It costs about $1.8 billion to bring a new drug to market, with more than 90% of that spend on clinical trials. It’s a huge process, made all the more complicated by the myriad databases and software programs researchers use to track and analyze the results.
Today, we’re partnering with a company with big plans to make it easier to run trials.
Comprehend, which has innovative reporting, analytics and collaboration software, has been on our radar screen since 2010, when we met Rick and Jud at YC. We were re-introduced earlier this year and since then we’ve watched leads turn into pilots and pilots turn into purchase orders.
It’s no secret that more tasks are getting automated through software and that more software is moving online. While there are now many big software-as-a-service companies like ServiceNow and Workday, they tend to be focused on horizontal processes like information technology and human resources that cut across all companies.
At Sequoia, we think it’s still the early days of this transition. In particular, we think there’s going to be a next generation of SaaS companies targeted at specific industries and processes unique to some verticals. There are already a good number of these already, including some that are already public. (No one tends to think of them as vertical SaaS companies, but that’s what OpenTable, Trulia and Zillow are.)
Life sciences is particularly fertile ground for these kinds of services. It’s a large, information-intensive industry with very specific requirements and regulations.
That’s especially true of the clinical trials necessary to bring a new drug, device or diagnostic test to market. It takes years of testing once a promising drug is discovered to run all the necessary studies. The data are often collected by scores of different researchers and loaded into multiple databases. Study managers don’t have a way to track results in real time, clinicians aren’t able to collaborate easily and the tools statisticians need for analyzing results are expensive and don’t work well.
It’s a slow and complicated process with huge stakes: Each day that a blockbuster drug stays off the market is worth more than $20 million in lost sales.
Rick and Jud have come up with an elegant way to speed things up. Their online service pulls data from existing databases in real-time. Researchers with no special computer knowledge can track a study’s progress and more importantly analyze the data as it comes in.
It’s faster than the old way. Better yet, it helps researchers spot problems earlier, allowing them to pull the plug on unsuccessful trials without wasting extra money.
And with 18,000 studies launched each year and hundreds of thousands underway at any given time, there’s a large potential market.
Rick and Jud are technically savvy. Rick helped build the analytics tools the FDA uses and Jud has been a CTO before and has years of industry experience. Best of all they’re scrappy. We’re impressed by their product, their passion and their knowledge of the clinical-trial process. And we’re excited to be in business with them.
Warren Hogarth on behalf of Sequoia.