Momentum Clinical Research & PCRN merge to form Australasia's largest integrated clinical trial network

Momentum Clinical Research and Pacific Clinical Research Network (PCRN) have undertaken a merger of equals to create a portfolio of more than 20 sites and a database of over 200,000 participants.

The combination forms Australasia’s largest, most integrated clinical trial network, the companies said, and one that can provide delivery capability from Phase 1 first-in-human to Phase 4 clinical trials.

Momentum was created only a year ago, through the combination of New Zealand’s P3 Research with Australia’s Holdsworth and AusTrials businesses, while PCRN was formed in 2021 through the merger of Lakeland Clinical Trials Group and Southern Clinical Trials Group.

Momentum is majority owned by Australian private equity firm Genesis Capital, while PCRN’s major shareholder is Auckland-based Pencarrow Private Equity. Neither will have a majority in the new capital structure, with ownership shared broadly across the investor base, which also includes various founders and clinicians.

The company said the new structure “ensures alignment and continuity for all stakeholders while enabling the new entity to invest in talent, systems, and infrastructure to support sponsors, investigators, and participants across the full clinical trial journey”.

Momentum specialises in late-phase research while PCRN recently established its Phase 1 capability, meaning the parties are complementary in their practise and have little geographic overlap in their sites.

That means each company will be able to maintain its own brand and operational independence but the joint venture aims to provide a “one-stopshop” for management support functions and customer (or ‘sponsor’) engagement, said Josh Stent, the CEO of Momentum, who will take the top job at the merged entity from September 8. (PCRN chief executive Rosie Mckeller will take a strategic advisory role during the integration period.)

Sponsors are typically either large pharmaceutical and biotech companies or the contract research organisations that typically act as middlemen between them and the clinicians.

Industry growth

As pharma companies increasingly start to cut out the middlemen in that equation, it has become more important for clinical research businesses to have scale and more customer-friendly engagement avenues, said Stent.

The global clinical trials market was estimated to be worth US$81.9 billion in 2023, and is projected to grow to US$153.6b ($259.28b) by 2033, according to Nova One Advisor. The Asia-Pacific region is anticipated to grow at the fastest compound annual growth rate over that 10-year period.

Yet, Stent said, New Zealand and Australia are a few years behind in developing the kind of network that is now prevalent in Europe and the United States – with the latter accounting for 50% of the global market. However, the wave of consolidation is helping bring attention to this market.

Between Momentum and PCRN, there are more than 100 active studies across both Australia and New Zealand and in multiple therapeutic areas, including dermatology, autoimmune disorders, infectious disease, cardiovascular, respiratory, and vaccines.

Even in the short year-long life of Momentum itself, its dedicated team for business development, relationship management, and feasibility scoping has helped to add more research sites and attract research – such as a recent migraine-related study – that wouldn’t otherwise have come to New Zealand.

Stent is bullish on the industry’s ability to become a significant employer and export earner for the country, but noted New Zealand is considered a Tier 3 country in the market while Australia is Tier 2.

While New Zealand has a good healthcare system and access to clinicians and participants, Australia provides a 43.5% R&D tax incentive for Phase 1 studies while only 15% is offered in this country.

Export earner

Asked whether he thought that regulatory settings needed to be changed, Stent said he and other industry players such as New Zealand Clinical Research and Optimal Clinical Trials have had some discussions with New Zealand Trade and Enterprise about tax incentives.

“It’s hard to say whether there’s political will but, certainly from our point of view, it’s an amazing opportunity for New Zealand to be in that conversation in the same way Australia is.”

Stent said about 2% of the New Zealand population have ever participated in a clinical study but about 40% have shown an interest in it.

“When people think about clinical studies, they think about being tested on, if you like, but the benefit … when they’ve got a long-term disease, they get access maybe once a year for 15 minutes to their GP or other.

“What’s incredible about the work that the teams out at our sites do is patients get four or five hours access, once every three months, to people who are experts on their disease.”

Bringing more participants, to be involved in more studies, helps people learn more about a disease no matter whether they’re on the drug or the placebo, he said.

“We think this merger, and being able to invest more money in public awareness for what we’re doing, is going to be a real benefit for Aotearoa.”

In the meantime, Stent is focused on yet another year of integration. The combination of P3, AusTrials, and Holdsworth was more difficult than expected, he said, particularly running the business from this side of the Tasman.

“I think integrating cultures for different businesses across two countries brings some pretty interesting nuances. While New Zealand and Australia are similar in a lot of ways, I’ve had to work pretty hard to establish credibility in Australia. I think, when decision making is coming from New Zealand, it can sometimes feel a little bit distant …

“It’s been a bit of an alignment journey there, but I think we’ve overcome [the issues] and we’re still together. At the end of the day, when you pull it back to what everybody’s trying to achieve – which is the science and getting more participants in through the door – we’ve got pretty nice purpose and alignment around what we do.”

However, asked whether another acquisition was on the cards once this deal had been bedded in, Stent said it was unlikely and that the shareholders were focused on growing organically, with plenty such opportunity across the region.

You’ll find links to all coverage below. 

Josh's interview with National Business Review

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BioTech Dispatch

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MedNews