Sector: Biopharmaceutical Supply Chain
Investment Date: 2016
Description: Clinical Trial Supplies Management
Status: Acquired by Clinigen in 2018
Headquarters: Malvern, PA
Clinical Supplies Management ("CSM") was founded in 1997 by Dr. Gerald Finken, Ph.D., a pharmacist and entrepreneur. CSM had grown from a niche provider of drug returns and reconciliation (the final stage in the clinical trials supplies life cycle), to a full service solutions provider managing the complete spectrum of a pharmaceutical company’s clinical trial needs (drugs, placebos, supplies, randomization, etc.). When Gerald first met with Great Point Partners, the Company was experiencing 25% annual growth as he had boot-strapped the business and re-invested profits in the Company's infrastructure and in expanding its “just-in-time” delivery capabilities. It was the most significant independent clinical trials supplies company focused exclusively on specialty pharmaceutical and biotechnology clients.
Through conversations with CSM's management, it became clear that a European physical facilities presence would be essential for its continued growth as it strived to increase wallet share with current customers and compete against larger companies. Historically, CSM was able to serve its clients in U.S.-only Phase II and Phase III trials, but since CSM did not have a facility in Europe, it was unable to fully service the majority of global Phase III trials that are typically conducted jointly in the U.S. and Europe. Additionally, larger clinical packaging businesses had not focused on flexible and high touch service and tended to favor large pharma customers, leaving mid-size biotechnology and specialty pharmaceutical companies with poor service and low customer satisfaction. This created an enormous opportunity for additional growth, but also the need for growth capital.
How Great Point Partners Helped
CSM was impressed by Great Point Partners’ knowledge of the clinical packaging industry, tuck-in acquisition sourcing capabilities and its $600 million public equity life sciences fund, which had invested in and maintained CEO and CFO-level relationships with several hundred biotechnology companies. CSM partnered with Great Point Partners in late 2016 to embark on an accelerated growth strategy and to provide partial liquidity to the Founder. Given the Founder’s desire to expand CSM's footprint into Europe, Great Point Partners helped the Company source and execute two European acquisitions within the first four months of the investment. Theorem Clinical Supplies, based in Frankfurt, Germany, was sourced by Great Point Partners through a London business broker and was acquired in December 2016. In January 2017, CSM acquired the B&C Group, based in Brussels, Belgium. B&C had collaborated with CSM in the past on a small number of joint U.S.-Europe trials. As the Company began to scale globally, Great Point Partners also helped CSM’s Founder and Owner transition to Chairman of the Company by recruiting Scott Houlton, former President of Catalent’s Clinical Services division, to lead CSM in its next phase of growth.
In under two years of ownership, CSM tripled its revenue by expanding its geographic footprint to Europe through two acquisitions completed within three months of Great Point’s initial investment. The tuck-in acquisitions created a global company capable of serving customers conducting global Phase III trials and significantly increased the company’s rate of growth above its historical average.