Oracle Expands Health-Care Application Base With Phase Forward Deal

The acquisition, which Oracle expects to complete by the middle of the year, continues the vendor's aggressive expansion into the market for healthcare and life sciences software.

Phase Forward, based in Waltham, Mass., develops software used by life sciences and pharmaceutical companies for managing clinical trials when testing new drugs and medical products. The company's software, including the on-demand Integrated Clinical Research Suite, helps capture data from drug trials and develops reports to meet drug safety and regulatory approval requirements.

While Oracle's recent $7.4 billion acquisition of Sun Microsystems has attracted the most attention, Oracle has been acquiring a number of developers of applications for vertical industries, especially for healthcare. Once the acquisition is complete Phase Forward will become part of the Oracle Health Sciences Global Business Unit.

"The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation," said Neil de Crescenzo, senior vice president and general manager of Oracle Health Sciences, in a statement. "Phase Forward brings outstanding products and employees with significant expertise to Oracle that will help enable the delivery of personalized medicine and value-based healthcare."

Phase Forward's customers include pharmaceutical companies, medical device makers, regulatory agencies, academic medical centers and public health organizations, according to a report from Technology Business Research, a Hampton, N.H.-based market research firm.

"As pressures from the economic environment and new lesgislation make healthcare providers look to streamline costs, there is an opportunity for Oracle to grow sales to the industry," TBR analyst Stuart Williams wrote in the report. He noted that the Phase Forward technology is complementary to drug safety, risk management and analysis applications Oracle acquired in March 2009 when it bought Relsys.

Oracle is paying $17.00 per share in cash for the publicly held Phase Forward or approximately $685 million, Oracle said Friday. Phase Forward reported $213.3 million in sales in calendar 2009. The deal is subject to shareholder and regulatory approval.