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Medidata beats Q2 expectations following landmark $100m contract

By Natalie Morrison , 01-Aug-2012

Medidata beat analyst expectations in this year’s Q2 results after inking a five-year $100m clinical cloud deal – the largest in the firm’s history.

The deal – with an existing but as yet unnamed top ten pharma customer – meant the firm’s revenues finished at $53.5m for the quarter, up six per cent from Q1 and beating the top bracket predictions.

In addition, the company signed 33 new customers in the quarter, though unlike the landmark deal, they were with small to medium enterprises.

The firm puts the uptick in sales down to an “increasing customer acceptance of Medidata's clinical cloud platform”.

The technology is designed to help pharmaceutical, biotech and medical device companies perform clinical research more effectively at a cheaper cost.

CEO Tarek Sheif said: "Medidata's stellar second quarter results clearly demonstrate the value of our cloud-based platform, evidenced by significant customer growth and a landmark nine-figure contract.

“Our execution is reshaping the competitive landscape and in the process building sustainable competitive advantage for Medidata.”

The firm has now lifted full-year revenue to between $217m and $219m, up from previous guidance of $213m and $217m.

However Garen Sarafian, VP of healthcare technology and distribution at Citi Research believes the $100m figure is not as impressive as first thought.

He said: “Medidata won its largest contract to date with a current top ten pharma client, that while impressive is a more realistic $57M in guaranteed sales over three years excluding optional renewals”

Nevertheless, Citi still predicts an incremental $10m, $15m, and $25m in revenues for 2013- 2015 for the firm, “as the win with its current client expands to its new run rate.”

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