Clinical trials group Icon has acquired Medeval, a British clinical pharmacology group, in a deal worth $22.5 million (€20.8 million).

Icon is paying an initial consideration of around $15.5 million in cash, including the repayment of debt, with further payments of up to $7 million due over the next 18 months, subject to the achievement of certain profit targets.

Medeval specialises in conducting "Phase One" clinical trials of new drugs at an 80-bed purpose-built facility in Manchester.

The company, which reported revenues of $15 million in its most recent fiscal year, has a strong bias toward the execution of "first-in-man" studies.

Icon specialises in late-stage clinical trials and it is the Irish group's first entry into this area of research, which is regarded as a good growth area.

Phase One studies typically follow pre-clinical studies of drugs in mice and other animals and involve the initial testing of drugs on humans.

"It's an area that they've wanted to get into for a number of years," said Merrion analyst Mr Peter Frawley. "It fills out their product range and their service offering to clients."

Icon said the inclusion of Medeval's results is expected to have no impact on earnings per share for the remaining four months of fiscal 2003. But it should be modestly accretive in the next financial year.

Mr Frawley said he was raising his earnings per share forecast for the group for fiscal 2004 by three to four cents.