He says clinical trial technology is big business, and that the sector’s current evolutionary trajectory makes it fertile ground for innovation. But with an estimated 90% of all start-ups failing, he says entrepreneurs need to do everything they can to stop their idea becoming just another statistic.
Understanding the landscape, being prepared to demonstrate value, and a focus on patient-first solutions are the key to success.
OSP: How exactly would you describe the market at the moment and what challenges do sector-specific start-ups still face?
SW: The clinical trials software space is burgeoning. Commentators we looked at are predicting a compound annual growth rate of 15% from 2022, with the market reaching an estimated $2.1 billion in participant payments by 2027. It’s easy to see why.
According to research, just 12% of investigational products that enter a clinical trial will gain FDA approval. Those that do make it all the way from phase 1 studies to market tend do so over more than 10 years and at an average cost $985.3 million. With drug development being as expensive as it is risky, sponsors are continually looking for ways to leverage advances in technology to make research more efficient, while still protecting participant safety.
Solutions that have emerged in recent years range from patient support platforms and payment management systems to digital monitoring systems and AI-driven data analytics programs. And those that have been successful all have a few things in common.
OSP: Can you explain what they are?
SW: There is a certain amount of agility that is needed to be successful, and definitely a component of luck, but the most critical skill to have is problem solving. Anyone wanting to break into the clinical technology space also must be cognizant of its needs.
Entrepreneurs need to understand the landscape, be ready to prove their idea’s worth, and in what may seem to be counterintuitive, learn to focus on the user, rather than the payor.
OSP: How would you describe the landscape?
Clinical research is unique in its complexity. Start-ups need to fully understand the problem they are trying to solve, learn the language and terminology used on the ground, and get to grips with a huge swathe of rules and regulations. But they will also need to map their strategy to what is realistically achievable in such as space.
An estimated 82% of start-ups fail due to financial pressures, with raising too much money being as commonly cited as running out of funds.
This statistic shows clinical research is so highly regulated and specialized that I do not think it will accommodate a hyper-growth business. It means that raising huge amounts of money at the start is often a mistake and can have consequences further down the road.
Of course, there are exceptions, but is very hard to get the exponential, top line growth you might get in a more generalized, cross-vertical tech space. It means that 10 years from start to exit is a realistic rule of thumb.
OSP: What about the proof, can you explain why evidence is so important?
The clinical research sector is based on evidence, meaning a slick sales pitch will never be enough to convince customers to give an idea a try.
When we launched Greenphire’s clinical trials payment management system in 2008, for example, we had to convince the industry that what we had created was necessary. We knew this was an opportunity to operate in a more efficient way.
The team worked with trial sites to audit exactly how patient payments were being made. Through this project, they were able to document the manual, bureaucratic processes that were not only costly, but also had a negative impact on participants’ experience.
Something I would say to anybody wanting to enter this space, it is expected to have to demonstrate your value.
OSP: In your opinion where do companies go wrong?
One mistake budding clinical technology companies often make is focusing on the wrong stakeholder.
Many clinical tech businesses tend to be very client focused, and I think that is a mistake. The sponsor may be the one paying for the product, but the sites and the participants are the ones who will be using it.
If they do not like it, they will not use it, and then it will have no value to the sponsor. In my companies, we have seen the sponsor as tertiary importance. It is imperative to avoid over engineered features and instead focus on user experience.
OSP: What would you say the payoff is?
Clinical trial technology start-ups may face challenges, but they also stand to reap unique rewards that extend beyond the potential for profit.
Designing and successfully deploying innovative solutions to the challenges facing the research sector is an opportunity to help sponsors deliver medicines to the people who need them as quickly as possible – and make a real, tangible difference to people’s lives.
