Parexel, the Newton-based company that helps run clinical trials for the pharmaceutical industry, said Friday it would be bought by the Swedish private equity firm EQT and Goldman Sachs Asset Management for $8.5 billion.
The deal marks the second time in four years that Parexel’s ownership has changed. In 2017 the company, then publicly traded, was acquired by Pamplona Capital Management for $5 billion.
Parexel shepherds experimental medicines through the costly clinical and regulatory process, crucial work that many drug firms can’t afford to do themselves. The company has a second headquarters in Durham, N.C.
Jamie Macdonald, chief executive of Parexel, said business has grown steadily despite the pandemic, which delayed or halted some clinical trials of non-coronavirus medicines and vaccines, and the firm expects the trend to continue.
“EQT and Goldman Sachs support this vision and are committed to investing in Parexel and our people,” he said in a statement.
Parexel has almost 16,000 employees worldwide, including almost 3,300 in the United States and almost 450 in Massachusetts, and works with clients in more than 100 countries, according to its website.
Eric Liu, a partner and global co-head of health care at EQT, said the private equity firm has “followed Parexel closely during the past few years and have been impressed by the company’s development and trajectory.”
Before Macdonald became CEO in 2018, he served as a longtime senior adviser to EQT, Liu added.
Macdonald succeeded Josef von Rickenbach, who helped start the company in 1982 in his basement in Watertown. Parexel grew to become one of the biggest life science companies based in Massachusetts even though it was largely invisible to the public.
A generation ago, pharmaceutical companies did most of their own work testing potential medicines on patients and then directly seeking approval from the Food and Drug Administration and foreign regulators. It was a long, expensive process that could end in extensive layoffs if the experimental drugs fizzled out somewhere along the line, as most do.
Von Rickenbach, who worked at Schering-Plough in Switzerland before he came to the United States, founded Parexel with Anne Sayigh, an organic chemist.
At first, they wanted to help foreign companies navigate the US regulatory process. But they quickly realized that the biggest challenge for many firms was running costly clinical trials to determine if experimental drugs were safe and effective. They decided Parexel could do that, too — everything from finding hospitals where drugs could be tested on patients to recruiting participants to overseeing the trials.
Contract research organizations also benefited from the emergence in the late 1970s of the biotech industry, which produces innovative medicines that rely on living organisms. Typically, new biotech startups were small research outfits that worked hard to raise cash and couldn’t afford to run clinical trials themselves.
Parexel’s rivals include IQVIA, Covance, and Syneos Health.
Jonathan Saltzman can be reached at firstname.lastname@example.org.