Mercury takes 30% stake in Australia's Novotech

According to The Wall Street Journal, Mercury also has the option to raise its stake to 50% at a later date. Novotech runs clinical trials on behalf of drug developers who need to prove the efficacy of new treatments. Regulators, such as the US Food and Drug Administration (FDA), use data from these trials to decide whether to allow certain drugs to be distributed and sold to patients.

"There's a strong trend of major pharmaceutical companies outsourcing, which has led to underlying annual compound growth in the market of between 5% and 10%," said Clark Perkins, founder of Mercury. "Novatech is growing much faster than this."

Novotech was established in 1996 and has operations in eight countries: Australia, New Zealand, Singapore, India, Malaysia, Thailand, Taiwan and South Korea. Most of its revenues currently come from its Australasian operations, although Asia is a high-growth market as healthcare spending increases along with demand for new drugs.

Novotech's founder and chief executive Alek Safarian owns 65% of the company, while staff own a combined 5%.

This is the third investment from Mercury's maiden fund, which reached a hard cap of A$120 million ($124 million) in 2010. It focuses on businesses with enterprise values of A$30-120 million.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Healthcare
• Investments
• Australia
• healthcare
• Pharmaceuticals
• Growth capital