The ACCC will not oppose the proposed acquisition of I’rom Group Co Limited by Blackstone Group (HK) Limited after accepting a court-enforceable undertaking requiring the divestment of CMAX Clinical Research Pty Ltd.
Nucleus Network Pty Limited, which is indirectly owned by Blackstone, and CMAX, 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.
“Without the divestiture, the proposed acquisition would bring together the two largest suppliers of phase 1 clinical trials services in Australia,” ACCC Commissioner Dr Philip Williams said.
“This transaction could have resulted in increased prices and reduced service quality for phase 1 clinical trial services. Alternative providers of phase 1 clinical trial services would be unlikely to effectively constrain a combined Nucleus and CMAX including due to their more limited bed capacity and differing levels of expertise.”
“However, the divestiture addresses the competition issues as it will require the sale of the entire CMAX business to an ACCC-approved purchaser,” Dr Williams said.
The ACCC also had competition concerns regarding the potential for Blackstone to limit rival contract research organisations’ access to phase 1 clinical services provided by both Nucleus and CMAX. The divestiture of CMAX will also resolve this competition concern.
Further information, including the undertaking accepted by the ACCC, can be found on the ACCC’s public register: Blackstone Group (HK) Limited - I'rom Group Co Limited
Notes to editors
In considering the proposed merger, the ACCC applies the legal test set out in section 50 of the Competition and Consumer Act.
In general terms, section 50 prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market.
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 suppliers of phase 1 clinical trial services in Australia include Veritus, Linear, Scientia, Doherty Clinical Trials as well as other smaller suppliers.
Blackstone also has a majority interest in Precision Medicine Group which operates the Precision for Medicine contact research organisation (CRO). Precision for Medicine supplies clinical trial monitoring and management services to pharmaceutical and biotechnology companies, including in Australia.
CROs provide services to drug sponsors and assist with selecting phase 1 clinical trial service providers.