Continuing the development of its life sciences portfolio, Oracle (news, site) has just announced that it will buy Massachusetts-based Phase Forward, a life science application vendor for US $685 million.

Phase Forward’s principal range of products consist of SaaS integrated clinical research suites for the management and safety of clinical trials from start to post-regulatory approval monitoring.

The deal will see Phase Forward incorporated into Oracle’s Health Sciences division with both management and staff expected to join Oracle once the deal has been finalized in the middle of this year.

The new addition will provide researchers, clinical development professionals, physicians, regulators and patients with new tools to securely capture, contribute, access and share data.

Oracle already has substantial interests in the life sciences market, with software for project management, validation and compliance software already available. With the recent upgrade to its online CRM -- Release 17 -- it also released a CRM module specifically for the life sciences.

Oracle And Health Science

With Phase Forward Oracle moves firmly into the area of clinical trials. With it, its combined Health and Sciences portfolio is targeting an industry that is expected to spend in the region of US $26 billion on software in 2010, according to estimates from Forrester (news, site) research. 

While the price it is paying for Phase Forward is relatively modest compared with the US $7.4 billion paid out for Sun Microsystems, it continues a trend in the company since 2005 to buy what it cannot develop internally.

The result has seen it acquire 62 companies since then with a total price tag estimated to be around US $42 billion. This includes 23 companies whose software is geared for specific industries, such as telecommunications, retail and health.

Mission-Critical Software

Phase Forward has been showing double digit growth with sales of US $213.3 million in 2009. However, profits fell to US $8 million after hitting highs of US $29.2 million in 2007.

For Oracle,the acquisition will also add 335 companies Oracle's life science customer base . While the technology Phase Forward sells will continue to be the mainstay of Oracle’s dealings with those companies, it also opens the doors for Oracle’s other health software products.

Currently there is room in this market for one of the uber-vendors as SAP has no presence there, while IBM (news, site) and SAS Institute hold true to form and have concentrated on information and performance management. Oracle is ideally suited to fill that space.