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Getting Bigger: United BioSource




Let's say some kind-hearted, pink-shirted investment banker in Connecticut blesses your idea and hands you $150 million. Your banker has just one request:  don't spend it all in one place. What next?

Ethan Leder, founder and CEO of United BioSource, has used his cash to acquire eight companies of late, a building spree unlike any recently seen in the industry's CRO or technology vendor community. We more or less cribbed this from the company's home page, but United BioSource is trying to dominate the post-approval space by helping customers prove efficacy, minimize safety risks and document the economic benefits of drugs and devices. This is not your conventional CRO. This is not your conventional clinical trial technology concern. Find those mental category lines and just blur them a bit.

The acquired companies include Muse & Associates (Medicare consulting), iLearn (web-based training), MetaWorks (scientific literature analysis, drug safety), PharmaStar (investigator  training), Dynarand (interactive voice response), B&B Clinical Innovations (contract research), Medtap International (outcomes research, health economics), and DataPhase IV, (pharmacovigilance, post-marketing analysis).

The Bethesda, M.D.-based UBC aims to become the biggest, easiest choice for post- approval studies. Safety was paramount, UBC realized. And not just drug safety. Says Leder: "We knew our customers were risk averse. They like working with safe choices. 'Will I get fired for making this decision?'"

The rapidly acquired pieces seem to be working together. In the first five months of 2006, Leder says, the company has done twice as much business as it did in all of 2005. He readily concedes that technology alone does not clinch a sale. UBC's focus on service presumes that the company does overlap with traditional contract research organizations (CROs) to some degree. "You need stellar project management capabilities," Leder says.

The company's recent growth threatens both technology suppliers and traditional contract research organizations--despite the fact that UBC fits neatly into neither category. Even before public scrutiny of COX-2 inhibitors or the antidepressants prescribed to children, Leder says, UBC felt many customers were facing new regulatory and public scrutiny. "They were facing significantly increasing pressure from pricing to proving that those products were safe and effective in the world. There were trends accelerated by events that were fortuitous for us, perhaps not for others. We've seen a lot of growth in safety and risk management."

Vision also helps. As the FDA and the lawyers outside the industry came to grips with the limitations embedded in Phase I-III research, Leder says, the demands on what happened in the post- approval phase would only grow: "We felt the market would demand evidence."

Convincing the FDA of the safety or efficacy of an challenged product has become essential. "You have to do that with evidence," says Leder, a lawyer by training. "You can't do it with promotional claims."

Each of the acquired companies has been integrated into the core UBC platform. It includes tools for electronic data capture, drug safety, and a host of other things that UBC's PhD epidemiologists, health economists and statisticians can use to assess what really happens to drugs once they're on the market. Of UBC's 550 employees, Leder says, perhaps a quarter have advanced degrees. "That high ratio is a differentiator," he says. "We are viewed as more of a high-science operator than a traditional CRO."

Is UBC done buying other companies? Not likely. Says Leder: "There are still a couple of pieces to come." It sounds like another deal or two may be pending. But our guess is that UBC may be getting closer to what Leder feels is the right size, beyond which its medical-scientific culture might suffer. Says Leder: "I don't want to do anything to dampen that energy and enthusiasm."


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