The share price of healthcare technology and services business Resonance Health (ASX: RHT) surged by more than 50 per cent on Tuesday after the company nailed down a two-year clinical trial agreement with Indian multinational pharmaceutical titan, Sun Pharmaceuticals.

The $13.775 million deal will see Resonance act as the local Australian sponsor and provide clinical research organisation (CRO) services, trial site services, and imaging analysis services for Sun’s clinical trial of a new drug compound.

Resonance, operating via its wholly owned subsidiary CRO Services, will also be tasked with engaging and making payment to all the relevant institutions, trial sites, and vendors which are required to conduct the clinical trial in Australia.

More specifically, Resonance will be responsible for providing its imaging analysis services at various timepoints throughout the clinical trial. It will also deliver clinical trial site services through its recently acquired business, TrialWest.

First patient recruitment for the trial has been pencilled in for early 2025, depending on regulatory approvals. The two sites operated by TrialsWest – a leading Australian clinical research centre – are anticipated to play a pivotal role in subject recruitment and the conduct of the trial.

Management noted that trial sites represent some of the largest vendors in clinical trials like the one to be conducted by Sun. As such, the company’s acquisition of TrialWest could be a boon since a substantial portion of the revenue from the upcoming trial will now remain with Resonance.

Management added that the new contract with Sun shines a light on the group’s strategy of providing its technology and services to the flourishing and highly technical clinical trials markets, and more broadly for the global pharmaceutical industry.

According to the company, the global clinical trial market is projected to reach US$887 billion in value by 2032, equating to a compound annual growth rate of 7.2 per cent.

Resonance expects to pocket a first payment of about $2 million within 30 days of entering the agreement with Sun. The remainder of the funds are subject to a standard regulatory tick of approval for commencement of the trial, such as consent from the Australian government’s Human Research Ethics Committee.

Resonance Health chief executive officer, Andrew Harrison, said:

“The Agreement is a direct result of the incredible work the team have done in executing the existing clinical trial with the customer and more broadly the Company’s focus on winning more work in the global clinical trials ecosystem. This illustrates our ability to win repeat work from customers, and our capacity to scale the size of contract wins.”

The new agreement with Sun builds on a previously announced collaboration between the pair in August last year. Here, Resonance was contracted to provide CRO, laboratory analysis, and imaging services in a $6.33 million deal with the Indian pharmaceutical giant.

Founded in 1983, Sun has grown to become the fourth largest generic pharmaceutical company in the world with its reach spreading to more than 100 countries around the globe.

Today, the company provides over 2000 generic and specialty healthcare products with its operations supported by 43 manufacturing facilities and more than 40,000 employees worldwide.

During the 2024 financial year, Sun generated about US$5.7 billion in revenue and more than US$1 billion in net profit.