A Silicon Valley investment group has picked Horsham as headquarters for a new healthcare software and data company, Symphony Health Solutions, which it has cobbled together from a series of deals rolling up software firms that track doctors' drug-prescribing habits.
"We have the ambition of buliding a great company. We are growing, and we are hiring," J.T. Treadwell, managing director at Palo Alto, Calif.-based Symphony Technology Group, the new company's owner, told me in a recent interview.
The group employs more than 500, nearly half in the Philadelphia area, most of the rest in Phoenix, Ariz.; San Mateo, Calif.; and at client sites across the country. Symphony Health will add "dozens or scores" as it expands enginerring, sales and services over the next couple of years, Treadwell told me.
Symphony Technology's founder, Romesh Wadhwani, sold his old firm, Aspect Development to a predecessor of today's JDA Technologies for around $9 billion in March 2000, the height of the Internet bubble. His share of the proceeds from that deal enabled him to attract other investors and launch his current career as a tech baron. "We've never lost money on an investment," says Treadwell. The firm's best-known project was IRI, which Symphony bought in 2003 when it was a deflated dot.com competitor of the Nielsen Co. retail (and TV) data firm, and later sold at a $1 billion profit.
Symphony also backs enterprises that focus on digital manufacturing controls and other specialized industries. But it had held back from healthcare. "It's an intimidating space," said Treadwell. "It has a reputation for being slow-moving and we've been cautious."
But since passage of the Affordable Care Act of 2010 - Obamacare - the health data industry "is changing pretty fast, and the commercial models in life sciences are starting to change with it," Treadwell added.
The federal law includes incentives that are supposed to reward doctors, hospitals and drugmakers for tracking and sharing healthcare cost, insurance, delivery and outcome data, all of which is based on data collection, sharing and security: "The amount and quantity of data is going up fast. there is external pressure for change. We think it's going to be a really interesting decade in health care. We want to be part of it."
So in April 2011, Symphony Technology bought a majority share of ImpactRx, a Merck-backed, Mount Laurel-based firm, run by Richard Altus, which collected data on physician prescription patterns. That September, ImpactRx, in turn, bought Horsham-based TargetRx, which had built its own proprietary database of "physician attitudes and behaviors" on drug prescriptions, and put ImpactRx boss Gregory Ellis in charge of the combination.
In March, 2012, the group acquired AlphaDetail, a Phoenix (corrected) - and Horsham-based market-research firm focused on drug sales analysis, and named ceo Rishi Varma executive vice president of the combined companies.
In May 2012, Symphony bought Source Healthcare Analytics LLC, which focused on "physician-level targeting" for drugmakers, from global publishing giant (and Philly-area medical-publisher owner) Wolters Kluwer. Source Health, based in California, had an office in Yardley, Bucks County, which Symphony plans to move to Horsham. "They buy market data and patient data, on an anomymous basis, in the U.S. market," Treadwell said. "It's terrific data on sellthrough of biopharma, medical scrips (and) longitudinal patient claim records. It's uniquiely good market coverage that helps integrate a wholistic view of how physicians see patients."
Wadhwani at the time said he planned to merge the firms into a "high-value, high-impact organziation" that would help drugmakers better target sales and boost profits. In June, he named William Nelligan, an executive at Plymouth Meeting-based IMS Health's U.S. division - a Source Health competitor - as chief executive for the group. (Nelligan has since left: UPDATE). And in October, Symphony said it hired Don Otterbein, head of Business Transformation Services at IMS, as head of marketing, and SunGard Financial Systems executive Jeff Cottle as head of human resources.
There's been enough deals for the moment, Treadwell told me: "We are taking a breather." Once the group is integrated and the sales and engineering forces built up, "we could be talking about many hundreds of millions of dollars of revenue and profitability" that will be attractive to investors and aquirers. It could take a few years to grow to scale. Symphony has the patience, Treadwell says. "Who knows what the buying opportunity will be in five or seven years?"