A clinical trials technology startup with Duke University roots is being acquired by a California firm owned by Google's parent company.
Verily Life Sciences, Alphabet Inc.’s (Nasdaq: GOOG) health care research organization, has signed a deal to buy Raleigh-based SignalPath – its first major acquisition.
SignalPath, which centers around a suite of tools to execute clinical trials, is led by former researchers at Duke Clinical Research Institute. It was initially based in downtown Durham before relocating to Raleigh.
In an interview, SignalPath CEO Brad Hirsch said it’s a growth play for Raleigh.
“We are continuing our presence in Raleigh,” he said. “We’re keeping our office. We’re keeping the team. We’re going to double down and continue to expand our presence in Raleigh.”
He added that at some point going into 2022, “We’ll likely merge the brand into the Verily brand."
Hirsch said he was “happy” with the deal terms, but declined to provide additional details beyond calling it a “win for our board and our investors.” He declined to say whether SignalPath's 100-person headcount had a stake in the firm.
Financial details of the deal were not disclosed.
Amy Abernethy, president of Clinical Studies Platforms at Verily, said that joining forces could lead to lower costs in clinical trials.
“It’s our goal to modernize the way clinical trials are conducted for patients, researchers and sponsors alike,” Abernethy said in a prepared statement. “Together we will advance digital solutions to improve ease, quality, efficiency and speed in the current clinical trial paradigm.”
Specifically, the deal is intended to strengthen and expand Verily’s existing clinical trial system and evidence generation platform, known as Baseline. By adding its technology into the mix, SignalPath will be able to provide clinical research sites access to tools and trial opportunities that further strengthen its value proposition, according to the companies.
SignalPath employees will join Verily as part of Verily’s clinical research business. They will also maintain their physical presence in Raleigh, expanding Verily’s geographic footprint in the process.
Verily, based in California's Bay Area, was initially formed as a division of Google X until becoming an independent subsidiary of Alphabet in 2015. The company it’s acquiring, SignalPath, was founded in 2014 and has raised more than $34 million in outside capital.
SignalPath's most recent raise happened in 2019, an $18 million funder that SignalPath’s Hirsch said at the time would allow the firm to keep expanding while maintaining its independence.
“Folks have approached in the past and instead of going down that path we have decided to double-down and continue to expand,” Hirsch said two years ago when asked about M&A opportunities.
But on Tuesday Hirsch said that earlier this year it was clear the firm had reached "an inflection point." Its board discussed next steps – whether to raise a large round of outside capital or to find a partnership. Verily emerged as the best option, he said. He had known Abernethy since her Duke days and was familiar with the team, he said.
“Where we had been focused on health systems and how they run their trials day to day, Verily had been focused on trial technology … engaging patients in patient communities, “ he said. “We felt like bringing those together would really empower our sites.”
The company declined to give a revenue estimate. The past year has been a difficult one for the clinical trial industry, particularly as investigation sites faced sudden social distancing protocols and, in some cases, furloughs. A recent study found that from February through May of last year, just 57 percent of the clinical studies expected to happen during that time period actually occurred in the U.S.