Accenture completes acquisition of Octagon Research Solutions; will be "fully integrated"
Tom Paine
Accenture said last week it had completed its acquisition of Wayne-based Octagon Research Solutions, which was announced in the beginning of August. Octagon, founded in 1999, provides clinical and regulatory information management solutions and software for the pharmaceutical industry. Existing top management, including co-founders James C. Walker (Chairman & CEO) and Kirk Gallion (President) will remain in place, David Boath, North American managing director for Accenture’s Life Sciences industry group, told me in a phone interview. Octagon will report to Boath, who is based in the Philadelphia area, which is a key location for Accenture Life Sciences.
Boath says Octagon will be "fully integrated" with Accenture. That will happen in two ways. First, Accenture is placing more emphasis on acquiring or building proprietary technology tools to complement its consulting and business process outsourcing practices. It has a group named Accenture Software, which develops industry-focused software-based solutions. Accenture Software will work with Octagon on integrating its technology with that of Accenture's. Secondly, Octagon's focus on managing the regulatory filing process will complement Accenture's work in helping clients manage other stages of the pharma R&D process. Boath sees the regulatory submission process as being a major bottleneck for its clients in bringing new products to market, and Octagon's tools help to speed that process.
Perhaps the key tool is ViewPoint, Octagon’s global enterprise submission process management solution. It helps manage the R&D submission process across the enterprise, and provides project management and workflow measurement tools that help measure progress and time utilization. ViewPoint can be used in conjunction with Octagon's Submission Stewardship Program(SSP), through which management of the submission process is outsourced to Octagon team members.
Accenture has partnered on projects with Octagon for several years, so the two companies know each other well. In the past,much of Octagon's work has been for pharmacuetical firms considered below the "Tier 1" level, since smaller firms have been the likeliest to outsource more of their processes. But Boath's vision is that with Octagon's technology and expertise married with Accenture's vast resources, the combined companies will be able to penetrate more "Tier 1" enterprises.
Accenture said at the time it announced the acquisition that Octagon had around 380 employees. Octagon had announced in June 2011 that it would add about 100 employees to its staffing level of around 300 at that time. Octagon reported revenue of $37.5 million to the Inc. 5000 for 2009; Boath wouldn't say what revenue is now except to say "its grown substantiallly" since then. I was able to identify $19.3 million in VC funds that went into Octagon, the majority probably from Edison Ventures, but I don't know whether this was the total sum invested in the company. Boath declined to say how much Accenture paid for Octagon, and that is something a company of its size probably does not have to disclose in filings.
The role of technology in the regulatory submission process has mushroomed with the FDA's implemention of the electronic Common Technical Document (eCTD) standard format for submitting information to the agency. There are several other companies in the Phily area that compete with or supply some services similar to Octagon's. They include NextDocs, the King of Prussia-based company that OpenView Venture Partners invested $10.3 million in last year: Horsham-based Liquent, acquired from Thomson Reuters in 2010 by Marlin Equity, and Philadelphia-based GlobalSubmit.
Accenture, which grew out of Anderson Consulting, is an enormous firm with close to $30 billion in annual revenue and almost 250,000 employees. Boath couldn't break out how much the Life Sciences industry group contributes in revenue, but did say that the group had about 10,000 employees globally.
Related: Breaking down some numbers in the Accenture/Octagon Research deal
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