Today, Leder and Clein say they've gained a bit of clarity.
United BioSource Corp., they say, is a company aimed at changing the evaluation of drugs and other medical treatments through a system that combines elements of the biotechnology, information technology and consulting industries.
The Bethesda company was founded on a theory that has yet to be proved but could provide a big payout. The two think the nation's health care system is on the verge of demanding that pharmaceutical companies and medical device makers prove that their products not only work but are cost-effective. Health care expenses are weighing heavily on the government and medical insurers, they say, making those organizations further scrutinize drugs and medical products. United BioSource is betting that, rather just than spending billions of dollars buying magazine ads and hiring big sales staffs, drug companies will pay it to analyze products for them.
"We thought the future was demonstrating through science and evidence the value of these products," Leder said.
Prescription drugs already go through rigorous testing just to get on the market, of course, but Leder and Clein expect this process to be pushed one step forward, with pharmaceutical firms trying to prove that their products are superior to competitors' and ultimately less costly to insurers.
Take, for instance, the case of two rival diabetes drugs. One is expensive and has to be taken once a day while the other is cheaper and requires three daily dosages. United BioSource could be hired by an insurance company to conduct what Leder calls a "real world" evaluation, which might find that patients are prone to missing some doses of the second drug, causing more problems and hospital stays and ultimately costing the insurer more money.
In a year and a half, the firm has gobbled up four firms that specialize in different functions related to this type of testing and data management, including Medtap International Inc., a Bethesda pharmaceutical research firm. Today the company will announce the purchase of Dynarand LLC, a San Francisco firm that sells technology to aid clinical research, and PharmaStar LLC, a Wayne, Pa., firm that provides training and development services to the pharmaceutical industry.
The privately held company's executives won't say how much they paid for each acquisition but will disclose that they still have about half of the initial $153 million left. United BioSource's investors, including Timonium-based Grotech Capital Group, trust Leder and Clein to spend their money wisely. The duo's last company, a specialty pharmaceutical distribution firm called U.S. Bioservices Corp., was established with a $60 million venture investment and sold 18 months later for $180 million. A health care banking firm Leder built in the 1990s with two other partners was eventually sold for $483 million in cash.
It's a big week for Approva Corp., a three-year-old Vienna business software firm. On Tuesday, the company announced that it had landed $15 million in venture capital, its biggest funding round yet. Today the company adds a marquee name to its board of directors. Harvey L. Pitt, former chairman of the Securities and Exchange Commission -- who resigned amid accusations that he wasn't tough enough on corporate abuses -- has signed on to help the company hawk its Sarbanes-Oxley Act compliance software.
"I was very impressed with what they are trying to do and where it looks like they're going," Pitt said. "I think that there are significant aspects [of Sarbanes-Oxley], particularly in monitoring compliance, early warnings and the like, where software can take on a major aspect of the burden."
Ellen McCarthy writes about the local tech scene every Thursday. Her e-mail address is firstname.lastname@example.org.