Transactions
Life Sciences Strategy
Instem Associates believes that there is a significant, increasing and enduring market for the leading information solution providers in the market of drug development. This is a consequence of the pharmaceutical industry looking to increase the number of new drugs brought to market, whilst reducing R&D costs and timescales through greater outsourcing and improved use of technology. In 2004 the world’s pharma and biotechnology companies spent approximately $15Bn in R&D IT with a predicted CAGR of 7-8% through 2008. Of this, the annual applications software spend in drug development is estimated to be in excess of $500M.
- Despite the significant expenditure, suppliers of technology to the pharma R&D market are frequently:
- small (less than $5m revenue)
- challenged in scaling up to provide worldwide marketing, sales and project delivery
- focused on a narrow niche of scientists in the drug development lifecycle, making it difficult to deliver the level of data integration that the market now requires
- unable to achieve sufficient market share to consistently deliver world-class products and financial performance
- Instem Associates' strategy is to use the leading position already established by Instem LSS in the PreClinical area as a platform to become the leading information solution provider in the market of drug development. In addition to its established market position Instem LSS has:
- an experienced management team
- an infrastructure capable of servicing the worldwide market and delivering economies of scale in product development
- an unrivalled client base receptive to taking additional products and services.
- A proven M&A culture
Growth would come by increasing the number of applications through marketing partnerships with specialist technology companies and the acquisition of appropriate businesses in the field.
In order to make acquisitions easier these businesses may have ownership and funding separate from Instem LSS, but controlled by Instem Associates and with a partnership trading agreement with Instem LSS in place.
