How Memphis-based CirQuest Labs became a player with big pharma and a global M&A target

As with any business owner, Lisa Jennings started CirQuest Labs in 2008 with an initial goal of creating a successful venture that could grow. But, being an M&A prospect wasn’t a thought then.

Specific to the bioscience sector, she wanted her company to become a go-to product development lab for the pharmaceutical and medical device industries.

Three years into CirQuest’s lifespan, Jennings had five local staff, which grew to a dozen in 2014 and to 18 locally in 2018.

Now, CirQuest has 25 full-time staff in the Memphis market and more than 75 pharma and device clients, from startups to Fortune 500 companies.

“We’ve worked with pharma across the lifespan of their drugs. Through referral and repeat business, we've grown as a specialized laboratory services company and have assisted companies in getting their drugs approved and cleared by the FDA,” Jennings said.

That client base and CirQuest’s growth of service offerings led to M&A interest, especially over the last year.

“As a result of that, we started becoming attractive to other larger laboratories and investment groups to be part of a merger and acquisition,” she said.

On July 9, Germany-based MLM Medical Labs, acquired CirQuest for an undisclosed amount. MLM is a portfolio company of Great Point Partners, a health care investment firm based in Greenwich, Connecticut.

Similar to CirQuest, MLM is a central laboratory focused on clinical trials. The firm has clients in 40 countries, including in the U.S. and in Eastern Europe.

“CirQuest provides key services to many of the world’s leading drug developers. MLM’s acquisition of CirQuest will create a global and nimble central lab platform,” said Rohan Saikia, managing director at Great Point Partners, in a release.

Among the key benefits of the merger, Jennings cited access to resources such as instrumentation and equipment to remain on the cutting-edge of translation science, as well as access to MLM’s systems that can be incorporated in Memphis.

“[We] provide a very needed service because the pharmaceutical industry sometimes does not have the bandwidth to do the type of science that needs to be done to have a successful drug or device,” Jennings said.

And, having Great Point Partners as a capital backer could result in other lab acquisitions down the road to add to the current combination of MLM and CirQuest, Jennings said.

Discussions with MLM began in earnest at the start of 2020. Both sides of the merger hoped to solidify a global presence in clinical trial sample testing and in specialty lab testing.

Jennings visited Germany in February, while MLM representatives had visited CirQuest’s Memphis lab in January. She said while the two firms share common goals and viewpoints to grow globally, their services dovetail together.

“We each have expertise in certain areas that are complimentary and not always overlapping,” Jennings said.

MLM and CirQuest will remain two separate laboratories in essence, with Jennings becoming the global chief scientific officer over both. She will also remain as the managing executive officer at the Memphis lab.

A transition to a new facility at 140 Collins St. in 2017 was part of CirQuest’s recent growth. The move tripled the firm’s space to about 19,000 square feet.

While CirQuest has already grown into a sizable laboratory company, Jennings said the merger with MLM will allow for significant additions in Memphis.

“This partnership is going to allow us … to have more resources for capital expenditures, to launch new services, and to grow the staff at a faster rate [here] than we would have been able to do on our own,” Jennings said.