For the second quarter 2015, cloud-based clinical data firm Medidata reported record sales of $98m (€89m), up 18% on the same period last year.
However, net income fell 34% to $1.5m - due in part to a 30% increase in R&D spend to enhance the firm's data analytics and risk based monitoring offerings - and the firm’s share price dropped by almost 6% following the announcement.
Despite this CEO Tarek Sherif told stakeholders he was feeling “bullish about the future” due to current industry trends.
“In 2014, global life sciences spent on research and development grew nearly 5%. This is the largest increase since 2010 and runs counter to the prevailing sentiment a short time ago that cost cutting would lead to a flattening or a contraction in spending,” he said, while discussing results.
Furthermore, “unlike other industries where M&A tends to depress R&D spending due to rationalisation, the life sciences industry is increasing its level of investment as well-funded acquirers look to accelerate new products to market.”
These trends are anticipated to continue, which, when coupled with increased investment in the life science sector - Sherif said there was $7.2 billion of biotech IPO activity in 2014 – would support Medidata’s long-term growth prospect.
To demonstrate these trends, Sherif used the example of Medidata customer Celgene and its recent $1bn collaboration with Juno Therapeutics and $7bn acquisition of Receptos, both also Medidata clients:
“All three companies recognize the value creation that comes from disruptive technology and innovation, as well as the benefits it brings to all stakeholders including patients,” he said.
For the quarter, Medidata added 52 new customers, including drug companies Mallinckrodt and Aspen Pharmacare.
Medidata has also signed an agreement with Durham, North Carolina-based Validic to integrate its digital health platform with its own clinical cloud software.
The deal will expand Medidata’s mobile health (mHealth) tool belt, aiding the collection and use of clinical patient data collected through sensors, wearable and apps, including Garmin, Fitbit, Jawbone, and Withings devices which are all compatible with Validic’s platform.
The collaboration “expands the ecosystem of mobile health devices that can now be made easily available for use in clinical research,” Medidata President Glen de Vries said during the call.
“We think that’s a great step in our commitment to paving the way for customers that quickly adopt these innovative technologies… Data from [Validic’s 175 sensors and variables] can now be integrated in to any study in the Medidata cloud.”