Beyond “Buy-and-Build”: Rethinking Value Creation in Life Science Support Services
After not-too-distant successful exit-cases, the investor interest in the Life Sciences support-services sector has been skyrocketing. From regulatory and compliance support to clinical development, to pharmacovigilance, market access and other domains investors have been drawn to the sector’s resilience, recurring revenue models, and predictable growth. The traditional playbook was clear: acquire, integrate, and scale.
The logic was straightforward — roll up a fragmented market, build regional or functional scale and breadth, and ultimately realise value through margin expansion and a strategic exit. This model worked well in the earlier wave of consolidation. But the market has changed, technological advances are disrupting and diminishing returns are increasingly apparent.
The old strategy may no longer be the optimal route to value creation.
When Scale Stops Creating Value
Towards the end of the 2010s, the Life Science Support Services landscape was highly fragmented, with hundreds of specialised providers serving pharma, biotech, and medtech clients. Acquiring and integrating smaller players offered investors instant scale, access to new geographies, and broader service portfolios. As long as integration was executed efficiently, valuation multiples rewarded synergies, growth and diversification.
However, as the consolidation cycle has matured, the returns from this “buy-and-build” approach have steadily diminished. Many of the most attractive acquisition targets have already been absorbed, leaving a smaller pool of niche operators accompanied by premium price tags. In addition, the operational complexity of integrating multiple acquisitions — each with its own systems, culture, and client base — is often overlooked, resulting in diminished agility and slower innovation.
The result is a landscape where scale alone no longer guarantees premium valuations. Investors and strategists are now seeking something more: differentiation, innovation, and strategic relevance in a rapidly evolving market.
Data Is The New Currency – or - The New Value Drivers
The life sciences ecosystem is undergoing a profound shift. Advances in AI, automation, data analytics, and digital platforms are transforming how drugs are discovered, developed, and commercialised. Service providers that can harness these technologies — to improve client outcomes, accelerate timelines, or enhance regulatory insight — are emerging as the next generation of high-value assets.
In this new environment, investors who focus purely on size and scale risk missing the bigger picture. Intellectual property, proprietary technology, and unique data assets are becoming as important as revenue scale, whilst headcount will diminish. Meanwhile, clients — particularly large pharma and biotech firms — are demanding more integrated, technology-enabled solutions rather than traditional manpower-based consulting services.
This creates an opportunity for investors to rethink their approach. Rather than focusing on consolidation for its own sake, the strategic question becomes: How can capital and expertise be used to unlock innovation and value-creation?
Moving from Aggregation to Acceleration
The most successful investment strategies in Life Science Services over the next decade are likely to prioritise acceleration over aggregation. That means backing companies with strong foundations — domain expertise, trusted client relationships, and scalable platforms — and helping them enhance their capabilities through technology, automation, and AI-driven insight.
For example, enabling a regulatory service provider to develop an AI-enabled submission management platform could create disproportionate value compared with acquiring a handful of similar firms. Likewise, supporting a clinical services company to invest in predictive analytics or digital trial technologies can open new revenue streams and improve margins — without the cultural friction and integration costs of serial acquisitions.
These “smart growth” approaches require a different mindset — and a different due diligence lens. Investors must assess not just financials and pipeline, but also a company’s data maturity, digital capability, and innovation culture. The winners will be those who can identify and scale truly differentiated capabilities that solve meaningful problems for their clients.
A New Equation for Value
As the sector continues to evolve, the metrics for valuation will too. In the next wave of transactions, buyers and investors are likely to place greater emphasis on:
Technology enablement and IP – proprietary platforms, analytics, and automation capabilities.
Innovation track record – evidence of new solutions that drive efficiency, compliance, or speed-to-market.
Client integration – the ability to deliver across the development lifecycle, embedded into clients, interactive with health authorities, powered by data and insight.
Scalable infrastructure – digital systems that support sustainable, high-margin growth.
“Too big to fail” has outlived its usefulness. The future winners in Life Science Services won’t just be bigger — they’ll be smarter. For investors, that means moving beyond the comfort of the “buy-and-build” model and embracing a more nuanced, innovation-led approach to value creation.