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Clinical Research Sites Invest in Next Wave of Cloud-based Solutions

The number of clinical trials has skyrocketed over the past decade. The associated costs of drug development (and risk), continue to increase. This trend continues with greater momentum with the advent of complex opportunities associated with precision medicine and orphan indications. Simultaneously, the industry sponsor landscape morphs as tier 1 global biopharmaceutical companies consolidate and a growing number of "virtual sponsors" raise capital to progress compounds from preclinical to at least Phase I if not all the way to Phase III prior to entering into merger and acquisition activity. TrialSite News has written about the rapidly changing research site landscape as a number of forces are unleashed from private equity-driven role ups to organic research site combinations to heretofore not possible models of engagement where specialized data-driven firms partner with physician networks to enable clinical research as a care option. In this world the only constant is change; flexible, cloud-based, adaptable digital platforms to support scale, efficiency and compliance are of paramount importance.

Emergence of New Site-Centric Solutions

Traditionally, many research sites lagged behind industry sponsors' technology sophistication. How times are changing. Thanks to the confluence of cloud computing, advancing software development platforms and big data, even moderately-sized clinical research sites can now invest in sophisticated technology solutions at relatively economical rates. A whole new batch of technologies and associated "eClincial" or "Site-Focused Technology" vendors are now on the market raising the bar for clinical trial technology applications.

One new entrant is Clinical Research IO (CRIO). Founded in 2016 by Harvard JD and Boston Consulting Group (BCG) alumni Raymond Nomizu, CRIO has emerged as a "site centric" integrated clinical trials management platform. Mr. Nomizu is talented. Graduating from Harvard Law School, he passed a more conventional corporate law firm career for entry into the high-level business consulting world with Boston Consulting Group--where he was exposed to a myriad of business improvement challenges and solutions. An unorthodox professional and high-end consultant, Nomizu stepped into role as president of an actual research site in what would be a professional pivot point.

Enter Clinical Research Sites

In 2013 Nomizu seized an opportunity to run a small New England-based clinical research site Beacon Clinical Research. For three years he experienced the real challenges (and pains) that small sites face: from recruiting coordinators and principal investigators to working with patient populations to continuously working to improve operational, clinical trial and the vitally important regulatory compliance capabilities. A complex and difficult role, Nomizu experienced the pain first hand of the inefficiencies from what in reality is still a surprisingly paper-based, manual process-driven world of the research site. What tools were available for a small site, Nomizu found them to be difficult to use, clunky and over-priced. By 2016 Nomizu's consultative smarts, Harvard legal-education inspired confidence and entrepreneurial instincts pointed in one direction: the formation of CRIO. He paired up with partner Phuc Truong, a not only database and digital workflow expert, but also serial entrepreneur, and CRIO was born.

Solutions

Nomizu and Truong sought out to do something bigger than the usual eClincial direction of building out one point solution to start. Rather they combined Nomizu's experience running a site (not to mention deep compliance exposure and business process expertise advising many clients from the BCG day, and Truong's business process automation expertise and entrepreneurial acumen to envision and roadmap a comprehensive, end-to-end research site solution to incorporate the following:

  • eRegulatory
  • Recruiting
  • Finance
  • Scheduling
  • Document Routing
  • Patient Stipends

A bold move. Although there are software vendors that over time have built out these capabilities the CRIO duo sought to build out a grand site-wide solution--it was an ambitious program. However, it would appear they the CRIO duo have produces results. In just a couple years they have developed the following solutions:

  • eSource
  • CTMS
  • Stipends
  • Text/VOIP
  • Lab Routing

The heart of the CRIO platform is a eSource system that essentially replaces paper forms with an interactive application that offers researchers the ability to create eSource templates and use a mobile tablet to capture source data. If used with the proper standard operating procedures and aligned processes, the system can save time, improve accuracy and reduce protocol deviations through autofill and data validation techniques. The CRIO development team architected this underlying business process management platform so that patient scheduling, patient recruiting, and financial management could be plugged-in for a holistic, site enterprise solution. Undoubtedly in mind were open APIs with web services calls for the eventual request to integrate with other mission critical systems.

Market Traction

CRIO has carefully marketed to research sites that aren't afraid to make the investment to grow and produce higher quality results--leading to promotion of improved quality, patient safety and higher productivity. In keeping with Nomizu's consulting pedigree the intense focus on the correlation with software investment, implementation and measurable quantifiable results are first in mind. In just over two years CRIO exhibits a healthy growth rate based on their states number of participating sites. They have gone from zero in early 2016 to well over 200 research sites, 600+ principal investigators--very impressive results. Their early adopter research sites have tended to be larger, more professionally run site operations; and they observe that they represent oftentimes more than 10% of the sites on a given non-oncology Phase III trial.

