Medidata acquired by French software firm Dassault Systèmes for $5.8bn
As per the transaction – which is expected to be completed in the last quarter of 2019 – Medidata will become a wholly-owned subsidiary of Dassault Systèmes, a software company headquartered in France.
NY-based Medidata will continue to be led by its co-founders Tarek Sherif and Glen de Vries, who will report to Dassault's EVP, CFO and corporate strategy officer, Pascal Daloz.
“As the life sciences industry shifts its focus to personalized medicine and patient-centric experiences, we believe scientific innovation and industrial performance call for a unified new approach,” said Bernard Charlès, vice chairman and CEO of Dassault Systèmes on a joint conference call this morning.
Dassault is looking to create “the first end-to-end scientific and business platform for the life sciences industry,” said Daloz.
Through its “3DExperience” platform, Dassault currently delivers 3D design, engineering, modeling and simulation as well as data and process management applications. Medidata’s products will be integrated into this platform, though there are no timelines yet for when this will happen, explained de Vries.
Daloz said, “Medidata then brings its significant capabilities in clinical testing,” as well as “critical assets” in commercialization.
The power of modeling and simulation
Combining the “power of modeling and simulation” with Medidata’s real-world evidence analytics capabilities – expanded through its acquisition of Shyft Analytics in March of this year – Charlès said the companies will “demonstrate together how the virtual world will catalyze the next generation of patient-inclusive therapeutics.”
He further described the combination as a “profound catalyst to personalized health, patient-centric experiences, and the next standard of medical practices.”
“Data science has to be correlated to modeling and simulation,” Charlès said, noting that it will still take years to develop “the perfect model.”
“Today when we do modeling and simulation for an airplane we know this flight is going from A to B … In life sciences, it’s not the case,” he added.
And this path is only poised to become more complex: “There are complexities beyond just the clinical trial complexities we’ve been managing to date,” said de Vries, citing the supply chain as one example. As more cell and gene therapies and personalized therapies advance, “medicine is going to be struggling with processes that they just don’t know how to scale,” he explained.
“There are ways we can, should, need to look, at much more sophisticated level, at that interaction of drugs and devices” to optimize the therapeutic value of every dollar invested in research and development, de Vries added.
David Windley, CFA, CPA, equity analyst at Jefferies LLC, said the 3DExperience suite “appears to be complementary to [Medidata’s] platform, in that it does appeal to the product development process, but at the discovery/innovation end of the process.”
Though Medidata’s product suite is broader, “as is its biopharma customer base,” he said, noting that its products “are almost exclusively focused further downstream on clinical trial enablement.”
“As a result, we don’t see market share overlap issues that would hinder this deal,” Windley said.
Overlapping capabilities have previously posed challenges, notably in Oracle’s 2012 takeover of Phase Forward. Following the $685m acquisition, Oracle had two EDC systems, RDC and InForm.
“While Oracle’s EDC-related investments are focused on InForm, Oracle continues to accept new RDC clients, likely confusing the marketplace and, perhaps, agitating existing InForm customers,” Sandy Draper, equity analyst at Raymond James, wrote after DIA in June 2012.
Sherif spoke to Outsourcing-Pharma following the reported problems, noting that big eClinical mergers can succeed if the alignment is right: “M&A in the eClinical space, no matter the size of the transaction, can be successful when approached through a disciplined analysis of business and technology alignment,” Sherif said at the time.
According to reports, the eClinical market is expected to reach $13bn by 2024, fueled by new entrants and consolidation.
Dassault's expansion into life sciences
According to Charlès, combining with Medidata was the next natural step for the Dassault, which has been expanding its presence in the life sciences industry through multiple investments since 2010, building off its medical device modeling and simulation capabilities.
As part of this, the company launched “BioIntelligence,” which focused on collaborative discovery and preclinical modeling and simulation oncology, with leading pharmaceutical companies,” said Charlès.
In 2014, Dassault unveiled its Biovia brand, which combined its BioIntelligence capabilities with its acquisition of the software solutions provider, Accelrys.
The company soon thereafter signed a five-year collaborative research agreement with the US Food and Drug Administration (FDA) as part of its Living Heart Project – for which Bayer, Boston Scientific, and Pfizer are among project members – to develop in silico heart models to aid in the diagnosis and treatment of cardiovascular disease. In 2017, the Living Heart was used to simulate drug interactions affecting organ function.
Most recently, Dassault in 2018 acquired CosmoLogic in a deal that added fluid phase computational chemistry software capabilities to its lineup.
Following the completed acquisition of Medidata, life sciences will become the company’s second largest industry segment, following transportation and mobility.
Charlès said, “As we think about the life sciences industry and the broader ecosystem around health care, the opportunity for our company over the coming decades is significant.”