While clinical trials can pose challenges for pharmaceutical companies, they are also spelling opportunity for venture capitalists.
Several startups focused on technologies making the clinical trial process more efficient have formed in recent years, collectively raising about $68 million in the past two years alone. As more pharmaceutical companies are open to adopting mobile tools, these startups are gaining a higher profile.
In March, one of those companies, Clinical Ink Inc, raised $20 million in a Series C round led by MPM Capital that also included participation from F2 Ventures and FCA Venture Partners. Clinical Ink, which is based in Winston Salem, N.C., and has an office in Philadelphia, has developed electronic documents recording software for recording source data on mobile devices during clinical trails.
MPM Capital also invested in TriNetX Inc, which raised $13 million last June along with F2 Capital Ventures. The Cambridge, Mass.-based company is building upon an existing big data platform to optimize clinical trial design and recruitment processes.
And in March, Swedish clinical trial recruitment company Trialbee raised $5 million in a Series A round of financing that included participation from existing investors Industrifonden and Briban Invest as well as Startupbootcamp. The company had previously raised about $3.2 million in seed funding. Trialbee provides mobile and Web-based tools for clinical trial recruitment, online study feasibility evaluation, study retention and electronic data capture.
Todd Foley, managing director with MPM Capital, said that the current and “very cumbersome” clinical trial field is ripe for improvement.
“The clinical trial space is still pretty old-fashioned in terms of its reliance on technology,” said Foley, who joined Clinical Ink’s board.
While investment dollars have traditionally gone toward drug discovery and drug development, more investors are recognizing the opportunity in the clinical trial business, which Foley estimates is a $100 billion market. Many companies struggle with finding patients to participate in trials. Retaining those patients can also be a challenge.
Clinical Ink, for example, “can take a big bite out of the cost and improve the trial process overall,” he said, “by capturing trial data on tablets and smartphones and helping keep patients engaged.” Up to 30 percent of trial costs are related to site monitoring, according to Foley.
To Foley, the value proposition is clear.
These startups are “taking patient trials out of the dark ages,” he said. “A lot of money is being spent on clinical trials and anything you can do to get them done faster and cheaper is huge money and can help cure patients faster.”
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