Healthy merger for SDI, Verispan

The pharmaceutical industry garners headlines in the Philadelphia area, but there are other kinds of companies that feed off that business.

Health-care analytics firms are one type. On Tuesday, two local providers of information to the drug industry said they’d merged as of Monday.

SDI, of Plymouth Meeting, bought Verispan L.L.C. of Yardley, for an undisclosed amount. SDI CEO Andrew Kress said that Philadelphia’s LLR Equity Partners, which just raised $800 million for its new fund, supplied the capital for the transaction.

With 200 employees, SDI is the smaller of the two private companies. Verispan has about 500 workers.

You’ve probably never heard of either of them, unless you’re the type of person who wants to know which drug company psychiatrists hold in high esteem. (That would be Eli Lilly, according to Verispan.)

But you may have heard about, a Web site operated by SDI that offers allergy forecasts. (Yesterday’s cities with high pollen counts included Erie and Newark.)

Both make their money selling their patient-level analytics to pharmaceutical and biotech companies, hospitals and pharmacies, and other clients. Still there’s very little overlap between the two, said Kress, who is heading the enlarged SDI. It will maintain both local offices as well as ones in Cranbury, N.J., and Waltham, Mass.

After a transition period, Verispan CEO Wayne Yetter will leave the organization.

Verispan was formed in 2002 as a joint venture between McKesson Corp., the wholesale pharmaceutical distributor, and Quintiles Transnational Corp., a clinical research organization.

Kress talks about the need for SDI to develop the next generation of analytics services for a pharmaceutical industry that is not as profitable as it was five years ago.

Drug companies need to be more efficient in how they deploy their resources and better data can help them do that, Kress said.