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Curewell debuts with investment in AMR

Sarah Pringle
Mar 15, 2022
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Illustration: Eniola Odetunde/Axios

Curewell Capital, launched by Pritzker Private Capital’s former healthcare team, is acquiring a majority stake in the Alliance for Multispecialty Research (AMR), the parties tell Sarah exclusively.

Zoom in: Curewell is partnering with the clinical research site company's management team, led by founder and CEO Bill Smith, while appointing former LabCorp CEO Dave King, a Curewell operating partner, as AMR chairman.

  • The parties declined to comment on terms of the transaction, but sources tell Sarah the deal commanded a valuation in the low $300 million range, equating to around a 12x to 13.5x normalized EBITDA multiple.
  • The investment is the first for Curewell, launched by Michael Dal Bellow and Ceron Rhee, who recently transitioned into adviser roles at PPC after several years on the investment team. Curewell, a growth-oriented health care-focused firm, has not yet raised a fund.
  • AMR, based in Knoxville, Tennessee, started as a co-op for shared practices for clinical research centers in 1994; In 2017, 16 of its member research sites joined forces to create what is now AMR.
  • Fairmount Partners advised AMR on the transaction.

Be smart: Contract research organizations (CROs) have professionalized and scaled over the last several years, calling for the clinical research sites they partner with to do the same.

  • CROs gain efficiencies and cost-savings by working with high-performing clinical site organizations, and scale lends to additional benefits, Smith tells Sarah.
  • Scale brings a larger database of eligible patients for studies (which means that you have to recruit fewer participants), expansion of therapeutic expertise, integrated relationships with CROs, as well as greater access to patients when trials require a specific geographic concentration, King elaborates.
  • “To me, we’re on the verge of an explosion of innovation in pharma services, and as we go up that arc of more products, more R&D dollars, more mRNA therapies, we have to recruit more patients [for clinical studies],” King says.

Yes, and: The pandemic environment has underscored the role of clinical site organizations.

  • "With covid trying to manage these large collections of sites, people recognize that it’s so much more efficient to go to those with scale," one source told Sarah previously.

What’s next: With the backdrop of a robust R&D pipeline, Curewell's backing will “allow us to partner with a lot of sites that we would have not have otherwise considered," Smith says.

  • Curewell's capital injection will turbocharge AMR's organic growth and acquisition playbook to meet that increasing demand.
  • Studies that were delayed in 2020 and 2021 are now starting to be initiated, Smith adds.
  • AMR has completed 7,800-plus trials with over 160,000 study participants, and has been growing at a 30%-plus clip annually.

State of play: Private equity firms are driving consolidation at site management organizations for clinical research, many of which didn't exist five years ago.

  • PE-based clinical research site companies include GHO Capital's Velocity Clinical Research, Linden Capital Partners’ Evolution Research Group, KKR‘s Headlands Research and Webster Equity Partners‘ CenExel.
  • GHO bought Velocity last year in a deal valued at around $500 million, while Webster subsequently explored a sale of CenExel, Sarah wrote.

What we're watching: Will more CROs (like PPD and Icon) start buying site companies as they scale, or will they question if they can remain independent? If so, might we see larger clinical site groups start to pick up some CRO skills like biostatistics and protocol design?

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