Quarterly operating profit was up 25 per cent year-on-year as Medidata continued the trend seen in the first six months. Medidata plans to continue growing by selling new software to its base of Rave electronic data capture (EDC) clients and as such is expanding its product portfolio.
“Is there a possibility of more tuck-in M&A? Absolutely, as we see things that are interesting to us and if we can speed time to market by doing that, we'll go out there and buy the technology”, Tarek Sherif, CEO of Medidata, said in a conference call with investors.
This year Medidata bought Clinical Force, its first acquisition since going public, and the deal added 18 clients in the quarter. Clinical Force sells a software-as-a-service (SaaS) clinical trial management system that Medidata thinks can replace “costly, highly customised legacy client-server technology”.
Strategic outsourcing opportunity
Medidata claims the move towards more strategic outsourcing is supporting the shift to SaaS. “Our installed customer base has been proactive about moving their strategic relationship partners to use Rave more frequently”, Sherif said.
As pharma sheds “longer term embedded solutions” in favour of outsourcing to CROs, many of which work with Medidata, the company claims its Rave EDC is winning market share. Sherif expects this trend, coupled to uptake of new products, to drive “healthy growth in 2012”.
Sandy Draper, equity analyst at Raymond James, said before the third quarter investors expected “low double-digit top-line expansion in 2012” and were uncertain of “the pace of new solution uptake”. Medidata is yet to give 2012 guidance but investors were reassured by its comments.
Shares in Medidata closed up 10 per cent.