The impending addition to Oracle's Health Sciences division makes a SaaS-based integrated research suite to help manage drug trials.
Oracle said Friday it will buy Phase Forward, a provider of applications for life sciences companies and healthcare providers, in a cash deal worth around $685 million.
In a statement, Oracle said the acquisition is consistent with its strategy to add complimentary assets to its Oracle Health Sciences division. The company also predicts that Phase Forward's SaaS-based integrated clinical research suite which manages clinical development Phase 1 clinical trials through regulatory submission to post-approval monitoring, will help Oracle's life science customers more effectively capture, access, and share data securely.
"It's a little bit of a surprise, but as one begins to look at it, this is a pretty good opportunity for Oracle," said Alan Louie, research director at IDC Health Insights.
According to Louie, the life sciences industry has been moving toward a more comprehensive interconnected e-clinical solution. Customers want technology that connects the different e-clinical segments such as data capture, clinical trial management systems, and safety management processes.
"Oracle has market-leading clinical data management systems, they have market-leading clinical trial management systems with Siebel clinical, but their front-end electronic data capture solution, Oracle RDC, is not what one would define as best-of-breed," Louie said.
"Oracle's purchase of Phase Forward provides the database giant with access to InForm, an electronic data capture solution which is among the best in the industry," Louie said.
Other advantages for Oracle, according to Louie, include acquiring Phase Forward's interactive voice response technology, its clinical trial design tools, and its FDA electronic submission platform.
Mark Bowker, analyst at Enterprise Strategy Group, said the purchase puts Oracle in a better position to capture healthcare and life sciences IT dollars.
"Sixty'-seven percent of health care organizations will increase IT spending in 2010, driven by compliance and security requirements. Billing and business intelligence are top application priorities," Bowker said. "Phase Forward has the potential to help Oracle further demonstrate its value where decisions are being made -- at the clinician level and not from a technology perspective like many may be fooled into thinking," Bowker adds.
"The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation," Neil de Crescenzo, senior VP and general manager, Oracle Health Sciences said in a statement. "Phase Forward brings outstanding products and employees with significant expertise to Oracle that will help enable the delivery of personalized medicine and value-based healthcare."
In a letter posted on Oracle's Web site, Crescenzo also said Phase Forward's management and employees will join Oracle as a part of the Oracle Health Sciences global business unit, ensuring the continuity of products and services delivery for Phase Forward customers. The transaction is expected to close in mid-2010.