Bio-Imaging Technologies bids for growth with acquisition of etrials

Major pharmaceutical companies may hog the spotlight when it comes to drug development, but a lot of what they once did in-house a generation ago is now outsourced.

So there are lots of companies in the region that feed off the huge drug industry. One is Bio-Imaging Technologies Inc., a Newtown provider of clinical trials services.

Yesterday, the company, which is in the process of changing its name to BioClinica, said it would acquire a North Carolina services firm called etrials Worldwide Inc. in a cash-and-stock transaction valued at about $10 million.

Both are small publicly traded companies. Bio-Imaging is the bigger of the two with 2008 revenue of $69.1 million. Etrials’ revenue was $16.2 million.

If completed, the acquisition would increase Bio-Imaging’s presence in providing “electronic data capture” services, which replaces the paper notebooks often used to collect data generated during the clinical trials of new medicines.

At nearly $1 billion, electronic data capture is a bigger market than Bio-Imaging’s core business of medical imaging management, said president and CEO Mark L. Weinstein.

Bio-Imaging expanded into that business when it bought King of Prussia’s Phoenix Data Systems Inc. in a $24-million deal in March 2008. Adding Phoenix Data’s 127 employees increased Bio-Imaging’s workforce to 474.

Absorbing etrials’ services and 100 employees in the Raleigh area to what is now Bio-Imaging’s eClinical Services Division gets it closer to the “critical mass” Weinstein believes is important to land business from all but the biggest drug companies.

Of the 30 firms Weinstein considers electronic data capture competitors, only Phase Forward Inc., of Waltham, Mass., and Medidata Solutions Inc. , of New York, will be bigger than Bio-Imaging.

The transaction involves a tender offer, which is expected to expire on June 15. Etrials’ shareholders would get 0.124 shares of Bio-Imaging common stock, 0.076 shares of Bio-Imaging preferred and 15 cents in cash for each share of etrials. The offer values etrials at 90.68 cents per share.

Shares of Bio-Imaging closed yesterday at $3.99, up 16 cents, or 4 percent. Etrials rose 5 cents, or 7 percent, to closed at 76 cents.