Fast growth and low barriers to entry have driven the rise of niche eClinical start-ups – leading to more than 40 vendors exhibiting at DIA – but these firms face intense competition from established players. Over the next decade these leading companies are predicted to win market share from smaller rivals.
“We ultimately expect consolidation around two or three major eClinical suites as employees become skilled on the leading platforms creating a network effect,” Tim Evans, equity analyst at Wells Fargo, wrote in a note to investors.
The theory is that after biopharma firms have invested time and resources to train staff on a particular eClinical suite – or hired people already skilled on a leading system – they will stick with that platform.
Over time this will see the top three players take market share – maybe up to two-thirds within the next decade – at the expense of niche competitors that are unable to provide a complete eClinical platform.
Movements by the major eClinical firms – and some smaller competitors – suggest they are trying to drive this trend. At DIA a major eClinical theme was integration, with Parexel and others pitching their attempts to become the single platform biopharma firms use for all their clinical trial technology needs.
Medidata is among the eClinical firms pushing single-sign-on. The company's CEO, Tarek Sherif, told Outsourcing-Pharma.com: “Accelerating growth and competitive position are clear indications that the market is consolidating around Medidata as the leading provider of the clinical cloud.”
Staying diverse
While many firms are trying to build a dominant eClinical suite the experience of comparable niches – notably the CRO (contract research organisation) space – suggest the sector will maintain diversity.
“I don't think we'll get to the point that the top three are completely ubiquitous, so most of the newer and smaller entrants in the tech space will probably survive, though some may struggle,” Evans told this publication.
This expectation mirrors what is happening in the clinical CRO market where a handful of top players are taking share but there is still enough demand for alternatives to keep niche vendors in business.
Similar dynamics underpin both sectors with clients investing time and money into maximising what they get from one or two providers. Whether these resources are spent building a partnership with a CRO or training staff on an eClinical suite the end result is the same – that client is tied to the vendor.
Once these ties are in place a client is more likely to work with the provider in other areas. CROs and eClinical firms alike view this as a growth driver. Medidata has made cross-selling a strategic focus this year, while several of Parexel's late-phase partners are now also choosing it for Phase I business.