Kingsway Seeks to Cash in on Clinical Trials

Kingsway Financial Services Inc. announced it will acquire 95% of the shares of National Institute of Clinical Research, Inc. (NICR) for $7.9 million. The all-cash deal will bring under Kingway’s umbrella NICR’s clinical trial site management and recruitment services.

“NICR combines the use of the latest technologies, streamlined clinical operations, and extensive access to a diverse population to deliver the highest quality clinical trials for life-changing therapies,” according to the companies’ joint press release. “The outlook for the clinical trial site management industry is quite favorable as large pharmaceutical companies are increasingly reliant upon site management organizations, or SMOs, to recruit patients, standardize operations and ensure timelines are met for the clinical trials they sponsor.”

Clinical trials are big business: the National Center for Biotechnology Information lists 472,608 clinical studies at present. These projects are conducted across the U.S. by pharmaceutical/biotech companies, universities, as well as the National Institute of Health and other federal agencies. They range from a handful of participants to thousands, depending on the stage of the study.

Drug Approval Process

Source: 5 Fast Facts about Clinical Trials – Preferred Research Partners

Clinical trials received renewed public attention during the rollout of the Covid-19 vaccines. While typical trials have three phases, Pfizer, Moderna, Novamax, and Johnson & Johnson’s Covid vaccines went right from animal testing to phase III trials ranging from 30,000 participants to 44,000 participants each.

For the versions of the Covid-19 vaccines created for children under 5 years old, Moderna’s trial followed 4,800 children for 2.5 months after their final dose while Pfizer’s trial included 3,000 children, with 33% of those monitored for two months after their final dose. Clinical trials are not required for updates to the vaccines (e.g. the adult bivalent boosters) but nevertheless mRNA vaccines have remained a focus for research with 444 ongoing trials related to the messenger RNA across the globe.

Clinical trials are typically long and expensive. Phase 1 trials usually last for several months, while phase 2 trials last several months to two years as researchers test efficacy and safety over a slightly longer period of time. Finally, phase 3 trials typically last 1-4 years as researchers test drugs’ longer-term effects. Altogether, this means 6-7 years of testing before FDA approval. Then phase 4 is designed to check the drug’s performance in real life scenarios. With so many trials and participants over such long periods of time, many have turned to organizations such as NCIR to manage operations for them – and Kingsway hopes to cash in on this model.

According to Matterhorn’s comprehensive M&A database, which harnesses AI to track current and historical deals, Kingsway is advised by law firm Holland & Knight LLP, while NICR is advised by Sichenzia Ross Ference Kesner LLP and financial adviser Everingham & Kerr, Inc.