Sanofi deal bolsters Medidata in record quarter for revenue
Sanofi ($SNY) has decided to use Medidata Solutions' ($MDSO) clinical trials software throughout the French drug giant's R&D group. The deal was one of the highlights in Medidata's third-quarter earnings report and preceded a rally of the software company's stock Wednesday.
Medidata sealed deals with Japanese drugmaker Otsuka Pharmaceutical and Sanofi during the third quarter, adding to the roster of top-25 pharma companies that use the company's software. Sanofi is also using some of Medidata's cloud-based software as the drugmaker seeks greater productivity from its development organization, and the list of technologies it plans to adopt include Medidata's flagship electronic data capture system called Rave as well as an adverse-event reporting system, Safety Gateway, among other tools.
Medidata's stock shot up 12% to $42.02 on Wednesday, as investors reacted to some positive revenue and customer growth news in its third-quarter earnings announcement. The company's revenue jumped 21% in the quarter to $55.8 million from $46.3 million in the same quarter a year ago. It wrapped the quarter with 333 customers, up 28% from last year. On the down side: Net income shrank 46% to $4.1 million or 16 cents per share compared with $7.5 million in the third quarter last year.
As The Associated Press reported, citing FactSet, analysts forecasted 31 cents per share and $56.1 million in revenue for the quarter.
Sanofi's choice to adopt cloud-based technology from Medidata comes as the Paris-based pharma group streamlines its R&D organization, reducing jobs in France and boosting research in places such as China. Cloud-based software is hosted remotely on servers outside of the user's organization. In theory, cloud-based software relieves the user of having to manage the software on local servers. It may also offer greater flexibility because users can tap cloud-based software from Internet-connected devices, regardless of their location.
"In combination with accelerating multiproduct adoption by new and existing customers," Medidata CEO Tarek Sherif stated, "it is clear that life sciences companies are increasingly relying on the Medidata Clinical Cloud to achieve improved productivity and competitive advantage in their clinical development efforts."