Research sites operate in a serious regulatory compliance environment. Sponsor audits and agency inspections are commonplace. CRIO has taken this responsibility seriously as they must not only ensure their platform performs well during vendor audits but that their approach and methodologies add value for research site clients. Recently they retained Kinetiq for a third party 21 CFR Part 11 attestation. Essentially an audit stamp of approval, CRIO's policies and procedures enable their clients to implement the platform to support 21 CFR Part 11 compliance. Moreover, they have designed their "CRIO Academy" which supports and encourages ongoing training and learning with certification options. A fully staff help desk is available with real-time chat, phone support and advanced service options. They venture has included client SLAs to demonstrate quality at each step of the client lifecycle.

CRIO has ambitious plans. In addition to interfacing with sponsor EDCs, Portals, IXRs and other systems, they will target the closing the digital loop of clinical research between research sites (or groups of sites) and sponsors. They have already developed an integration with EDC market leader Medidata RAVE; they are in discussions with other potential eClinical partners to streamline and digitize what is still often a manual, paper-based process involving CRA-driven EDC entry and secure data verification (SDV).

Size

We estimate CRIO to be ready for an A round investment. Based on our preliminary due diligence it would appear they have designed a compelling research site platform that could also be leveraged by industry sponsors--starting with small to mid-sized biotech ventures. We estimate that they employ between 15 to 25 employees and revenues are between $1.5 and $3 million. They are probably at about break-even; perhaps a small profit we suspect. Their target market includes commercial research sites, research and clinical trials networks, academic medical centers and potentially biopharmaceutical sponsors (especially the mid-market which may be more easily penetrated than tier 1). Most importantly, their founding team exhibit a level of maturity, business acumen and ability to role the sleeves up and work with investors.

Financing

CRIO has raised $3.3 million from two seed rounds, led by VC firms NXT Ventures and Rally Ventures plus a number of angel investors. Co-founder Nomizu notes "we currently meet the investment parameters for a Series A investment; however, we want to grow smartly, so we're going to be cautious about taking on additional capital. The industry changes slowly, and while we believe we will hit an inflection point of rapid growth, we want to make sure we hit our milestones and prove to ourselves certain investment theses before we go all-in on aggressive growth. Based on TrialSite News experience in eClinical technology market, Mr. Nomizu is wise to be cautious. The life science industry is generally conservative and in the highly regulated world of drug development a culture of caution exists. Sales cycles are lengthy, and buyers tend to take their time to consider the pros and cons of different vendors. To some extent clinical trials technology (whether sponsor side or site side) is a "good old boys network" but that is changing rapidly as the face of clinical research also changes. The market is now ready for an upgrade and hence why Mr. Nomizu should be open to allowing additional investors in. With the right financial partners we suspect they can make a solid impact on the market.

Competition

The research site market itself is going through an upheaval. Different models are now introduced while private equity seeks to capture annuities possible from endless clinical research. With technology advances a batch of new ventures target this space. CRIO faces a range of competition from well-established players to nimble hungry upstarts. CRIO falls in this latter category and appears to have a strong complimentary founding team with Nomizu and Truong. Their focus on clean, modern software as well as process improvements can be of great help; to effectively sell to research sites (and sponsors) firms must be incredibly adept at simultaneously discovering and diagnosing pain points while working with the prospective customer to design breakthrough solutions. Research sites (and sponsors) now seek to consume clinical trials apps that fit within their daily practice and afford them the opportunity to achieve greater productivity while also ensuring compliance with fundamental principles such as informed consent.

On the sponsor-side vendors such as Veeva have transformed the industry accumulating large amounts of money and high rates of growth along the way--not to mention massive valuations. Veeva now seeks to target research sites for their Vault, EDC and CTMS products. Some site-focusing ventures are taking a cautious approach while others are raising lots of money. Atlanta-based Florence Healthcare has sought to grow organically, seeking to convert sites from paper to digital, while Cleveland-based Complion, founded in 2013, has raised over $12 million to build out and market its site-centric compliance platform--including a digital site master file. Clinical Ink, an eSource venture, has raised a whopping $35 million. Other competitors are emerging not to mention the traditional vendors that targeted major academic research centers such as Forte Research and their OnCore site suite of products from CTMS to EDC and electronic site master file.

Conclusion

CRIO enters a critical phase in its trajectory: will it continue to cautiously grow, or will it accept larger dilution to go for a home run? The opportunity is there. The last batch of clinical trial technology products are frankly past their shelf life. Existing vendors are upgrading however, and they will seek to block out the new competitors such as CRIO. Real growth requires real capital and lots of talent including clinical trial subject matters experts--who don't come cheap. What persona will Mr. Nomizu take on for this next chapter in the growth of CRIO: Lawyer, Consultant or Risk taker?