The DataTrak account executive had been optimistic. Even confident. But then the call came. The news was bad. The contract had gone elsewhere.
And who won the business? DataTrak CEO Jeffrey Green heard the name of the victorious vendor: ClickFind. “I said, ‘Who the hell are they?’ “ Green recalls. Soon he rang up ClickFind and started a conversation. Seven months later, DataTrak bought the once-obscure company for $4 million in cash and $14 million in DataTrak stock.
The ClickFind acquisition, Green says, grew out of DataTrak’s assessment of the current urgency in the EDC market. “There is window of opportunity over the next 18 months to be able to offer a complete and unified architecture,” Green says.
“Unified” is his mantra. At DataTrak, the innocuous word “integrate” verges on being an epithet, a slur. Green’s notion is to help customers choose only the functions they need on an à la carte basis. But everything runs out of one application, one database, one username, one password. Enterprise software is not a new idea. But in pharma, where best-of-breed and point solutions have been the norm, this will be unexpected.
What’s more, the build vs. buy analysis to the acquisition of ClickFind was stark. DataTrak could have created its own version of what ClickFind had with an investment of three years and $5 million. But that would have missed wooing potential customers in the meantime.
For Green, the deal became a way to ensure that the company’s vision was synchronized with what it could offer customers. “DataTrak is a well-proven point solution,” Green says. “If we had to remain true to the vision we saw, with the world wanting a platform with multiple capabilities, we fell short. We had to fix that.”
The key concept, for Green, is that DataTrak can now offer the industry a “unified” (he repeats it a lot) solution. The vendor need not claim to integrate a mishmash of technologies designed or acquired over the years. That’s what his competitors tend to do.
From a vendor perspective, very few companies are in a position to replicate everything DataTrak has. DataTrak already provided global services on an application service provider (ASP) basis. And ClickFind studied every major niche, every last technology subcategory in clinical trials. Then it built a Web-based equivalent. That effort was audacious and seems to have impressed Green. “We now have the broadest platform in the industry,” he says. “We are basically leapfrogging over our competition. We call this a game-changing event.”
Green is not known for meekness or a hesitant style of speech. He believes that DataTrak can now offer just about anything except garage door openers. The company’s clinical suite provides, on an à la carte basis:
electronic data capture (EDC)
group collaboration tools: file management, portals, email
electronic case report form (eCRF) booklets for enrolled patients
electrocardiograms (ECG) automatically incorporated into each patient’s eCRF book
clinical data management system (CDMS)
inventory management
patient randomization
medical coding
XML based interactive voice response system (IVR)
image management
laboratory data management
basic safety data management system
project management and basic clinical trial management system (CTMS)
automated EDC startup from Excel spreadsheet
paper-electronic “hybrid” studies
custom reports
DataTrak can’t do document management or manage payments to investigator sites, but the company is working on that. To be fair, some of the largest clinical trial technology companies can also offer similarly expansive combinations of offerings. Even a smallish company like DataLabs recently acquired Broadpeak and rolled its CTMS solution up with its existing EDC tools.
Still, we’re not aware of any vendor that can match DataTrak feature for feature. Large and established companies like ClinPhone, etrials, Oracle Clinical, Medidata and Phase Forward all have elements of what DataTrak possesses, even market-leading pieces in some cases. But in all but Medidata’s case, DataTrak competitors require that customers rent or acquire multiple applications. Multiple databases. For some sponsors, that’s fine. For others, it’s nuts.
Says Green: “A customer doesn’t have to buy everything. It’s modular. If you want EDC and ECG, you can do that. It is all under one architecture. You pick the functionality you want.”
Green’s core belief is that some day soon, people will not want to regularly export data from system ABC and import it into system XYZ. Data integration in clinical trials, he says, never really was efficient, even when the vendor had high hopes, or large pharmas threw hundreds of people at the job.
One element of DataTrak’s due diligence was anecdotal. An external consultant contacted ClickFind users, and was surprised at the level of enthusiasm. “The references from ClickFind customers were off the scale,” says Green.
Green was asked about potential challenges for clinical technology vendors that have either become public or that are rumored to be considering that. Welcome to another level of paperwork, he says. Complying with Sarbanes-Oxley cost DataTrak $600,000. For months, Green arrived at his own headquarters and had no idea if a new face was a DataTrak employee or a consultant working on Sarbanes-Oxley. (Some estimates, he says, put the total U.S. cost of complying with the law at $1.4 trillion.)
Green also notes that private companies that decide to become public will have less latitude in financial statements. Such companies will have more difficulty claiming rapid growth rates in press releases that do not contain hard numbers. “You can’t hide your financials any more and say you have 60 percent growth rates,” Green says. “Everything will be exposed. The name of the game is leverage and earnings. It’s not giving away your technology to buy market share.”
In general, Green reports, demand for EDC is as brisk as he’s ever seen. For the first time, some customers are not expecting that DataTrak mount a vast, triumphant Broadway musical in response to an ordinary RFP. Instead, they’re emailing in orders for repeat business.
We can offer no prediction on how well DataTrak will execute its we-can-do-everything strategy. But if the company can deliver on its vision, DataTrak could leverage the internet, existing facilities and services, and its new ClickFind tools to win some nice contracts. If it works, the Ohio company appears to have the potential to significantly simplify the existing clinical trial technology landscape for all but the very largest sponsors of clinical trials. Many industry giants remain attached to homegrown applications. For all other sponsors of clinical trials, it could be tempting to take a look at what new tricks the familiar DataTrak dog can do now.
Related Story:
DataTrak Acquisition of ClickFind: Part Two