Cloud-based solutions provider Medidata saw its revenue increase 22% over Q2 last year to $83.2m as the company’s customer base saw steep growth.
Medidata's customer base grew to 437 companies, with 30 new clients added in Q2 of 2014, which is an increase of 50% over the number of new clients added in Q2 of 2013. Partners continue to increase their commitments to Medidata for their technology outsourcing, with two top CROs signing enterprise deals.
Tarek Sherif, Medidata's chairman and CEO, also singled out in the conference call Salix, a leading specialty pharma company focused on gastrointestinal disorders, eye care developer Alcon, as well as Samsung and Hanmi -- two leading Korean pharmal companies – as examples of companies adopting Medidata solutions.
“We saw particularly strong new client growth in our midmarket and partner segments in the Americas and Europe as economic conditions improved,” Sherif said on the call, noting that the company has seen more intra-year renewals this year than last year.
President Glen de Vries added: “Life sciences companies and CROs are turning away from their large on-premise installations, in some cases turning away from smaller and less fully functional systems, and they are moving to our easy to adopt modular highly scalable CTMS cloud.”
Fifty-four percent of customers had committed to multiple products at the end of Q2 2014, up from 45% at the end Q2 2013.
Investment analysts also sounded upbeat on the results. Garen Sarafian, VP of health tech and distribution at Citi Research, said in a note to investors: “While there were a couple imperfections, executing against its plan and reiterating guidance with near 90% visibility to the midpoint of 2014 sales guidance is impressive. Any large ‘platform’ deal is essentially a free option, as it is neither in results nor in current guidance.”
The company’s 60 new clients in the last six months, according to Sarafian, also “implies not only strong market acceptance, but a great source to whom it can execute its strategy of further cross sell, currently at 2.4 products out of about 12 main product portfolios and increasing.”
“The company remains very optimistic of the market demand in larger, all encompassing ‘platform deals’ that can be 3-4x the size of traditional deals, but cautious on timing due to the complexity of such deals,” Sarafian said.
Pharma Consolidation, Transparency
Sherif highlighted the recent M&A activity in the life sciences sector and said the company continues to benefit “from many of the same positive trends we have seen over the past 18 months, including an improving funding environment for biotechnology companies and increased focus on improving drug development efficiency. We see this reflected in increased deal activity, new customer wins and greater multi-product adoption.”
“The key takeaway is that life sciences companies are now making the changes they need to ensure their long-term viability and more will likely follow as the industry refocuses on driving greater value and throughout development,” Sherif said.
As far as pushes for more clinical trial data transparency, de Vries sounded upbeat on the prospects, noting that “this idea of increased data transparency and collaboration is awesome. Frankly it's creating demand for some of the things that we've actually been doing for more than a decade. So we see our role – and not just Medidata but certainly as one of the key people who fulfills that demand.”