Oracle said Friday it will acquire Phase Forward, a healthcare and life sciences software provider, for $685 million. Oracle, which is intensely focused on vertical-specific applications, said the deal will bolster its healthcare software line-up.
Phase Forward's software is delivered as a service. The company's Integrated Clinical Research Suite manages the drug submission development and safety processes from trial to submission to the Food and Drug Administration and other authorities. Anyone that has ever followed life sciences knows the FDA submission process can be a bear to manage.
Oracle paid $17 a share for Phase Forward, which closed Thursday at $13.08 a share. Oracle paid a 30 percent premium for Phase Forward. And why not? Phase Forward can position Oracle nicely for the health care IT boom. Meanwhile, Phase Forward was showing some strong growth. In 2009, Phase Forward delivered revenue of $213.3 million, up 25 percent from 2008. Net income was $8 million. Simply put, Phase Forward will be a nice growth engine for Oracle's health care unit.
Phase Forward's software covers everything from clinical data management to study controls to late phase data capture to safety, supply chain and information management procedures. Here's the diagram of Phase Forward's suite (statement):
As for Oracle, Phase Forward's software---deployed in more than 10,000 clinical trials---will be lumped into its health sciences unit, which targets researchers, clinical development folks, doctors and regulators. It also doesn't hurt that the recently passed health-care bill will push the use of electronic medical records and a bevy of IT systems behind the scenes.
Indeed, Oracle was already positioning Phase Forward for the healthcare IT land rush. In a letter to customers, Neil de Crescenzo, general manager of Oracle health sciences said:
The life sciences and healthcare industries continue to focus on improving patients' health and medical outcomes while addressing the cost of healthcare. With Phase Forward, Oracle expects to help health sciences customers better capture, access, manage and share clinical and medical data. Customers are expected to gain greater insight into patient outcomes during drug development and while providing healthcare services. The combination of Phase Forward and Oracle products is expected to accelerate the delivery of innovative therapies to patients and help control healthcare costs.
de Crescenzo added that Oracle will benefit from the Phase Forward expertise and SaaS offerings.
Oracle said the deal will close in the middle of the year.