CASE STUDY: How Do Mergers, Acquisitions and Licensing Impact Outsourcing Decisions and the Role of the CRO?

Speakers:
Glenn Kerkhof, CEO, CHILTERN
Mac McElroy, M.Ed., Executive Director, Strategic Development, Americas, CHILTERN
Colleen Anderson, Clinical Program Director, SHIRE PHARMACEUTICALS

This session took a look at the mergers and acquisitions between a number of CROs. In 2005, Shire merged with New River Pharma. NRP104, the compound that the company was focusing on, was a good fit. Shire could easily market this compound. Shire announced the purchase a few days prior to approval of the compound being received. This was announced in Feb 2007 with targeted closure of April 2007. A communication plan was already in place for June of 2007, and Shire was able to deliver this without it affecting the outcome of the merger.

To successfully complete the merger, the companies set up a plan of action. The focus was that anyone who was not in management needed to be involved in the acquisition in the company. The management was hoping they’d be able to set up plan for everything, and leave those working on the compound available to do their job.

Then, they had to learn to work with yet another merger/acquisition with CTMS. They were running the study. They had no previous work together. Immediate discussions was a key to success, communication was constant during initial start-up work. They worked together to address concerns. The approval was issued; the product became a controlled substance. They needed to relabel all supplies, quickly found way to achieve that, and add staff, and all drugs were properly labeled by the time it was considered a controlled substance.

How did CTMS focus on the human element to all these acquisitions?
What if this happened to you scenario? It was a focused effort, and gift to receive immediate transparency and communication. Teams were committed to target, and wanted to accomplish the same goal. They needed to talk every day. They did hit the target.

Then Shire explained their position in the procedure. At the end of the day, the acquired company still had to deliver. The team members didn’t understand the acquisitions because that wasn’t their job. They needed to focus on their job. The key to transition was planning. And because of that, there wasn’t much disruption. They allowed that team to make the decisions they needed to make without experiencing the external pressures. Project was completed on time and on budget. They didn’t change the staff. To deliver successfully, you need to have a cohesive team, and that’s why the team did well. They inherited an in-license compound.

Mergers and acquisitions will continue. Change is constant, and we need to be ready and prepared for it. They faced challenges, and overcame them.

What’s the leadership thinking about? A decent amount of change and they figure out how to make sure the team keeps working. This is important for communication flow, a leader should be with the team and openly communicate with the management.

Who gets involved? More than just team: legal, development and regulations. It’s important to put up walls to keep focus. It goes back to preparations. You need to have both internal and external resources to successfully ride out acquisitions and mergers. Shire outsourced, and to go out and get additional help did not cause problems.

Chiltern took a look at another element: a CRO and a CRO merging. In context of things that go in, they kept their eye on project while a company was merging. The key was to ensure continuity and to be clear with employees in terms of management structure and processes. This is very similar to project deliverables and demands. This merger appeared to be a very seamless operation. Mergers and acquisitions will continue between CROs and Pharma/Biotech compounds.