Trial In Absentia: Covid-19 Gives Rise To Decentralized Drug Trials
Remote tracking of drug trial participants is gaining acceptance
By Claire Rychlewski
At the height of the coronavirus pandemic last year, telehealth was the word on everyone’s lips. As Covid-19 kept patients in their homes, regulators and healthcare stakeholders rapidly accelerated expansion and access to telemedicine.
But the doctor’s office was not the only place that was digitized by the pandemic. As traditional site-based clinical trials struggled to recruit patients during the national lockdowns last year, the industry quickly moved to embrace digital services like decentralized trials.
“Traditional site-based trials were struggling to recruit,” said Tom Lemberg, CEO of decentralized clinical trial provider Curebase. “No one was going into the physical site at the height of the pandemic, forcing major drug companies and regulators to embrace decentralized methods. The industry moved quickly and now every major clinical trial sponsor has decentralized trials.”
San Francisco-based Curebase, which announced a $15 million Series A last month, offers a software platform allowing patients enrolled in clinical trials to participate in decentralized trials at home and with their preferred physicians. Used by drug companies and clinical research organizations (CROs), the platform guides patients through each step of the clinical trial, as well as offers telemedicine capabilities, remote scheduling and data collection. Curebase’s revenue saw a huge boost during the pandemic, growing 300% over the last year, Lemberg said.
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The clinical trial industry is a nearly $50 billion globally. In the last year, the space has seen a handful of big-ticket deals, including Thermo Fisher Scientific’s TMO planned $17.4 billion acquisition of PPD PPD , announced in April. That deal followed Irish CRO ICON’s February acquisition of PRA Health Sciences, in a cash and stock transaction valued at approximately $12 billion. Additionally, Pamplona Capital-backed CRO Parexel is reportedly exploring a sale, and could seek a potential $9 billion valuation.
As the sector digests these bellwether transactions, appetite for outsourced pharmaceutical services and software providers has been high. Mergermarket has reported on the sale processes of eMolecules, Aptitude Health and Conisus, which help provide data analytics and business intelligence for pharmaceutical companies moving drugs through trials. The sector has drawn increased interest from financial sponsors looking for safe bets to place overhanging capital, said one investment banker active in the outsourced pharmaceutical services and CRO sector.
“A lot of businesses that private equity would’ve called recession-proof businesses – any practice management, physicians, dental, you name it – turns out they’re not pandemic resistant,” the banker said. Many of the in-person clinical trials that had been halted due to the pandemic, resumed online, the banker said.
Average sale multiples in the space are heavily asset dependent, the banker added, though he noted that in outsourced pharma services, “multiples are currently higher than pre-Covid.” The dynamic is “going to stay for longer than you think,” the banker predicted.
Along with sponsors, large strategics in the U.S. and abroad, including traditional CROs, are also taking interest in building out their outsourced pharma services portfolio, the banker said.
“They’re broadening [their reach], whether that means getting into remote visits or virtual trials,” the banker said.
Claire Rychlewski is a Chicago-based senior reporter and Midwest deputy editor for Mergermarket, covering healthcare and technology. She can be reached at [email protected].