DATATRAK International Inc. (OTC: DATA.PK) is a clinical trials information technology (IT) and services company that is focused on increasing its share of an estimated $720 million (M) Electronic Data Capture (EDC) market opportunity (with about 50% or $360M of this market still utilizing paper records that have yet to convert to make the digital conversion) (Source: Credit Suisse Industry Report, August 2009). The EDC market is dominated by Phase Forward (NASDAQ:
PFWD) and Medidata Solutions (NASDAQ: MDSO), which have over two-thirds combined market share.
DATATRAK has taken a unique approach of delivering its products and services through a single platform known as DATATRAK ONE. DATATRAK ONE offers one vendor, interface, and database for its clients to minimize expenses, increase efficiency and simplify the IT infrastructure as a third alternative to its two larger competitors with plenty of room to increase its market share of a growing EDC market. The EDC market is estimated to grow at 15% per year through 2012 with an estimated 80% share by 2011 as paper records are converted to digital and a total estimated market opportunity of $1.4 billion in 2012 (Source: William Blair Industry Report, March 2009).
Several long-term trends in the bio-pharmaceutical industry and the drug development process are key underlying factors in the growth of the EDC and clinical trial management market, including the factors outlined below.
1.) Expediting the drug development process in order to get drugs to the market quicker or halt development to conserve resources if safety issues or lack of effectiveness occurs.
2.) Bio-pharmaceutical companies are focusing their time and efforts on the drug discovery process, R&D, and / or marketing activities while outsourcing the process of managing clinical trials / data for cost savings benefits and more efficient, streamlined operations.
3.) Outsourcing the process of IT / data management and clinical trials management makes this process a variable cost that is only present when an active study is ongoing.
4.) Advantages of digital conversion from paper recordkeeping speeds up the process of data access and sharing.
5.) The increased focus by the FDA on post-marketing safety surveillance, adverse event / drug safety monitoring and post-approval safety trials –
see this PR from the FDA in early September for an overview and links to the post-marketing study and reporting requirements.
DATATRAK has made significant improvements since 2006 when the Company derived nearly half (44%) of its revenue from a single client.
