ICON Pays $12B for Raleigh CRO PRA Health Sciences

Raleigh-based contract research organization PRA Health Sciences has agreed to be bought by ICON plc, a large Irish contract drug and device developer.

The cash and stock deal is worth about $12 billion. Under its terms, ICON will pay PRA stockholders $80 in cash and 0.4125 shares of stock for each share of PRA they own. This is roughly a 30% premium over PRA’s closing price on Tuesday, February 23. 

The deal should be completed in the third quarter of this year, with a 66% to 34% ownership split. ICON shareholders will hold the majority shares.

The combined company will be located in Dublin, ICON’s current headquarters. 

ICON said the transaction brings together two innovative and growing contract research organizations with similar cultures and a shared focus on high quality, efficient clinical trial execution – from phase 1 to post-approval studies. The new business will be number one or two in key clinical market segments, ICON noted. And it will  have strategic partnerships with a majority of the top-20 biopharmaceutical companies.

 “The combined company will create a new paradigm for accelerating clinical research and bringing new medicines and devices to market,” said Steve Cutler, Ph.D., ICON’s CEO. “With broader and deeper operational scale, combined with innovative technology and real world data solutions, we will enable all customers to reduce their development time and cost.”

Cutler will continue as CEO. PRA’s current chairman and CEO, Colin Shannon, will be appointed to the board of directors along with one other board member from that company.

“I joined PRA 13 years ago to help build a company that would make a difference in the world and transform the way we developed new medicines,” Shannon said. “The way we do it now takes far too long and costs too much. Critically ill patients can’t wait for cures,” he added. ‘The union of PRA and ICON will create an organization that has the people, data and technology to bring those cures to patients faster and more efficiently than ever before.”

Founded in 1982, PRA is one of the largest contract research organizations in North Carolina, a state rich in them. A total of 155 CROs and testing companies provide close to 25,000 jobs for North Carolinians. They offer a wide range of services to pharmaceutical, biotech, and medical device companies and research organizations.

PRA is considered the fifth largest CRO by revenue, providing outsourced clinical development and data solution services to the biotechnology and pharmaceutical industries. The company reported income of nearly $3.2 billion last year.

Its global clinical platform includes more than 75 offices across North America, Europe, Asia, Latin America, Africa, Australia and the Middle East. 

PRA has approximately 19,000 employees worldwide. That includes 600 in North Carolina –  according to data compiled by Triangle Business Journal. Forbes has PRA on this year’s list of America’s 500 best employers, where the company ranked 168th . 

ICON also has a significant presence in the Tar Heel state, employing about 400 people in the Research Triangle. The company has a total of approximately 16,000 employees in 93 locations across 41 countries. 

ICON provides outsourced drug and device development and commercialization services to the pharmaceutical, biotechnology, and medical device industries, as well as to government and public health organizations. Slightly smaller than PRA, ICON reported $2.8 billion in revenue in 2020. That reportedly puts it sixth on the list of largest CROs.

“North Carolina is well known for its strong clinical research cluster, which enjoys significant contributions from both ICON and PRA,” said Doug Edgeton, president and CEO of the North Carolina Biotechnology Center.

“Companies developing new medicines all over the world are working with our clinical research organizations to get these drugs to market quickly and safely. We count nearly 25,000 employees statewide in this space. These jobs have also grown by 3% in each of the last two years, according to our Life Science Intelligence team. We are disappointed to lose a headquarters to another location, but despite consolidation overall for these companies, life sciences jobs are growing in North Carolina.”