Medidata Solutions Inc (MDSO-US): Hyperion’s Monthly Portfolio Holding Focus

Portfolio Holding Focus: Medidata Solutions Inc (MDSO-US)

Medidata Solutions Inc develops cloud-based software solutions for clinical research. Its customers include over 950 pharmaceutical companies, biotechnology, medical device and diagnostic firms, academic and government institutions and contract research organisations. The company is headquartered in New York and has offices in the United States, the United Kingdom, Japan, China, South Korea and Singapore.

Hyperion’s View:

MDSO-US’s Clinical Cloud product is the primary technology solution for clinical trials for 18 of the world’s top 25 global pharmaceutical companies and is used by 18 of the top 25 medical device developers. Clinical Cloud is used throughout the development cycle from study design and planning through to execution, management and reporting. The company’s penetration of top pharmaceutical and medical device developers combined with its scale, make it the global leader in providing a platform for life sciences companies to run clinical trials.

MDSO-US’s value proposition to life sciences companies is clear – an automated, scalable solution for running clinical trials increases efficiency resulting in faster trial results, reduces redundancies, improves data quality by reducing error, maximises visibility and consolidates workflows. The quality of the product suite and its capabilities are key differentiating factors in the market, which combined with warehoused data from more than 14,000 clinical trials form the basis of the company’s competitive advantage. Having this critical mass of data creates a virtuous cycle of innovation capability and demand, where MDSO-US is able to leverage data from historical clinical trials to increase the speed and quality of future trials at lower cost to the customer – in turn driving increased demand, more data and increasingly sophisticated products. In addition, having the full product suite on an integrated platform removes significant friction and regulatory risk currently faced by trial sponsors in using multiple stand-alone software solutions. Client retention is very high at 99%, reflective of MDSO-US high quality offering.

The company has a large, global addressable market with relatively weak competitors which are mostly conventional enterprise software firms. MDSO-US has growth opportunities in both increasing the numbers of new clients and also increasing the number of products existing clients use, the latter of which will contribute to a higher proportion of long term growth. Management continues to invest in research and development and foster an innovative culture.

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