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ACM deal expands its reach

Rochester Business Journal
January 24, 2014

ACM Medical Laboratory Inc. made a major global push with the acquisition of Phoenix Pharma Central Services Pte. Ltd., officials at ACM and Unity Health System said this week.

The acquisition gives ACM lab operations in Shanghai and Singapore. The deal will greatly expand the medical testing and clinical trials lab’s opportunities in Asia and the Pacific Rim but also will mean more jobs in Rochester, Unity CEO Warren Hern predicted.

Terms of the acquisition were not disclosed.

“This is a big deal for Unity. It provides a great opportunity for growth,” said Hern, who in the late 1990s, as the health system’s chief financial officer, played a key role in Unity’s acquisition of ACM.

ACM, which has its headquarters in Gates, is a for-profit subsidiary of Unity. The lab contributes some $100 million a year to the health system’s revenues.

With 483 local employees, ACM ranked 14th on the Rochester Business Journal’s most recent list of private companies. In 2012, the lab’s $9.3 million profit accounted for more than half of the health system’s $15.1 million surplus.

Established as a medical testing lab processing blood samples for routine medical tests ordered by local doctors, ACM started building a U.S. and global clinical trials business in 1994.

It acquired a British unit, Pivotal Laboratories Ltd., in 2009 that has been a base for business in Western and Eastern Europe. In 2012, ACM moved its United Kingdom headquarters to a newly built 14,000-square-foot facility in York, England.

ACM’s acquisition of Phoenix Pharma is “a major milestone in our organization’s growth and represents a significant investment in and commitment to the (Asia-Pacific) region,” ACM CEO Angela Panzarella said.

Because the Asia-Pacific region’s burgeoning population offers the fastest-growing source of suitable clinical trials subjects, drug companies increasingly are looking to China and other Asian countries as staging grounds for drug tests, said Mark Engelhart, ACM chief commercial officer.

But while drug trials might be handled by Asian physicians and hospitals, testing and analysis of samples is done in central labs.

For ACM, Engelhart said, a pickup of Asia-Pacific business would mean added work for its Gates and British labs as well as in its newly acquired Singapore and Shanghai facilities. The company did not provide a projection of how many employees it might add.

By adding up-to-date lab services in the Asia-Pacific region, ACM puts its global clinical trials capabilities on a par with operations of its biggest competitors, Engelhart said.

Singapore is an independent city-state on an island off the Malay Peninsula. With a population of 24 million, Shanghai is the largest city in China. Both are global centers of finance and commerce as well as transportation, commercial and finance hubs for the Asia-Pacific region.

Phoenix Pharma staff’s familiarity with regional regulatory requirements, local logistics, customs and local languages also are advantages that increase AMC’s ability to capture business for Asia-Pacific region drug trials, Engelhart added.  Until now, ACM relied on partnerships in India and Australia to anchor its Asia and Pacific Rim business. The Phoenix Pharma acquisition gives it wholly owned bases in Southeast Asia and on the Chinese mainland.

While ACM has worked with an India-based partner for more than a decade, Phoenix Pharma adds to the Gates-based lab’s global clinical trials unit two well-established lab operations that have staffs familiar with country-specific logistics, regulatory environments, local customs and languages, Engelhart said.

Phoenix Pharma’s Singapore and Shanghai labs provide services for Asia-based phase I to phase IV clinical trials. The Singapore firm has been accredited by the American College of Pathologists since 2003. It will continue to be run by its founding CEO, Chiew Yan Lee, officials said.

Lee is a 20-year veteran of the clinical trials business who established the Asian lab operation in 2001. He is to serve as director of ACM’s Singapore and Shanghai labs.

“We are excited to be joining the ACM Global team,” he said in a statement. “With the resources and opportunities available through ACM, we can further enhance our core services. We are looking forward to being a part of ACM’s ongoing growth and success, both in the Asia-Pacific region and globally.”

Phoenix Pharma’s labs have five employees now, Unity said. ACM expects to add employees there with the acquisition.

The non-profit Unity Health System includes Unity Hospital in Greece, the St. Mary’s Campus in Rochester and other local health care facilities. The health system is the area’s fifth-largest private-sector employer with more than 5,300 workers.

Federal and state regulators are reviewing plans for Unity and the 8,100-employee Rochester General Health System to merge. Officials of the health systems hope to see the merger completed this year.

1/24/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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