After finding success investing in the more obviously lucrative corners of American medicine — like surgery centers and dermatology practices — private equity firms have moved aggressively into the industry’s more hidden niches: They are pouring billions into the business of clinical drug trials.
To bring a new drug to market, the FDA requires pharmaceutical firms to perform extensive studies to demonstrate safety and efficacy, which are often expensive and time-consuming to conduct to the agency’s specifications. Getting a drug to market a few months sooner and for less expense than usual can translate into millions in profit for the manufacturer.
That is why a private equity-backed startup like Headlands Research saw an opportunity in creating a network of clinical sites and wringing greater efficiency out of businesses, to perform this critical scientific work faster. And why Moderna, Pfizer, Biogen, and…
