Riverside backs Australia clinical trials business
The Riverside Company has acquired Avance Clinical, an Australia-based contract research organization (CRO) with a view to building out its clinical trials business.
It is the second private equity investment in Australia’s clinical trials space in a fortnight, following The Blackstone Group’s purchase of Nucleus Network for a reported sum of A$600 million ($450 million). That deal facilitated an exit for Crescent Capital Partners.
The country has emerged as an attractive location for international clinical trials, with substantial research talent and infrastructure, high scientific standards, and strong intellectual property protection. TPG Capital-owned Novotech is a notable success story in the space, having helped cultivate the China-Australia corridor. It is said to be targeting a Hong Kong IPO.
Avance claims to be the largest CRO in Australia focused on international biotech companies. It works with clients in the early phases of drug development, running trials across Australia and New Zealand. The business has been in operation for 24 years and completed more than 195 studies involving 10,000 participants.
Avance has also expanded its reach into clinical trials for vaccines and genetically modified organism (GMO) therapies, having become an accredited gene technology CRO. Riverside will support regional and international expansion, both organically and through M&A.
Nick Speer, a partner at Riverside, noted in a statement that “Australia is the global destination of choice for early phase and increasingly later phase clinical trials.”
The industry employs 8,000 people and contributed A$1.4 billion to Australia’s economy in 2019, according to MTPConnect. COVID-19 lockdown measures and social distancing restrictions led to some companies putting up to 90% of their trials on hold in 2020, and the number of trials launched fell to 1,640. However, activity rebounded as the year progressed.
Riverside makes buyout investments towards the smaller end of the middle market. The firm’s first two Asia-focused funds were pan-regional, but the third is dedicated to Australia and New Zealand. Riverside Australia Fund III reached a second close of A$261 million – against a target of A$350 million – in mid-2020.
Recent investment activity includes the acquisition of Nabenet, an Australia-based injury management and occupational rehabilitation services provider. It is part of a workplace wellbeing rollup strategy.
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