For the first quarter 2015, the cloud-based Electronic Data Capture (EDC) firm reported sales of $92m (€85m), up 21% on the same period last year. Medidata also added 39 new customers during the quarter, pushing its base to 516 clients – up 23% year-on-year.
According to CEO Tarek Sherif, about half of all electronic trials run today use the firm’s technology platforms and there are opportunities to increase penetration further through pushing current client relationships from simple service contracts to more strategic partnerships.
“Strategic partner relationships are becoming an increasingly important part of executing on our platform vision, giving our clients the kind of structural support they need to be successful,” he told investors on a call discussing the firm's "record financial and operational results" last week.
However, “this quarter wasn’t driven by a series of extraordinarily large deals,” Sherif said, but rather by “a number of customers who moved to enterprise agreements from single study agreements.”
Sherif also said during the quarter he had spoken to executives at two leading biotechs – both of which are current customers – as to how a more entwined relationship was helping bring an integrated technology offering to the execution of their clinical trials.
“These conversations help to validate growing their development pipelines,” he said. “They confirm that we are making investments in the right areas, and that we are increasingly viewed as a strategic technology provider.”
“We’re running a lot of trials, but we’re not running all the trials,” Sherif said, adding there are untapped areas its cloud-based technology could tackle, including upselling, randomization and risk-based monitoring.
“People talk about doing risk-based monitoring, but typically they’re doing it on spreadsheets, and that’s not scalable when you think about the thousands of trials that are out there, nor about the risk they are taking on.
“We’re creating a new industry. The penetration rate there, you can’t even put a number to it, it’s so low. So we think there’s a huge opportunity.”
Citi Research analyst Garan Safarian agreed in a note that additional services left plenty of scope for Medidata.
“Upselling to its current client base is one area of opportunity, where overall penetration rates are stated to be in the low single digits, with full adoption of its platform a 3-4x revenue opportunity.
“Adding to its product line is adding to this market opportunity, with risk-based monitoring alone expected to equal the size of the $2bn Electronic Data Capture (EDC) market.”