OmniComm's Purchase of eRT Data Capture Unit

OmniComm Systems Inc. recently acquired eResearchTechnology Inc.’s Electronic Data Capture (EDC) business. Click here to see the Philadelphia Business Journal article.

This acquisition represents a change in the EDC landscape that directly affects Mousley Consulting and some of it's clients; eRT's software customers; and biotech and pharmaceutical companies in general.

There are three points that we would like to briefly discuss about this transaction. We will not comment on the financial arrangements of the transaction, however, since that is not our direct concern. What is of interest are the following questions:

1. What will be the impact on eRT's customers?
2. What will be the impact on OmniComm and its current customers?
3. What will be the short and long term impact on the EDC industry?

First, what will be the impact on eRT's customers?

We believe this acquisition will probably be a good thing. We feel that the software might be better served being owned by a software company and not as an "orphaned" product owned by a services company. eRT has traditionally made most of its revenue from its ECG business. Software was a component of their business, but it was not the main focus. OmniComm will certainly pay more attention to the product.

However, it remains to be seen how much of the eRT software OmniComm will actually keep. Since OmniComm already has its own EDC software, it will be interesting to see how much of their own software and how much of eRT's software continues in OmniComm's future product.

When DataTrak purchased ClickFind, DataTrak's own EDC product was discontinued, and the ClickFind product enhanced to be the eventual future offering. While we feel what will happen with OmniComm probably won't be that drastic, we do believe there will be an eventual integration of the two products into one.

in any case, eRT customers may end up getting a more complete software offering, albeit not what they have been using, as well as better focused service.

Secondly, what will be the impact on OmniComm and its current customers?

Clearly OmniComm picks up a large customer base which should help the company in terms of its financial stability. In the short term, we believe there will be disruptions in service as OmniComm folds in the eRT business, but just how disruptive it will be depends on how well the merger is managed. In the longer term, the OmniComm product may be enhanced with the data management features from the eRT product, which overall should be a good thing.

Hopefully OmniComm will strive very hard to keep all of its current customers in the loop and be very responsive to them during this time of transition. Mergers are never easy, and two very different software packages will need to be maintained along with their own customer support in the short term to keep everyone happy.

Finally, what will be the impact on the EDC industry?

We have long felt there should be consolidation in the industry. At the DIA Annual show in San Diego, held in June 2009, there were still a lot of vendors. It seems, however, that the new entries are focusing on different niches, like pen on paper in the case of Kayentis, or on CDISC SDTM integration in the case of Octagon Research.

So we feel that there is still not a lot of consolidation going on yet. Maybe OmniComm's acquistion of eResearch's data capture unit is the start of more consolidation?

Looking forward, we believe that the EDC market will continue to mature and evolve. Where it ends up and what it will look like as it does so, is still anyone's guess.