Management technology outsourcing and consulting service
) recently agreed to take over Octagon Research Solutions Inc., a
reputed software solutions provider for the life sciences sector.
Financial terms of the buyout remained undisclosed. The deal is set
to be completed in two months, pending regulatory approvals.
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Founded in 1999, Octagon provides clinical and regulatory
information management solutions to pharmaceutical firms. The
company helps the pharma industry market new drugs faster by way of
eliminating redundant processes of drug development. The solution
helps in prompt clinical data collection as well as submission of
results for fast regulatory approval.
Of late, Accenture was noticing increasing demand for solutions
that could effectively reduce drug development life cycle, time to
market as well as cost. Management believes the acquisition to be
timely and hopes to meet the surging demand as soon as the new unit
is completely integrated into its life sciences industry group.
The drug development lifecycle is a complicated and lengthy process
and it might take years to market a drug. The lifecycle involves
hundreds of people, drug testing procedures, and above all, high
financial risks. Therefore, the longer the process, the higher the
financial risks associated with it. Hence, pharma companies often
have to rely on outsourcing service providers, such as Octagon, to
make the task of marketing a drug faster and easier.
With Octagon, Accenture will boost its exposure into the life
sciences sector, which will allow the company to secure large deals
from its existing customers and acquire new ones. Reportedly, in
its last quarter, Accenture's Product segment delivered high
single- digit revenue growth with major contributions from life
sciences industry group.
We are encouraged by the steady flow of new business and believe
that the trend will continue given Accenture's rich industrial
experience. However, increasing competition from
), a strained spending environment and Accenture's broad European
exposure (roughly 40.0%) may temper its growth prospects to some
Currently, Accenture has a Zacks #3 Rank, which translates into a
short-term Hold rating.