Durham’s Fortrea to divest two businesses for $345M

Fortrea, a global contract research organization (CRO) that was spun off of Burlington-based Labcorp in 2023, will divest two of its businesses to focus more on supporting clinical drug development in phases 1 through 4.

Fortrea, headquartered in Durham with about 18,000 employees in over 90 countries, announced it has signed a definitive agreement to sell its Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners, a New York private equity firm, for $345 million.

The transaction is targeted to close in the second calendar quarter of 2024, subject to customary closing conditions and regulatory approvals, as well as the parties entering into certain services and operating agreements. The agreement calls for $295 million to be paid at closing and $50 million to be paid upon achievement of certain transition-related milestones.

“Today marks a significant milestone in Fortrea’s ongoing journey, as we sharpen our focus on organically growing as a pure-play CRO, with added financial flexibility,” said Fortrea Chairman and Chief Executive Officer Tom Pike. “After undertaking a strategic review of our business, divesting Endpoint and Fortrea Patient Access aligns with the interests of our customers.”

Endpoint operates in the high-growth eClinical market as a provider of Randomization and Trial Supply Management (RTSM) solutions to biopharmaceutical and CRO customers with expertise in serving complex and late-stage clinical trials. Over the last 15 years, Endpoint has supported more than 1,750 clinical trials involving 875,000 patients across 90 countries.

Fortrea Patient Access operates in the Hub services and patient access market, serving the biopharmaceutical industry with comprehensive patient support, product access, affordability and adherence solutions. (Hub allows a drug manufacturer to have a single point of contact with patients who use their therapies, providing better and more comprehensive patient services.) Fortrea Patient Access supports more than 2.5 million patients and over 100 drug brands across more than 25 disease indications.

“I am excited for this next chapter for Endpoint and Fortrea Patient Access,” said Sam Osman, president of Enabling Services at Fortrea, who will serve as the CEO of both businesses with Arsenal. “These businesses will be distinctively positioned to effectively manage the patient journey across clinical trials and into commercialization by driving patient access and adherence for approved therapies.”

Gene Gorbach, an investment partner of Arsenal, said, “Endpoint and Fortrea Patient Access have a proud, decades-long track record of market leadership in supporting clinical research and commercialization of innovative therapies. Arsenal takes pride in building organizations that meaningfully improve healthcare. We are excited to partner with management and employees to accelerate the growth of these two businesses.”

Dimitris Agrafiotis, Ph.D., director of digital, analytics & AI at Arsenal, said, “Endpoint and Fortrea Patient Access provide essential solutions that enable patients’ participation in clinical trials and access to therapies. I am delighted to support the talented team at Endpoint and Fortrea Patient Access. Together, we will further enhance the sophistication of technology capabilities that underpin these companies’ commitment to delivering the highest quality services to the pharmaceutical industry.”

Arsenal specializes in building market-leading industrial growth and healthcare companies. Since its inception in 2000, the firm has raised institutional equity investment funds totaling over $10 billion, completed more than 290 platform and add-on acquisitions, and achieved more than 35 realizations. 

Fortrea, a publicly held company, generated about $3.11 billion in revenue in 2023. It has three decades of experience in the CRO industry spanning more than 20 therapeutic areas.