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Following up on my Pipelines and Patients article from January of 2019, the focus of this article is what Sites must do to become attractive acquisition candidates.

In an effort to provide Sponsors and CROs one stop for their site selection, numerous companies have formed recently that are executing roll-up strategies, acquiring high quality, high enrolling, profitable sites into a newer and better Site Management Organization structure. To be attractive as an acquisition target, and achieve a successful exit for the Site owners and stake holders, Sites must be able to demonstrate a successful history including, but not exclusively, of

  • Quality conduct of clinical trials at the site
  • Successful track record of meeting or exceeding enrollment targets on a majority of trials they conduct
  • Experience and integrity of the key management and staff at the site
  • High profitability as measured by Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
  • Current pipeline of studies sufficient to maintain or grow the revenue of the Site
  • High revenue per Full-time Equivalent (FTE) Direct Clinical Staff (DCS) and
  • High ratio of DCS to all other FTE’s

Many more factors are considered by serious acquirers, so savvy Sites must to be prepared to make their case for why their Site should be included in the top tier of Sites considered for acquisition. At risk is missing out on an exit, expansion, or investment opportunity that you may seek or which may find you in the current acquisition market.

Included in the bestselling business planning book “Anatomy of a Business Plan”i is a chapter I wrote in 2008 titled “Start the Race with the Finish Line in Sight”, in which I highlighted the need to develop an exit strategy as an integral part of creating a business plan. It applies as much today as it did then, and particularly so during this window of opportunity for clinical research Sites.

Starting the race at the finish line means to establish what you want your Site metrics (quality, pipeline, revenue, etc.) to be once you have reached your goal or desired point of exit, or as is commonly referred to in show business as “Ready for Prime-Time”, a decades old reference to TV shows that were of high enough quality to attract large audiences during the coveted “Prime Time” evening broadcast hours. To this day networks only place top rated shows in the Prime-Time slots, just as companies acquiring Sites are only interested in top performing Sites.

Sites wanting to establish high performance metrics find it challenging when there is so little information shared between sites, particularly information that is considered competitive or private, or that is qualitative, rather than quantitative. Sites having close, friendly relationships with other Sites can benefit by sharing information regarding their performance, and even by challenging each other to perform at higher levels, much like the Young Presidents Organizationii (YPO) does for companies in other industries. Absent the opportunity to share information with other Sites, Site owners can use an independent third party who is well versed in Site operations and performance in order to create realistic goals and establish relevant metrics.

Assuming a business plan is created, performance metrics regularly measured, and a Site’s performance warrants the attention of a qualified acquirer, after agreeing on price and terms, Sites must be prepared to work with interested parties to engage in what is called due diligence. During due diligence, the acquirer will request and review financial and operational reports, all significant contracts and employment agreements, Pipeline reports, inspect facilities, assess key personnel capabilities and fit with their organization, make inquiries into the backgrounds of the owners and key management and staff, and more.

Something every seller must understand is that your Site’s value will not increase as a result due diligence; it can only decrease, because the purchase price and terms are agreed to prior to the start of due diligence. Unless you are well prepared, due diligence generally ends with a lower offer or no sale.. Don’t leave due diligence to chance. Acquisitions are always contingent upon successful completion of due diligence and, ultimately, the sole decision of the acquirer as to the whether to complete the acquisition, so advance preparation and attention to detail, while keeping the big picture in sight is critical. While the due diligence process can be time consuming and challenging for the unprepared, it doesn’t have to be painful or complex.

If you are a Site owner and interested in selling your Site during this current window of merger and acquisition activity, I have just one question: Is your Site ready for Prime-time?

If you are interested in learning more about how your site can get “Ready for Primetime”, please contact John Neal on LinkedIn or here.


i Linda Pinson, Anatomy of a business plan: a step-by-step guide to building a business and securing your company’s future, Out of your Mind and Into the Marketplace, 2008

ii Young Presidents Organization,, 2019