The ACCC has outlined preliminary competition concerns with the proposed acquisition of I'rom Group Co Limited by Blackstone Group (HK) Limited (Blackstone) in a Statement of Issues published today.
Nucleus Network Pty Limited, which is indirectly owned by Blackstone, and CMAX Clinical Research Pty Ltd, which is owned by I'rom, are the two largest suppliers of phase 1 clinical trial services in Australia.
Phase 1 clinical trials are an important step in trialling new therapeutic products such as medicines. They are generally conducted with volunteers and are focused on testing the safety and tolerability of medicine.
"We are concerned that the proposed acquisition would be likely to have the effect of substantially lessening competition in the supply of phase 1 clinical trials in Australia," ACCC Commissioner Dr Philip Williams said.
"The proposed acquisition would bring the two largest providers in Australia under common ownership, with 59% of phase 1 trial beds in Australia, likely significantly lessening the competition faced by these providers."
The ACCC is concerned that the proposed acquisition is likely to result in lower service quality and higher prices for customers.
The ACCC also considers that there are significant timeframes associated with setting up new phase 1 clinical trial units, such that the likelihood of timely and effective new entry or expansion in Australia is relatively low.
In addition to indirectly owning Nucleus, Blackstone also has a majority interest in Precision Medicine Group, which operates the Precision for Medicine contract research organisation. Precision provides services to drug sponsors and assists with selecting phase 1 clinical trial service providers.
"We are also concerned that Blackstone may have the ability and incentive to restrict access to phase 1 clinical trial services by competing contract research organisations," Dr Williams said.
The ACCC invites submissions in response to the Statement of Issues by 21 November 2024
More information, including the Statement of Issues is available on the ACCC's public register here: Blackstone Group (HK) Limited - I'rom Group Co Limited
Background
Blackstone Group (HK) Limited, or its related bodies corporate are seeking to acquire I'rom Group Co Limited. Blackstone indirectly own Nucleus Network Pty Limited and I'rom owns CMAX Clinical Research Pty Ltd.
Nucleus and CMAX both supply phase 1 clinical trial services in Australia to biotechnology and pharmaceutical companies.
Other phase 1 clinical trial service providers in Australia include Veritus, Linear, Scientia, Doherty Clinical Trials as well as other smaller providers.
Blackstone also has a majority interest in Precision Medicine Group which operates the Precision for Medicine contact research organisation. Precision for Medicine supplies clinical trial monitoring and management services to pharmaceutical and biotechnology companies, including in Australia.
