical analysis and medical and regulatory consulting for the pharmaceutical and biotechnology industries.
Icon is using its own shares to pay for Pacific and has issued 838,828 shares - worth $14.3 million (€14.7 million) at Icon's current share price of $17 - to Pacific's shares. These will give Pacific shareholders about 7.5 per cent of Icon's enlarged share capital and increases Icon's stock market capitalisation to $185 million. Icon said that the acquisition and share issue will be earnings-neutral this year.
Icon finance director Mr Peter Gray said that Pacific had sales of around $5 million in the year to last September and those sales are expected to grow by between 40 and 50 per cent in the current year. He added that the Californian group operated on margins of around 14 per cent "and those margins are likely to continue."
Mr Gray said that currently about half of the clinical trials data compiled by Icon for its clients goes to those clients for analysis. With the addition of Pacific, Icon aims to increase the amount of its clinical trials business where Icon carries out the actual analysis of the data collected, Mr Gray said.
The addition of Pacific adds a new service, medical consulting, to Icon's range of services and introduces a new client base, including many biotech companies. "Pacific has very strong data management and biometrics capabilities, as well as regulatory," said Icon US chief operating officer Mr John Hubbard. "With the added bonus of a significant client base in the biotechnology sector, Pacific contributes several key facets to the strategic development of Icon," he added.
Floated at $18 a share in April 1998, Icon is only now emerging from a very difficult period, which began when its share price collapsed to below $10 after a profits warning in March last year following the loss of a $5 million contract.
Since then, trading in Icon shares has been choppy but there has been good demand for the stock in the past month and it moved firmer again yesterday.
