PAREXEL International Corp PRXL announced an agreement to acquire all of the business assets of privately-owned Quantum Solutions India ("QSI") for an undisclosed amount. The acquisition is expected to close in early April this year.
Quantum Solutions, based in Chandigarh, India, is one of the leading providers of specialized pharmacovigilance services. Pharmacovigilance is the science and activities associated with the detection, assessment, understanding and prevention of adverse effects or any other problems related to drugs.
QSI, which was established way back in 2004, is known for delivering a wide range of pharmacovigilance services, which includes individual case safety report processing, brand physician activities, affiliate support, aggregate report writing, literature reviews and signal detection.
PAREXEL intends to integrate the QSI business into its Peri/Post-Approval Services group, which is part of the Clinical Research Services (CRS) segment. The company also expects to yield strong synergies when the acquisition complements PAREXEL's Regulatory Outsourcing Services business.
Per management, the QSI acquisition will not be material to PAREXEL’s revenue and EPS for fiscal 2015. However, the long-term prospects that this acquisition has in store for PAREXEL can’t be ignored. It is expected that this acquisition, once completed, will help to strengthen PAREXEL’s capabilities in the expanding field of pharmacovigilance.
According to a new report published by Transparency Market Research, the global pharmacovigilance market is estimated to reach a market value of $5.0 billion in 2019, growing at a compounded annual growth rate (CAGR) of 12.9% from 2013 to 2019. We believe this presence a significant growth opportunity for PAREXEL.
We expect the QSI acquisition will boost PAREXEL’s customer base, particularly in Asia-Pacific region, which is projected to grow much faster than the North American over the 2013-2019. The growth will be primarily driven by a large population base, low healthcare cost and high patient enrollment.
Given the growth prospect of this market, we believe that PAREXEL will continue to pursue strategic acquisition in the region going forward.
Zacks Rank
Currently, PAREXEL has a Zacks Rank #2 (Buy). Other favorably-placed stocks in the medical sector are SurModics SRDX, Abaxis ABAX and Capricor Therapeutics CAPR. While SurModics sports a Zacks Rank #1 (Strong Buy), Abaxis and Capricor Therapeutics hold a Zacks Rank #2 (Buy).
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