Pharma Solutions and Services: The Wider Landscape by Jeffrey Smith, Managing Director Given the central role of pharmaceuticals in the single largest U.S. economic sector, and the extent to which the pharma industry is information-driven, the already very active pace of mergers and acquisitions in this area is expected to continue well into the future, creating considerable opportunity for players at every level of the market. There is no economic sector more dependent on information and data, and the technology tools to process that information, than the pharmaceutical and biotechnology industries. While a handful of household names may appear to dominate the space, in reality there are hundreds of companies operating in various niches of this vast market, as well as a soaring rate of new business formations. Companies traditionally identified with healthcare publishing are rapidly migrating into and across this pharma information and technology landscape, thereby redefining the breadth of their businesses within the pharmaceutical and healthcare industries. As established companies expand their focus, and emerging companies build “sticky” customer relationships and generate impressive financial performance, the marketplace is fast becoming a hotbed of mergers and acquisitions activity, with strong, and sometimes, extraordinary valuations being achieved. For companies looking to grow through acquisition, or for shareholders looking to maximize the value of their assets in a sale, it is important to understand the rapidly changing dynamics of this market. The following analysis begins to map the key features of this new landscape. Discovery Informatics The convergence of advanced knowledge management technologies with new data analytics and visualization applications, drug/compound databases, and scientific content enable pharma suppliers to reduce both risk and time-to-market, while improving the safety and effectiveness of new drugs. The Electronic Lab Notebook is the hot new solution in this space, with offerings running from Reed Elsevier’s MDL, CambridgeSoft, and Symyx Technologies, among others. Drug Research and Development A broad range of information, data, technology, knowledge management solutions, and services are leading to end-to-end offerings for the pharmaceutical, biotechnology, and life-sciences industries. Almost 500 companies exhibit at the Drug Information Association annual meeting, reflecting the high rate of new business formation in the sector; many of these companies are supported by steadily growing venture capital/private equity investment. Among these are pharma contract research organizations (CROs), healthcare consulting companies, diversified science media companies, clinical data management providers, and a host of newer, entrepreneurial companies driven by innovation and opportunity. Drug and Disease Databases Attractive, IP-centric companies, such as providers of drug, disease, clinical-trial, physician, managed care, and patient-centric longitudinal databases and information, are a primary focus for active M&A activity. Note IMS Health’s acquisition of PharMetrics, Wolters Kluwer Health’s acquisition of NDCHealth, and Thomson Healthcare’s recent acquisition of Solucient for evidence of the attractiveness of this sector to global information companies. Drug Commercialization The process of bringing new drugs to market has emerged as a significant growth area, with pharma technology and services solutions providers, CROs, healthcare consulting companies, and the diversified science media leaders all very active. Key trends in this niche are evidence-based marketing and sales optimization, with its emphasis on data, science, drug safety, pharmacoeconomics, and sophisticated analysis. Peer-review publications and publications-planning solutions both support and benefit from this trend. Robust new business formation in the pharma commercialization space is expected to continue, with an emphasis on proprietary intellectual property assets: new physician databases; new software analytics; and unique workflow and process solutions. Given the central role of pharmaceuticals in the single largest U.S. economic sector, and the extent to which the pharma industry is information-driven, the already very active pace of mergers and acquisitions in this area is expected to continue well into the future, creating considerable opportunity for players at every level of the market. Berkery, Noyes & Co. LLC, New York, provides strategic transaction management and consulting services for information content and technology leaders. For more information, visit berkerynoyes.com. June 2007 VIEW on Clinical Services

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