#Healthcare

Clinical Trial Technology

Biopharma companies are actively seeking workflow efficiencies and cost savings to improve their clinical trial management processes. And as the incidence rates of the most prevalent and complex diseases continue to rise, with R&D spending to follow, biopharma will increasingly rely on outsourcing and digital-first approaches to drug development to meet global needs.

LLR has extensive experience investing in clinical trial technology and services providers, and continues to focus on the sector. Companies and intermediaries should contact Will Sadock to discuss related investment opportunities.

Biopharma was forced to participate in an industry-wide experiment in remote services delivery for much of 2020. It has accelerated adoption and shown the industry that virtual and decentralized trials are not only feasible but have the potential to significantly improve efficiencies and deliver new and valuable capabilities. The foundation has been laid: now technology and service providers need to hone their value proposition and demonstrate that they are ready to help both biopharma companies and CROs focus on success as they take the next step in this digital journey.

Rick Riegel, Senior Operating Advisor, LLR Partners

Tailwinds Prevail Post-COVID to Further Accelerate Digitization

The clinical trial technology market benefits from five significant tailwinds:

Rising pharma sales: Global pharma sales hit $871 billion in 2019 and are forecasted to grow at a CAGR of 7.7% from 2020-2026, reaching $1.4 trillion by 2026. Upcoming drug launches in oncology, CNS, and other high-demand therapeutic areas, along with increased demand for expensive orphan drugs are expected to further accelerate this growth.4

Increased utilization of drug therapies: Per enrollee use of prescription drugs has also increased from an average of 48 prescriptions per year in 2009 to 54 in 2018 in Medicare Part D, and from 7 prescriptions per year to 11 in Medicaid over the same period.2

Recovery from R&D funding lows: After eight quarters of consecutive funding declines, representing the longest funding downturn since 2007, biopharma funding increased in 2Q’23A and is expected to resume mid-single digit annual growth.3

Reliance on outsourcing: Pharma outsources nearly 60% of its clinical development spend and is increasingly reliant on vendors to be more cost-effective and deliver highly specialized technical expertise.5 Demand is particularly high among smaller pharma, which lacks the resources and capabilities to manage non-core functions like compliance or trial management and represents an increasingly large share of the overall drug pipeline.

Accelerated digitization: The FDA set multiple policies to facilitate digitization of the drug development process during COVID, including decentralization and remote monitoring. While temporary, these policies opened the door to longer-term regulatory support for digitized drug development.

The value proposition for clinical trial technology

85%
3
of trials fail to retain enough patients
up to $8M/day
1
cost of clinical trial delays
80%
2
of CROs/sponsors still use spreadsheets to manage study start-up

Key Focus Areas for LLR Investment

Despite ongoing digitization, the clinical trial technology market still lacks mature technology companies to solve several key pain points in the clinical trial process. We are most excited about opportunities to invest in and support growth organically and through M&A in companies focused on:

Participant Recruitment, Management and Retention: Tech-enabled participant targeting and recruitment solutions with corresponding participant management offerings to deliver the convenience, digital access, and choices that participants expect in their trial experience.

Study Start-Up & Logistics: Software to streamline study start-up process, including site ID/selection, site contracting/budgeting and site onboarding/activation.

Regulatory Information Management Software and services to manage regulatory disclosures, submissions and pharmacovigilance with report automation, workflow, alerting and analytics.

Risk-Based Monitoring: Analytics and workflow to prioritize and streamline the process of source data verification with a digital first approach to ensure regulatory and protocol compliance.

Training: Software solutions and learning platforms to assist in training researchers and clinicians across the clinical trial ecosystem.

Clinical Trial Data & Analytics: Data management solutions as well as clinical analytics to drive digitally native trial execution and improved site and trial performance.

Our Strategic Network

Portfolio companies gain access to LLR’s in-house Value Creation and Market Development teams, along with our extensive network of industry relationships, built over 25 years of investing in healthcare businesses.

Select Investment Experience

LLR invests in the sectors where our investment experience indicates there are attractive business models and market trends supporting strong growth potential. Here are some of our related investments in healthcare and clinical trial technology.

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Zack Sigal
William Sadock

William Sadock
Will Greenberg

Will Greenberg
Tyler Wincig

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Parker Heisey

Parker Heisey

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References

  1. “Evaluate Pharma World Preview 2020, Outlook to 2026,” Evaluate, 2020, https://www.evaluate.com/thought-leadership/pharma/evaluatepharma-world-preview-2020-outlook-2026
  2. “Prescription Drugs: Spending, Use, and Prices,” Congressional Budget Office, 2022, https://www.cbo.gov/publication/57772
  3. “Sector Insights: Impact on the Pharma Services & Outsourcing Sector in the Face of the “Perfect Storm,” Raymond James, 2023.
  4. “World Preview 2021 Outlook to 2026,” Evaluate Pharma, 2021, https://info.evaluate.com/rs/607-YGS-364/images/WorldPreviewReport_Final_2021.pdf
  5. “Redefining sourcing model terminology,” Icon, 2022, https://www.iconplc.com/insights/blog/2023/01/06/redefining-sourcing-model-terminology
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.