Decentralized Trials, Science 37
Originally published 11-May-2021 on LinkedIn.
Science 37 provides a platform on which to conduct decentralized trials (DCT) end to end. It can be used by biopharmas directly or managed by CROs alongside traditional site operations.
"End to end" is important because many companies specialize in parts of DCT (eCRF, eCOA, eConsent, home health, etc.), but few offer all parts in one platform. A trial can be 100% DCT, or X% DCT and X% traditional sites, or 100% traditional sites but using remote technologies.
Medable and Thread are among its competitors. I'd argue certain large CROs building out their own DCT are / will be competitors as well (e.g., IQVIA), as they have the resources to build their own OS to keep those DCT dollars in-house.
Clinical trials won't be 100% DCT tomorrow or 5 years from now, but COVID accelerated adoption. Want proof? S37's Q1 RFP funnel increased 4x YoY and net bookings 7x'd. FY2021 revenue is expected to grow 120% YoY, with >80% already covered through backlog.
S37 operates at steep losses (2020 operating costs were >2x revenue) and targets FY2024 for profitability as revenue accelerates from $24m in 2020 to $261m in 2024. On the investor webinar, S37's CFO described their current loss position as due to a combination of hyper growth investment but also historical underpricing that will take time to work out of their backlog (been there, it’s tough).
All figures above are from S37's investor deck.
Science 37 intends to go public via a SPAC transaction with blank check company LifeSci Acquisition II Corp (ticker LSAQ). LSAQ has already lined up “PIPE” funding for the incremental 20m shares associated with the merger, at $10/share. The parties have until 6-Nov-2021 to complete the closing process. Once/if closed, ~$250m cash goes onto S37’s balance sheet and they’ll trade under ticker SNCE.
Tomorrow I’ll dive into the SPAC+PIPE details. SPACs are highly complex and very controversial right now, and I’m fascinated to see one come to the services side of the industry. In the meantime, I recommend the investor webinar to anyone looking for a more extensive overview of Science 37 and this transaction.
Disclosure- I have no financial interest in any company mentioned in this post. This post reflects my thoughts and opinions on publicly available information, and is definitely not investment advice!