The Power of Private Equity, People and Perseverance in Clinical Research: A Path to Growth and Success

Business or career success is increasingly determined by a blend of ambition, adaptability, and the ability to foster strong relationships while capturing value—both within an organization and across the industry. Anne Lamott once wrote something to the effect that all writers are contributing small drops of water ending up in the same lake (or something like that, her Bird by Bird book is one of my all time favorites). The point of the quote was that we are all contributing to the outcomes of humanity, and this is definitely evident in clinical research as of late.

Research sites are at the heart of this action, and presently experiencing a flood of investment capital. Site networks, with the help of massive amounts of private equity funding, have become powerful stakeholders in this industry. At a recent Investigator's Meeting in Dallas, I remember roughly half of the 100 plus sites were from 3 different site networks. This observation is evident at industry conferences as well as more investigator meetings. While consolidation in the form of private equity plays an ever-growing role in shaping the mold of clinical trials, the true strength of a research site (regardless of site network status) comes from its people and their relentless drive for growth and improvement. By embracing these values, research sites can not only survive but thrive in an industry that is becoming more competitive and consolidated, whether that means remaining independent, joining a site network, or expanding into a site network.

Private Equity and Site Networks: The Changing Landscape

Since the pandemic, the interest from investors in healthcare has surged, and clinical trials have attracted particular attention as I believe there are many inefficiencies that can be converted into profits with the right strategies, operators, and technologies. Private equity firms are increasingly bundling smaller research sites into site networks to streamline operations, achieve economies of scale, and ultimately increase profits. Currently, small sites are receiving offers of 8-12 times EBITDA (earnings before interest, taxes, depreciation, and amortization), and site networks of 20 or more sites are receiving offers of 16-20 time EBITDA. Since there is a liquid market to absorb this created value, the trend is strengthening with new PE firms entering the arena to compete for the opportunity. If you are a site owner, you have probably received an inquiry or two over these past 24 months.

Yet, site owners must carefully weigh their options. Anne Lamott’s advice from "Bird by Bird" is highly relevant here: take things step by step. In the rush to grow, it’s easy to get swept up by the allure of immediate capital. But as Lamott advocates for writers to focus on manageable chunks of work, site owners should take time to evaluate each aspect of a potential deal. Rapid growth can be tempting, but it’s the small, deliberate steps—understanding the implications of establishing a quality control system at your site, or attracting and retaining employee talent is a better use of your time if you have not built a solid foundation yet.

I am old enough to remember the site management organization (SMO) trend in the early 2000s. Playing the trend is a double-edged sword, one can massively benefit from these shifts, or can be greatly damaged. Site owners should not let FOMO (fear of missing out) be their guiding principle, but instead become informed as best they can of the current opportunities and threats.

Choosing the Right Path: Add-On vs. Platform

There are typically two paths for sites considering private equity: becoming an add-on to an existing platform or being the platform itself. The latter option is far more attractive for most site owners, offering the chance to maintain autonomy while receiving the necessary capital to expand. Being the platform or close to the beginning of it means owning a more significant portion of the value creation and maintaining control over operations, which can be crucial for long-term growth. As one site owner told me at this years' SOS Save Our Sites conference, “Being a late stage add-on is not intriguing; it’s for stakeholders looking to retire or those with no other options. Being the platform offers much more upside.”

Being early to the platform means leading, setting the pace, and being at the forefront of innovation, not to mention capturing the majority of the value being created from a new site network formation. For those with the ambition and vision to become a platform, private equity provides the fuel to expand and innovate. But site owners must be strategic, ensuring they maintain control over their operations, local branding, and vision while leveraging the capital and resources provided by PE investors.

Lessons from Consolidation: Opportunities and Challenges

The push towards consolidation in clinical research is not just about scale—it’s about leveraging new technologies and shifting business models. Layering tech on top of site networks is a key way private equity plans to streamline efficiencies and increase profits. Technologies such as direct-to-electronic data capture (EDC) and decentralized trials are already changing the way clinical research is conducted, not to mention reducing the reliance on CROs and potentially making site networks a relatively new category of stakeholder.

