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eClinical Solutions: Software & Technology for Bringing New Drugs to Market Faster and Cheaper

Friday, September 21, 2018   (0 Comments)
Posted by: Gary Hotze
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Joseph Munda, Senior Research Analyst, First Analysis

 

In our efforts to help build great companies through our venture capital investments and our investment banking services, we at First Analysis regularly work to identify emerging growth domains where we can have high impact in creating value for investors, entrepreneurs, enterprises, and their customers. Among the most promising areas we’ve worked in, both concerning growth potential and benefits to society is an area called eClinical solutions. eClinical solutions help minimize drug development costs and improve efficiency by automating and streamlining the clinical trial process for new drugs and other medical technologies that require regulatory approval.


The process of developing a new drug or medical technology is inefficient, complex, bureaucratic, and expensive. According to the Tufts Center for the Study of Drug Development, it takes an average of $2.6 billion, including the cost of failures, and 10-15 years to discover, develop, and win approval for a new drug. Additionally, only one of every ten drugs that start trials ends up being approved by the FDA. According to EvaluatePharma, worldwide pharmaceutical research and development spending totaled $157 billion in 2016 and is expected to grow at a 2-3% annual rate through 2022. Of this amount, we estimate the clinical development spend at $60 billion; this is the focus of eClinical solutions.


We’ve identified more than 25 processes in the clinical trial workflow eClinical solutions providers are tackling. The solutions typically involve replacing paper-based data collection, storage, and management and highly labor-intensive processes with software -- often cloud-based software. Some of the answers are relatively simple, such as necessary software for collecting clinical trial data in an electronic format. An example is a smartphone app where a clinician enters a patient’s birth date, height, weight, and other fundamental data.


Other solutions are more complex, such as sophisticated systems to pinpoint trial sites at high risk for error or fraud. Traditionally, weeding out error and fraud in clinical drug trials has meant hiring dedicated personnel to travel from clinic to clinic where a test is being conducted to ensure each clinic is keeping records and following procedures under strict standards and governmental regulations. These clinical research associates typically visit each site every 4-8 weeks. It’s a time-intensive task involving comparing data presented in trial report forms to source data such as laboratory notes, pharmacy dispensing records, and consent forms. The industry spends an estimated $8 billion each year on this process, accounting for ~15-30% of trial costs.


But with an approach called risk-based monitoring, companies sponsoring new drug clinical trials can use software to statistically monitor trials from a centralized location, allowing sites and tests to be examined and compared virtually to identify and focus resources on those sites most at risk for error or fraud. Relative to the traditional approach, this substantially reduces trial costs while achieving the same or higher level of trial integrity.


Given the size of the opportunity and the critical role of new drug development in society’s efforts to address rising health care costs and the health needs of an aging population, dozens of exciting and promising companies are attacking the challenge of using software and internet technology to make clinical trials more efficient and successful. With our extensive history working with software, internet, and medical and pharmaceutical technology companies – including our partnerships with highly successful and transformative clinical research organizations dating to the early 2000s, we foresee abundant opportunity to be a leader in helping these companies realize the enormous potential of eClinical solutions.


First Analysis has a nearly 40-year record of serving emerging growth companies, established industry leaders, and institutional investors in its focused areas of domain expertise, both through its venture capital investments and through First Analysis Securities Corp. (FASC), a registered broker/dealer with FINRA and member SIPC that provides investment banking services and institutional equity research.

 


 

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