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What business qualities make an SME successful? We’ve been visiting various businesses to bring you some insightful case studies. This month it is Phlexglobal, a specialist in the provision of document management solutions to the clinical research industry, and No 9 in our SME 100 listings


Phlexglobal: The compliance of science


A trip to the gym was an unlikely catalyst that helped propel Amersham-based Phlexglobal to become a global market leader in its field – the document administration of clinical trial master files. Fortunately, Nicola Murgatroyd and Stella Donoghue had the same personal trainer.


Murgatroyd ran Phlexglobal, then a growing specialist recruitment and clinical trial support company, which needed a financial director. Donoghue was an experienced financial controller doing part-time consultancy. Their personal trainer introduced them – with none of them realising that a commercial wave was breaking that Phlexglobal would soon ride.


“When I joined in 2008, it was clear that Murgatroyd was really entrepreneurial and visionary about the business, but cashflow needed to be better controlled,” said Donoghue.


With Donoghue “getting on top of the numbers” and global business development director Karen Redding developing the business workbook, turnover doubled by 2010 to nearly £10 million. This year Donoghue expects turnover to hit £14m – with EBITDA (earnings before interest, taxes, depreciation, and amortisation) doubling.


Today, Phlexglobal works across the clinical research, pharmaceutical, biotechnology, medical device and healthcare industries and counts 17 of the top 20 global pharmaceutical companies amongst its clients. Phlexglobal has become a proven partner, playing a niche but vital role in many major long-term global clinical trials, underpinning their regulatory compliance.


“We deal with a very specialist subset of documents that govern the setup, monitoring and running of the trial. Those documents are important because if they are incorrect a regulatory agency such as the FDA (Food & Drug Administration) or MHRA (Medicines and Healthcare products Regulatory Agency) may deem a clinical trial’s results unusable.


“Our work may only represent 3% of the overall clinical trial budget, but it is a very important 3%.”


Phlexglobal is projecting turnover of around £25m and £8m EBITDA by 2015. “Growth is our


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aspiration,” admits Donoghue who was invited to become MD of Phlexglobal after a private equity- backed MBO early in 2011.


“The whole purpose of the PE deal was to enable the founders to exit. The business was getting much bigger, moving beyond their original interest in recruitment.”


So what generated Phlexglobal’s success?


While recruiting expert personnel for the clinical trial industry, Murgatroyd worked with the Institute of Clinical Research to develop a new professional role of Clinical Trial Administrator (CTA), effectively centralizing administrative tasks. Phlexglobal began providing skilled CTAs to the sector, supported by trained and accredited teams, to manage Trial Master Files (TMFs).


As Phlexglobal’s TMF expertise grew, so did its clientbase. Clinical research teams entrusted their TMFs to Phlexglobal for expert quality control checking, document retrieval, indexing, filing, archiving and general consultancy, particularly since Phlexglobal represented independent professional verification.


Phlexglobal then focused on the eClinical world and in 2007 launched its electronic TMF solution PhlexEview. It not only cuts down on management travel, time and paperwork costs but also offers viewable ‘real-time’ documentation of an ongoing trial.


PhlexEview enables pharmaceutical company controllers to manage their worldwide clinical trials much better, from their office. “It gives control back to the pharma companies.”


The move to eTMFs is growing and Phlexglobal, once a pioneer, is now a world leader in providing electronic TMF software and associated services.


Today, Phlexglobal’s 200 UK staff can be dealing simultaneously with up to 400 different clinical trials, all generating essential documentation. Processing staff are trained to deal with up to 600 document types; individual staff handling up to 300 documents every day.


Paper management remains important. Most Stella Donoghue


clinical trials last several years and are still significantly paper-based. Documents are kept for a minimum 15 years after the trial ends. Phlexglobal has state-of-the-art records centres and in May moved around five million pages to its newest centre in Chesham.


Other factors – regulation and cost-efficiency – have also driven Phlexglobal’s growth. Concerns over patient safety prompted legislation and greater regulation; compensation culture focused accountability; and the world became more litigious.


While managing the essential administration and compliance, Phlexglobal also keeps abreast of regulatory changes. “Because it requires quite specialist knowledge and abilities, customers tend to outsource it to people like us who can do it better.”


Phlexglobal maintains its own quality control through extensive inhouse training and constant monitoring by its audit and QC division.


And the future? Phlexglobal opened an office in Philadelphia in May 2011. “About 75% of our business comes from US-managed companies. In the past year our US team has tripled in size. In another two years our US operation could be as big as the UK. We are also looking at the Far East.”


“Our clinical trial market is so large we haven’t had to focus outside it yet, but there are wider opportunities for our business. We are now completely cash-positive, and definitely interested in growth through the acquisition of expertise,” added Donoghue.


Phlexglobal’s SME-to-SME advice:


• Control cashflow. Don’t let costs outrun revenue.


• Be cautious about hiring staff. Maintain as much flexibility as possible.


• Never underestimate how long deals can take, and their business impact.


Details: www.phlexglobal.com


www.businessmag.co.uk


THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2012


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