Fast Breakup?  Quintiles IMS may sell contract sales arm

Fast Breakup? Quintiles IMS may sell contract sales arm

Fast Breakup?

Quintiles IMS may sell contract sales arm

In October 2016 two major healthcare research firms, Quintiles and IMS, merged into a $19 billion behemoth with 50,000 employees. While IMS was actually the larger company, Quintiles’ name was put first, and its New York Stock Exchange symbol, $Q, was retained.

QuintilesIMS, a Fortune 500 company and the world’s largest provider of biopharmaceutical development and commercial outsourcing services, conducts business in about 100 countries. It is the world’s largest contract research organization as ranked by reported service revenues and is focused primarily on Phase II-IV clinical trials and associated laboratory and analytical services.

The merger has not helped the new company’s contract sales unit, Integrated Engagement Solutions, and QuintilesIMS is considering the sale of this division. The transaction would be handled by Wall Street firm Goldman Sachs with an asking price of $1 billion, far exceeding the company’s worth.

While Integrated Engagement Solutions earned $80 million last year, those earnings represented a 10.9 percent decline from 2014 to 2015 – and the unit is dragging down the financial health of its parent company. As pointed out by Eric Sagonowsky in Fierce Pharma, “The deal talks come as pharma increasingly looks to sell its meds through internal teams, putting pressure on contract outfits. Last year, AstraZeneca cut 1,600 contract reps amid a big push to reduce costs. Later in the year, contract reps were among those to lose their work at Endo.”

Jason Monteleone, writing in Pharma Finance, reported that the earnings before interest and taxes (EBIT) of two other QuintilesIMS branches, Commercial Solutions and R and D Solutions, were each running over 26 percent so far for 2017, while the EBIT for Integrated Engagement Solutions is less than 10 percent. The EBIT for the whole company would grow nearly 2 percent with the divestment of Integrated Engagement Solutions.

Experts believe that the company is seriously overvalued and will not sell for anything close to the asking price. Meanwhile, according to Monteleone, Quintiles has “done a nice job of protecting profitability during this revenue decline.”

The company is continuing to provide new products. According to Melissa Fassbender, writing on the website Outsourcing-Pharma.com, healthcare research giant QuintilesIMS has just unveiled a new pharmaceutical SaaS software package to be called Orchestrated Customer Engagement (OCE). It will reach the market by winter.

“Our customers challenged us to find a way to break down the operational silos pharma is known for, and present them with a consumer-like application that their employees would actually enjoy using,” said Richie Etwaru, chief digital officer of QuintilesIMS.

This software will enable clients to engage in marketing, customer relations and medical issues in a coordinated way. It will allow them to perform these functions more efficiently.

“OCE modules are born-integrated, so that commercial functions don’t just coordinate; they collaborate,” Etwaru added.

With the OCE software, clients will be able to use QuintilesIMS’s artificial intelligence feature, “Ada,” which can provide ongoing, real-time advice for a variety of commercial needs. OCE will also include two QuintilesIMS software interfaces, “Apollo” and “Lexi.”

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