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Medidata Solutions Reports Second Quarter 2012 Results

Stocks in this article: MDSO

Medidata Solutions (NASDAQ: MDSO), a leading global provider of cloud-based drug development solutions that optimize the efficiency of clinical development, today announced its financial results for the second quarter of 2012, and provided detailed financial guidance for the third quarter and full year 2012.

The company also announced a significant contract with a division of a top ten pharmaceutical company, an existing customer, which selected Medidata’s clinical cloud for its global clinical technology needs. The largest contract in Medidata’s history, the contract is worth in excess of $100 million over five years inclusive of a multi-year adoption ramp and assuming certain options are exercised. This milestone transaction provides Medidata’s customer with access to its entire platform, enabling operational innovation in clinical development across all business processes and roles.

“Medidata’s stellar second quarter results clearly demonstrate the value of our cloud-based platform, evidenced by significant customer growth and a landmark nine-figure contract. Our execution is reshaping the competitive landscape and in the process building sustainable competitive advantage for Medidata,” said Tarek Sherif, Medidata's chief executive officer. “We are in the early stages of an adoption cycle for cloud-based solutions and will continue to invest in our mission to become the technology backbone of the clinical development process. Our business model, platform interoperability and customer responsiveness underpin our business goals of enabling life science companies to bring their drugs to market with shorter timelines, lower cost and less risk, while supporting our ability to innovate and build value. We are transforming clinical development operations and ultimately creating competitive advantage for our customers.”

Second Quarter Highlights

  • Record revenues for the quarter of $53.5 million, which exceeded the high end of guidance, reflect record professional services billings, strong cross sales and increasing customer acceptance of Medidata’s clinical cloud platform. Revenues for the quarter increased 6% sequentially.
  • Application services revenue increased 8% sequentially, reflecting market share gains and growth in adoption of Rave and non-Rave products across our installed base of customers. Remaining year backlog was $80 million, an increase of 28% versus the comparable period in 2011.
  • For the quarter, non-Rave revenue increased 100% year over year and 34% sequentially. For the first half of 2012 non-Rave revenues grew 87% year over year.
  • A record 33 new customers were added in the quarter, bringing the total number of customers to 316, up 36% year over year. Medidata added over 100 new customers in the past 12 months, while continuing its high customer retention and revenue retention rates of approximately 99% for the quarter.
  • Both new and existing customers increasingly looked to use applications across Medidata’s platform, with a record 30% of all new customers contracting for multiple solutions.
  • A study conducted by the Center for the Study of Drug Development at Tufts University School of Medicine and sponsored by Medidata found that up to 24% of medical procedures conducted in clinical trials may be unnecessary at a cost of $3–5 billion annually. The research, which will appear in an upcoming issue of  Nature Medicine, a premier journal for biomedical research, relied on Medidata’s study and protocol design solution to collect and analyze data from 15 participating pharmaceutical companies. Medidata’s solution, which provides visibility into cost and other metrics associated with a study’s design, is used by customers like GlaxoSmithKline to develop efficient study protocols, reduce trial complexity and streamline clinical trials.
  • Medidata had multiple product releases including: broadened capabilities for capturing safety events; a new clinical analytics tool for site quality management; new built-in integrations between Medidata CTMS™ and Medidata Rave ®; a new tool to assist drug companies in handling physician-initiated studies; and expanded capabilities in randomization and trial supply management.
  • Raises full year revenue guidance and provides third quarter guidance.

Mr. Sherif continued, “Sales were strong across the board this quarter, providing solid backlog as we enter the second half of the year. This, combined with our large pipeline of opportunities, is driving our accelerating momentum despite current macroeconomic headwinds, positioning us well for the remainder of 2012.”

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