Resonance Health expands clinical trial operations with Sun Pharmaceutical agreement

Australian healthcare technology and services company Resonance Health (ASX: RHT) has secured an agreement with Sun Pharmaceutical Industries to operate as its local Australian sponsor.

As sponsor, Resonance will provide clinical research organisation, trial site and imaging analysis services for the global pharmaceutical giant’s Australian clinical trial of a new drug compound.

Resonance estimates it will receive $13.8 million in total revenue from the deal over the next 24 months, with an initial payment of $2.1m due within 30 days of execution.

New business

Resonance will conduct the clinical trial through its recently acquired TrialsWest business.

Resonance agreed to acquire 100% of TrialsWest, one of Australia’s most experienced and successful clinical research centres, in April for an upfront cash consideration of $4m.

A further $4m is potentially payable to TrialsWest vendors under an earnout arrangement.

Acquisition benefits

Resonance Health chief executive officer Andrew Harrison said the company is already seeing benefits from the TrialsWest acquisition.

“The selected trial sites are among the largest vendors for clinical trials of this nature, so […] a significant portion of the revenues payable to trial sites will now stay within the Resonance group,” he said.

“This contract win highlights Resonance’s strategy of providing its technology and services to the burgeoning and highly technical global pharma and clinical trials markets,” he said.

Trial recruitment

The company expects patient recruitment for the clinical trial to commence in early 2025, with both TrialsWest sites expected to play a key role in the process.

Resonance will also provide its imaging analysis services at various timepoints throughout the clinical trial along with clinical trial site services involving engagement with and payments to the relevant institutions, sites and vendors.

“The agreement is a direct result of the incredible work the team has done in executing the existing clinical trial with the customer and, more broadly, the company’s focus on winning more work in the global clinical trials ecosystem,” Mr Harrison said.

“This illustrates our ability to win repeat work from customers and our capacity to scale the size of contract wins.”