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Health-Services Provider Constella Group Focuses on Drug Testing

Posted on: Tuesday, 21 March 2006, 15:00 CST

By Sabine Vollmer, The News & Observer, Raleigh, N.C.

Mar. 21--A Durham health-services provider is beefing up its drug testing services and taking the business worldwide.

Constella Group is tripling its work force in contract drug research by buying Origin Pharmaceuticals, a British company that helps drug makers get new treatments approved in Europe. The deal, the latest in a string of acquisitions, allows Constella to tap deeper into the booming contract drug research industry and compete better with large players, many of which have operations in the Triangle.

Absorbing Origin will also benefit Constella's other business units, said Donald Holzworth, Constella's chief executive. The company, whose mission it is to enhance human health worldwide, provides information to the Centers for Disease Control and Prevention and other U.S. government agencies and assists developing countries in fighting diseases such as AIDS, tuberculosis and malaria.

"If we're going to be serious about improving human health globally, we have to work with pharmaceutical companies," Holzworth said. "That's where new drugs are discovered to treat disease."

Holzworth declined to say how much he's paying for Origin, a company that generated about $14 million in revenue in the past 12 months. Both companies are privately owned.

He projected the acquisition will help boost Constella's revenue to $180 million this year, from $143 million in 2005. Origin's approximately 100 employees joined Constella, adding to a global work force of about 1,100. But Holzworth expected that buying Origin will also create jobs in Durham, where two of Constella's three business units are based.

For Origin, becoming part of Constella means immediate access to the United States, said Steve Smith, chief executive and co-founder.

Smith said he had been looking to establish an East Coast office when he received the offer from Holzworth.

"I've known Don for eight or nine years. We talked over the years. We share the same vision. It was right," Smith said. The

acquisition puts him in charge of Constella's new pharmaceutical product development unit.

Constella has worked with pharmaceutical companies since 1994, when it was still called Analytical Sciences Inc. Initially, services were limited to data management and statistics, which is mostly crunching large amounts of numbers generated by testing experimental drugs on healthy volunteers and patients.

Over the next nine years, the company focused on expanding its government business, winning large contracts to establish an AIDS information network and a system to report side effects from vaccines. After buying a health-sciences company and a health-care consulting business, Holzworth changed the name of the company to Constella in 2003.

The same year, Constella expanded its contract drug research services by purchasing Resource Solutions, a Research Triangle Park firm that managed clinical trials for the pharmaceutical, medical devices and biotechnology industries.

By adding Origin, which has operations in Paris; Oxford, England and Cologne, Germany; Constella is able to provide contract research and regulatory consulting services outside the United States.

But Holzworth hopes the benefits will reach further. The contract drug research business could piggyback on the Futures Group, Constella's business unit that assists developing countries, and recruit patients in places such as India. And health sciences, the business unit working with the U.S. government, could keep track of what fuels the development of the latest treatments.

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Copyright (c) 2006, The News & Observer, Raleigh, N.C.

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Source: The News & Observer

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