Ricerca Biosciences Expands into Preclinical Sector

The contract research and drug-development organization Ricerca Biosciences LLC (Concord, Ohio) recently expanded its capabilities through the acquisition of the discovery and preclinical business of MDS Pharma Services, a deal completed in March 2010. With the acquisition, Ricerca is positioned as a full-service partner in clinical research and drug-substance development and manufacturing and support services for formulation development. The MDS acquisition also gives the US-headquartered company its first assets in Western Europe and Asia.

With the acquisition of the discovery and preclinical business of MDS Pharma Services, Ricerca gained facilities in Bothell, Washington; Lyon, France; and Taipei, Taiwan. The acquisition also added 600 employees to Ricerca and increased the company’s total staff to 850.

The move expanded the company’s global toxicology activities to allow coordination of projects between North America, Europe, and Asia and increased access to active pharmaceutical ingredient (API) synthesis and process development for investigational new drug (IND) applications in North America and Europe. The move also expanded and enhanced the company’s drug, metabolism and pharmacokinetics (DMPK) service and efficacy models, broadened the company’s pharmacological profiling services to include molecular, cellular, tissue and in vivo assays of development candidates and enhanced its lead-optimization services. The acquisition also allows the company to provide radiolabeled compound synthesis on a worldwide basis.

The key impetus behind the acquisition, according to Ian Lennox, chairman and CEO of Ricerca Biosciences, was to expand the company’s capabilities in drug development. “The MDS Pharma Services pharmacology/DMPK business is perfect fit in terms of client needs,” says Lennox. “As a contract research organization, I don’t agree with buying more of what you already have in this market. Looking at the MDS acquisition and Ricerca’s capabilities in terms of a Venn diagram, the service and client overlap in our two organizations is very limited, and where it does overlap, there is geographic diversity of North America and Europe.”

He points out that the facilities in Bothell (50,000 ft ²) and Taipei (50,000 ft ²) gained in the acquisition provide early-stage pharmacology/DMPK services. The 190,000-ft ² facility in Lyon offers drug-safety assessment (i.e., toxicology) services and will provide a model for the company’s operations at the Concord facilities. “One leverage area by next year is to enhance our North American drug-safety assessment at the Concord site by using the Lyon learning curve,” says Lennox.

With the acquisition, Ricerca also expands its client base by sector and geographically. Prior to the acquisition, roughly 85% of the company’s business was in North America. Approximately 80% of its clients were biotechnology and mid-sized pharmaceutical companies, 10% were from Big Pharma, and 10% were specialty pharmaceutical companies or other client types. Following the acquisition, Ricerca’s client base is now approximately 50% from the biotechnology sector, 35% from Big Pharma, and roughly 15% from specialty pharmaceutical companies and other companies. Its geographic client distribution is now roughly 60% North American, 30% European, and 10% Asian.

Lennox emphasizes that the MDS acquisition expands the company’s offerings in the drug-development spectrum. “This acquisition is a perfect fit in that it brings in the front end, which the pharmacology and DMPK attracts the clients at an earlier stage,” he says. “In the nonclinical space, clients like to bundle capabilities immediately into chemistry and drug-safety assessment, so that’s a very nice fit.” On the API side, Ricerca offers medicinal-chemistry capabilities in the US and Asia, kilo-laboratory API production, process research and analytical stability testing, as well as manufacturing of APIs up to ton quantities for clinical and commercial use.

Lennox says the company will focus on leveraging the MDS acquisition and growing organically and does not have any immediate plans for further acquisitions. The one potential area that Lennox says the company may be interested in augmenting is its presence in analytical chemistry and formulation development. “I’ll look to partner and explore that area. It would be a natural piece that missing from our equation,” he said.