Medtech Resonance Health expands global clinical trial reach with Perth-based TrialsWest acquisition

Medical technology firm Resonance Health is banking on its recent purchase of Perth-based TrialsWest, which counts pharmaceutical giant Pfizer among its partners, to expand deeper into the global clinical trial industry. Fresh from announcing the acquisition, Resonance Health chief executive Andrew Harrison told The West Australian there was a “whole lot” of expansion to do with clinical trial sites and research centres worldwide. Resonance Health last week announced to the Australian Securities Exchange it would acquire 100 per cent of Spearwood-based clinical trial site TrialsWest for up to $8 million. “Our strategy is to increasingly participate in the clinical trial ecosystem in Australia and globally,” Mr Harrison, who also founded ASX-listed Capitol Health, said. He said Resonance Health already had a large exposure to global clinical trial businesses, with the company manufacturing medical devices — some of which incorporate artificial intelligence — used in the management of human diseases, as well as by pharmaceutical and therapeutic companies in their clinical trials. Its products include the FerriScan device, which provides an assessment of liver iron concentration using non-invasive MR-based technology. With between 1800 and 2000 clinical trials currently running in Australia, Mr Harrison said it was an exciting time for the industry as more drugs come onto the market. “(In Australia) we have an R&D tax rebate, we have probably what is seen globally as a friendly (clinical trial) ecosystem,” he said. As well as the tax incentive, which allows companies to receive a tax rebate of up to 43.5 per cent on clinical trial-related R&D costs, Mr Harrison said Australia had a diverse and fairly representative population. “And we have a reasonably well-developed private clinical trial system so increasingly clinical trials are getting done outside of public hospitals,” he said. “Public hospitals are obviously overwhelmed after the pandemic so private clinical trial sites like the one we acquired are getting increasingly used.” TrialsWest founding director Helen Pavitt echoed Mr Harrison’s comments, saying there was a “fair bit of interest in clinical trial businesses around Australia at the moment”. She pointed to the recent investment by healthcare-focused Australian private equity group Genesis Capital into Queensland-based AusTrials last July. “I think COVID has done amazing things for everyone’s awareness of clinical research,” she said. “There’s also some companies in the US and Europe who are starting to acquire small trial sites like ourselves to form larger businesses.” Dr Pavitt, along with co-founders Michelle Davies and Peter Bremner, will remain in key leadership roles at TrialsWest for at least the next three years. “We really have some excellent relationships with pretty much all of the big pharmaceutical companies, Pfizer being one of them, GSK, AstraZeneca,” Dr Pavitt said. “We are known to deliver really high quality work . . . what we struggle with though is the size of our business and we probably say no to as much work as what we say yes to.” Dr Pavitt says “the sky is the limit” in terms of what they can achieve under Resonance Health. “We would like to be a multi-site organisation over the next couple of years so that we can be offering clinical trials to a larger number of patients,” she said. “At the moment we’re really only offering trials to people who live in the (Perth) metro area, there’s huge capacity to offer trials to patients who live in rural and remote areas.” The acquisition will comprise of a $4m upfront cash payment, as well as a contingent earnout of up to $4m, based on TrialsWest achieving an EBITDA of $1.3m in a financial period of up to and including the 2026 financial year. Mr Harrison, who started with the company last July, said the TrialsWest acquisition was a “good start to buy something in our own backyard”. “TrialsWest joining Resonance . . . will be the basis of a lot of growth,” he said. “Small businesses like TrialsWest are traditionally constrained by capital and resources, and I think what Resonance brings is a balance sheet . . . we have a large regulatory and quality team, we have a large finance team.” Resonance Health will look to acquire similar businesses across the country in the coming years. The transaction is expected to be completed in the last quarter of the 2024 financial year.