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Accel-KKR invests in medical software maker

IntrinsiQ, a maker of medical oncology care software, will be the first investment for Accel-KKR in the healthcare information technology sector.

Menlo Park, California-based Accel-KKR has made a majority investment in IntrinsiQ, a Boston-based producer of software for cancer treatment. Financial terms were not disclosed.

IntrinsiQ is the market leader in medical oncology (cancer treatment) software and the only source for automated longitudinal data on trends in cancer drug usage. Founded in 1996, the company’s software provides business analytics and market data to the pharmaceutical and biotechnology industries, with major clients including BMS, Genentech, Pfizer and Sanofi-Aventis.

The company’s proprietary medical oncology care software, sold under the IntelliDose brand, manages the chemotherapy doses which patients receive at their oncologist’s office.

“Chemotherapy drugs, because of their potential toxicity, are usually given in a doctor’s office and closely monitored,” said Accel-KKR managing director Thomas Barnds. “This software allows physicians and nurses to track which drugs are being administered. It reduces administrative time, and what is very interesting about the software is it captures all of the information in it, then becomes the only source for longitudinal data on oncology drugs.”

Barnds said this data can then be used by the pharmaceutical and biotech companies to determine how large of a potential market they have for new drugs and how their drugs are being utilized. He estimated that despite the potential of the software, only ten percent of oncologists are using this type of system. The rest are still using a paper trail.

Barnds added that the healthcare information technology sector has had trouble making headway in the past because the healthcare sector has been historically a bit slow to adapt new technology, but he sees that new types of technology to automate the processes in doctor’s offices are moving from the early adapter phase into the mainstream.

“We think it’s a very interesting market,” he said. “We would consider the healthcare information technology market a fairly fragmented one, and one that would be ripe for further investing via private equity firms.”

Accel-KKR was founded in 2000 by senior partners at venture capital firm Accel Partners and private equity firm Kohlberg Kravis Roberts. The firm is in the midst of raising its second fund. According to SEC filings from February of 2005, the firm is targeting $200 million for the new fund, Accel-KKR Capital Partners II.