Saama Technologies, Inc. comes out of a IT consultancy heritage but pivoted into AI-driven clinical analytics—it moved deeper into clinical research analytics and monitoring with the acquisition of Comprehend Systems, Inc. (Comprehend) with the goal of 1) increasing combined market share 2) expanding partner ecosystems and 3) delivering on a mutual commitment to accelerate clinical development towards unmet patient needs.
Why did Saama buy Comprehend Systems?
First and foremost, Saama needs faster growth. As we covered in our profile, they play in a heavily competitive space and many of the pure play eClincial vendors, whether they be electronic data capture (EDC), clinical trial management system (CTMS), integrated response systems (IXRS), clinical data warehouse (CDW) or others include dominant vendors that don’t allow for data sharing in any easy way. Saama needs data to prove value. Second, Saama needed an application that could capture the line of business-driven source data stickiness. Third, it needed more clinical technical domain expertise.
What is their core solution?
Comprehend positions itself as a leader in Clinical Intelligent Solutions with a focus on “accelerating treatments to patients.” They report that their software suite supports efficiencies, productivity from clinical operations and data management to medical review. They worked hard on positioning their analytics to help sponsors follow risk-based protocols for CRO oversight. This author always appreciated their angle but knew it was a tough sell for breakout growth.
Why Did Comprehend Sell?
Founded in 2010, Comprehend has secured approximately $45 million on three venture capital rounds. With what we estimate to be approximately 70-85 employees and an estimated cost structure of $10 million to $15 million, we don’t believe they have crossed the private equity threshold of $15+ million in revenues and healthy profit margins. We don’t think that their product commands the growth multiples required for VC satisfaction.
We believe Comprehend’s heart is in the right place; their technology works and they have surely hired a multitude of smart professionals. From time to time, we have met some of them and they always seem pleasant and knowledgeable. So why sell? The reality is that for Comprehend to come through with its ultimate value proposition, it essentially must integrate on top of a myriad of other systems. Comprehend is ultimately a value proposition that presupposes strategic systems integration touchpoints—notoriously difficult in big pharma environments. The sales cycles are long for standard products—lengthier for a system that bolts on top of multiple other systems for a 360 degree oversight view.
The Challenge Moving Forward
Ultimately, Saama requires lots of clinical data to unleash its AI algorithms—but Comprehend will offer an integration to data with decent oversight, risk-based monitoring, and tracking application. But not access to data ownership—what is ultimately required. Now the merged entity will need further accretive growth. The ideal next acquisition would be in one of two directions of either 1) underlying mission-critical applications, such as an electronic data capture platform or 2) data warehouse vendor that already manages lots of clinical operational data that are exploitable by Saama’s AI algorithms and Comprehend’s command and control analytics.
In the meantime, with big pharma consolidation and the growing strength of emerging biopharma highly dependent on CROs, the newly combined Saama and Comprehend will have quite a bit of work ahead as the CROs are, in many cases, rolling out their own solutions for monetization.