Medco Health Solutions, Inc. and United BioSource Corporation today announced a definitive agreement under which Medco will acquire closely held UBC in an all-cash transaction valued at approximately $730 million. The combination of America’s leading advanced pharmacy with one of the world’s most respected sources of post-approval drug and device research extends Medco’s core capabilities in data analytics and research to further accelerate pharmaceutical knowledge – advancing patient safety and furthering evidence-based medicine.
With anticipated 2010 revenue of approximately $280 million, and with an annual growth rate of more than 20 percent, UBC is a leader in serving life sciences industry clients focused on developing scientific evidence to guide the safe, effective and affordable use of medicines. UBC is an information services business whose initiatives revolve around safety and risk management, as well as health economics and outcomes research, and have included large prospective safety studies, risk evaluation and mitigation studies (REMS), cost-benefit and cost-effectiveness evaluations, budget-impact modeling, and epidemiologic studies among the broad suite of services that it brings to its clients. UBC has the capacity to conduct post-approval research in strategic locations worldwide including the U.S., Europe, and Japan.
“To meet the three main objectives of national healthcare reform – improving quality and reducing costs in order to extend access – it is more critical than ever to ensure that our use of medicines is driven by scientific evidence and proven economic value. The acquisition of UBC represents Medco’s ongoing commitment to provide innovation and value in healthcare, extending our global footprint into the areas of health information technology, information services and research,” said David B. Snow Jr., Medco Chairman and CEO. “UBC’s products and services broaden the Medco portfolio consistent with our core mission of making medicine smarter through the generation, translation and application of evidence critical to the delivery of high-quality, cost-efficient care that improves patient outcomes.” The transaction, which will be funded through Medco’s free cash and existing debt facilities, is subject to customary regulatory approvals and is expected to close in the third quarter of 2010. The new business is expected to be slightly accretive to Medco shareholders in 2011, excluding one-time items and amortization.
“At UBC, our scientists are focused on delivering actionable evidence to guide the safe and effective use of biopharmaceuticals and enhance the quality and value of health care. The focus on evidence, value and real-world effectiveness research will remain a core focus of the UBC business,” said Ethan Leder, UBC CEO, who founded the company in 2003 with President and CFO, Mark Clein. “Medco provides our team of industry-leading experts with an array of exciting new resources to accelerate growth, including opportunities to collaborate with its clients and contribute to the mission of delivering the right drug to the right patient at the right time.” Upon closing the transaction, UBC would become a wholly-owned subsidiary of Medco that will be run independently from Medco’s core business to ensure compliance with contractual requirements and client expectations.
“Prior to this transaction, we completed several meaningful studies with our clients to evaluate the impact of emerging technologies on health outcomes,” said Dr. Robert Epstein, Medco’s chief medical officer and president of the Medco Research Institute. “Based in strategic locations worldwide, the 1,500 employees of UBC have created a powerful, complementary engine for more rapidly advancing clinical insight, discovery and innovation in the areas of safety, economics and outcomes research. We are thrilled to have UBC join Medco in the pursuit of generating practical real-world evidence to inform clinical decision-making.”