DATATRAK Continues to Impress
U.S. drug companies spent $39.4 billion on research and development in 2005. DiMasi, Hansen and Grabowski (2003) estimate the cost of bringing a drug from phase I to market. Their data come from the Tufts Center for the Study of Drug Development (CSDD). The final estimate is that it costs–including the expense of failed drugs–$802 million to take a drug from phase I trials to approval. Over 50% of this figure is the cost of capital needed to finance the R&D over such a long period.
By 2009 health economists peg the current cost of drug development at US$1.3 billion, others at US$1.7 billion. It costs more than a billion dollars to overcome the 1-in-5000 odds of a new chemical compound making it to market. (About two-thirds of which is true research and development costs).
Criticism of studies that produce numbers in the billion-dollar range are numerous, but virtually all can agree that bringing a drug to market is expensive. Beyond the cost issue lies the sheer confusion of getting the right systems connecting with one another as evidenced by the following eClinical Landscape slide.
The real key for drug development is to get your winning drugs to market faster and to quit your losing drugs sooner. For that you need a unified system.
DATATRAK International, Inc. (DATA) is a global technology and services company delivering electronic clinical (eClinical) solutions to support clinical research. Its software suite and service offerings are used to collect, review, report, store and submit to regulatory agencies clinical trial data electronically. While the competition uses an integrated heterogeneous solution (information silos), DATATRAK uses a unified system. The result is seamless communication, optimized data flow and lower costs. The products within the information silos were never designed to work together and "Real time" communications per customers is more like 24 hrs…not bad, but if a patient in site #102 is having an adverse reaction and a similar patient at site #3 has the potential to suffer a similar event…the “not bad” could cost a life.
Progress Continues
DATATRAK’s unified system is clearly superior to integrated solutions. That said maybe the firm is not yet seeing explosive top–line growth right now because firm’s look at the financial power of a firm trading on the pink sheets. It is important to realize just how far DATA has come since 2008. Just three short years ago backlog was trending down, the firm was incurring losses, had a $3 million dollar balloon debt payment due, and cash flow was negative $1.8 million. Flash forward to the recently completed 2010 and the company shows backlog trending up, no balance sheet debt, a profit, and positive cash flow. As these metrics continue to improve the growth will follow.
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