Cambridge Cognition Holdings PLC (AIM:COG) has struck a deal to acquire eClinicalHealth (eCH), a provider of virtual clinical trials, for up to £1.7mln.
The AIM-listed developer of digital brain health assessments said the purchase would expand its existing virtual clinical trial offering, with eCH providing the digital technology for three of the world's 10 largest pharmaceutical companies under its Clinpal brand.
Based in Stirling, Scotland, eCH has the first end-to-end clinical research platform purpose-built for virtual, hybrid and direct-to-patient studies, according to its website, with patients able to log in from any device and study teams are given “powerful data and analytics across the entire lifespan of the trial”.
With eCH having made revenue of £1mln and reported a loss before tax of £0.3mln, the acquisition is seen as offering the potential to add 5-15% to expected group revenues in 2023 and make “a positive contribution” in 2024.
Cambridge Cognition said the eCH platform is a “patient centric” technology that “enables all the essential steps in a clinical trial”.
This will enhance its capabilities in a virtual clinical trial market that is still emerging but growing rapidly, with more central nervous system (CNS) virtual trials than for any other therapeutic area, according to research from GlobalData.
“The continued rise in virtual trials, and CNS virtual trials in particular, has led us to carefully consider how best to expand our offering quickly to serve this growing market,” said Matthew Stork, chief executive of Cambridge Cognition.
“The acquisition provides Cambridge Cognition the opportunity to capitalise on this market momentum more rapidly than organic development, particularly given eClinicalHealth was identified as a strong technology target.
“The business offers the functionality to make us more competitive in the CNS virtual trials space and opens the wider Cambridge Cognition business to their established client base of major pharmaceutical, medical device and contract research organisations.”
The total consideration for the acquisition will be made up of an initial cash payment at completion of £0.4mln and up to a further £0.8mln of additional cash consideration payable by May 2024.
Payments are to be funded from the company's existing cash resources, which stood at £8.6mln at the end of June.
Up to a further £0.5mln will be settled through the issue of new ordinary shares, contingent on project delivery and commercial execution milestones being achieved.
Completion of the acquisition is expected on 25 October 2022 and is unconditional.