Medidata’s Cloud-Based Pharmaceutical Approach May Spur High Gains
October 9, 2012
Grazed from Seeking Alpha. Author: Amit Bilgi.
Medidata Solutions (MDSO) is not a company you may have heard of, and with good reason. The computer technology company had its initial public offering in 2009 and maintains a market capitalization of just over a billion dollars. This New York-based firm specializes in providing drug companies software for the clinical development process. Using a cloud-computing approach, the business provides a "software as a service" (colloquially known as SaaS) to help increase the efficiency of various clients’ clinical trials. As there are a plethora of restrictions and protocols a company must adhere to when going through the trial process, it’s vital to ensure all of these regulations are met and done in a proper and well-organized manner to ensure overall legitimacy and increase the probability of approval.
This market can be bifurcated into electronic data capture and clinical data management. The former involves a simplified method of data entry to help expedite the trials themselves, along with various tools to assist with analysis and reporting. CDMS is oftentimes used in conjunction with EDC software to manage much of the data from these various trials. As Medidata is currently attempting to maximize their market share of this business, they have represented themselves as a powerhouse taking a commanding lead with much room for growth…
The company’s total revenue is up 15% over the past four quarters with their net income increasing over 22% from 2010 to 2011. However, the true benefit with the company is through their debt management. While still maintaining an augmented total asset value of $189 million in 2011–20% increase from 2010, the company has decreased their debt by almost 93%, thus establishing a debt-to-equity ratio of 0.2%. Given that Medidata is a computer management company, a minimal debt obligation ensures a multitude of benefits. First, there can be a stronger shift of focus into various research and development strategies to discourage competition. As EDC/CDMS is relatively small, a powerful player like Medidata serves as a strong deterrent against start-up companies trying to enter the market. Furthermore, this is fairly indicative of an excellent management and in conjunction with the continuous decrease of debt levels year-over-year, the likelihood that this strategy continues is high…
Read more from the source @ http://seekingalpha.com/article/913911-medidata-s-cloud-based-pharmaceutical-approach-may-spur-high-gains