A rapidly growing trend as of late is one where smaller biotech companies are now working directly with research sites, bypassing CROs entirely. For what it's worth, I am seeing this firsthand (and it’s working) on a study we are currently doing at Yuma Clinical Trials and it is eye opening to me how efficiently the study is being conducted without a CRO involved. This shift represents a broader trend toward decentralization in the industry, as smaller players take control of their research operations without the traditional reliance on CROs and no doubt, is another driving force for private equity entering this space in search of efficiency gains at the local community site level.

People: The Foundation of Success

At the heart of any successful clinical research site are the people who run it. While capital and consolidation strategies may be crucial, the real power lies in building a strong, cohesive team. Many sites have discovered that promoting talent from within creates a strong culture of loyalty, resilience, and expertise. For example, many staff members who started in entry-level roles, such as phlebotomists or research assistants, have worked their way up to management positions over the years.

As Judy Galindo shared about Leslie Michelle Dowling her recently appointed Site manager on my latest podcast, “She came in with raw ingredients, and she earned her way up.” This reflects the belief that with the right guidance and opportunities, staff can grow into leadership roles that contribute to the overall success of the site, and if applicable, even at the corporate site network level. However, it’s important to recognize that not everyone is suited for management. People skills—such as communication, collaboration, and leadership—are crucial for success in higher-level roles. A great coordinator may not necessarily make a great site director if they lack these essential soft skills. This distinction highlights the importance of promoting the right people into leadership, ensuring that they can thrive under the pressures of management. I argue that it goes a step further, being the responsibility of the site ownership to help their staff reach their maximum potential, even if it means eventually ending up at another organization. There is an additional nuance or potential benefit to joining a site network early on, employees who typically feel that they have outgrown traditional small site opportunities, can be opened up to a new level of promotions at the corporate site network level without having to jump to a different organization.

Networking and Industry Relationships: The Path to Growth

Networking has always been a critical part of clinical research, but its importance has only grown in recent years. As independent sites face consolidation and increased competition, the ability to form strong relationships with sponsors, CROs, and peers in the industry becomes a crucial differentiator. Attending industry conferences, like SOS Save Our Sites or the most recent Site Solutions Summit (SCRS), offers valuable opportunities for site owners and managers to connect, learn, and collaborate.

As Leslie Michelle Dowling noted, “I’ve learned that networking is a huge part of clinical research.” Whether it’s sharing insights on regulatory compliance or exploring new technologies, these connections are often the foundation for future growth. Site owners and staff who attend these events not only gain valuable knowledge but also expand their professional networks, which can lead to study leads, collaborations, and new opportunities.

Technology is advancing rapidly and PE-backed site networks are becoming more prevalent, independent sites must leverage their relationships and adaptability to stay competitive. While PE investment offers the chance to scale quickly, it’s the people behind the sites who ultimately create the value. There is no reason why independent sites that proactively cultivate their networks and informally share resources or best practices cannot thrive in the face of massive consolidation. A Save Our Sites legendary site owner Rod Raphael, MA, CCRC embodies this thesis and has been operating independently for multiple decades in the face of numerous similar trends/fads over the years.

Independence and the Will to Remain Solo

For some, remaining independent is a conscious choice driven by the desire to stay true to their vision. Independence, however, does not mean isolation. It means exercising the entrepreneur within by choosing to expand on their own terms, focusing on organic growth, true networking with colleagues, and leveraging their unique strengths to build a sustainable business.

Site owners should not rush into decisions out of fear of missing out. Instead, they should trust their instincts, strategically evaluate their options, and only consider deals that align with their long-term vision. Patience, combined with a relentless drive to improve, is the path to true strength in this industry.