Astrategic alliance announced less than a year ago has led to a major in the health care andresearch space.
andQuintiles in October 2015 said they signed an alliance to help change the waybiopharmaceutical companies create real-world evidence and apply insights inclinical research. The collaborative effort would hasten assessments of howwell certain treatments work and improve patient outcomes, the companies saidat the time.
Sincethe two companies came together as part of that initiative, they recognizedthat they have a shared strategic vision, said Quintiles CEO Thomas Pike. IMSHealth and Quintiles on May 3 announced a plan to combine in an all-stockmerger of equals that values the combined companies at an enterprise value ofmore than $23 billion.
Pikesaid during a conference call to discuss the deal that the two companies haveseen very strong demand from clients for their joint offerings. IMS HealthChairman, President and CEO Ari Bousbib, who will lead the combined companyafter the deal closes, said the two companies on their own had certaindeficiencies that the merger will address. When his company conducts evidencestudies, for instance, it relies on studies of its anonymous patient databases.Quintiles, on the other hand, mostly bases its studies on primary research,Bousbib explained.
"Weplug the holes when we are together," he said.
Thebusinesses that each company is involved in will not change after the merger,according to Bousbib. While the alliance served its purpose, the two businesseswill simply work better when they are put together under one company, he said.The merger is projected to yield annual run-rate cost savings of $100 millionby the end of year three. Executives on the call did not provide additionalspecifics on potential synergies, but Bousbib is "very confident" inachieving the $100 million run-rate cost savings figure, saying the companieshave "high visibility" on that number.
Uponthe deal's closing, expected to take place in the second half of the year, thecompany will be renamed Quintiles IMS Holdings.