Biopharma Outsourcing Is Going Through Deal Bonanza in U.S.

For the little-known companies doing the grunt work of drugmakers, it’s deal season.

Contract research organizations—the science-for-hire firms that handle clinical trials, medical-lab testing and other services for pharmaceutical companies—are all the talk of the health-care M&A world. The latest transaction was the $4.5 billion takeout of Parexel International Corp. on June 20. And analysts say there’s more to come.

After M&A spending quadrupled to $24 billion in 2016 in the U.S., deals so far this year total $13 billion in the contract industry—more than the annual volumes of the 2007-2015 period—according to data combined by Bloomberg.

There are several ...