Clinical Trial Tech – What Investors Want And Studies Need

By Deborah Borfitz 

February 20, 2024 | The perspectives of clinical trial technology investors and trends for future investment were the topics of a pair of fast-paced panel discussions at last week’s Summit for Clinical Ops Professionals (SCOPE) in Orlando. What investors want appears to be well aligned with what sponsors and sites say they need—solutions running the gamut from better matching patients to trials and improving access to streamlining the way studies get designed and conducted. 

First up was a dialogue about causes for celebration, lessons learned, and changing customer needs among investors from four venture capital funds. Rana Lonnen, managing director of dRx Capital at Novartis, served as moderator. 

The surge of investment in decentralized clinical trials (DCTs) between the 2018/2019 to 2022 period is noteworthy, according to Sunny Kumar, M.D., partner with GSR Ventures Kumar. Until early 2018, DCT was “a concept with less than 1% adoption” among sponsor companies. 

Roughly half of all sponsors today include decentralized components in many of their trials, he adds, without ever asking about the optimal level and pace of adoption. “COVID supported DCT technology adoption but is not necessarily what patients need in the long run.” DCT players also did not all have the right go-to-market strategy and sometimes competed more than collaborated with contract research organizations (CROs). 

The “next wave” of need for DCTs will be for meeting access and diversity needs, says Carrie Williams, vice president and partner with McKesson Ventures. Too much focus has been directed at the technology itself rather than patients in their home or at study sites enabling better, less burdensome data collection. More companies are now building hybrid trials that flexibly “meet in the middle.” 

Many attempts have been made to solve the ever-worsening patient recruitment problem and no solution has yet worked, points out Andrew Hedin, partner with Bessemer Venture Partners. “Recruiting patients for trials is hard.” 

Part of the problem is that business must be won trial by trial, says Williams. “It’s hard to fill the pipeline and keep growth going” as budgets quickly get depleted. Getting to an inflection point with recruitment technology will take a go-to-market strategy that doesn’t require large teams.  

Many investors are looking for annual recurring revenue, which is uncommon in the recruitment space, adds Hedin. “All revenues used to look the same.” 

Beyond the Vision

Considering the scaling difficulty, stay close to the customer and focus on bringing together best-in-breed companies, offers Brian Matesic, M.D., principal with Norwest Venture Partners. The patchwork of vendors sponsors must work with trial by trial is creating a lot of friction. 

High interest rates make consolidation and mergers more challenging for investors, says Matesic. Norwest looks for best-in-class companies that can assist with digital biomarkers and enhance real-world evidence measurement, an expensive area for study sponsors. 

A solution can be neither too big nor too small to be of value to large pharma companies, says Kumar. In terms of patient recruitment, “many startups solve one part of it, like patient identification, and stop there.” But what sponsors need, as startups have started to understand, are end-to-end solutions that get patients into trials and keep them engaged, compliant, and enrolled. 

Investor companies won’t be sold on a startup’s vision alone, says Williams. It’s important to understand the pipeline of sponsors as well as minimize study complexity, de-risk clinical development, focus on operational excellence, and otherwise make project management more seamless.   

“We want to believe in your vision,” says Hedin. To that end, clinical trial tech should solve real problems, offer a tangible return on investment, and be many times better than “safe” existing options. “Be sure you have a sustainable business model and can scale, and margins are attractive over the long run,” he advises. 

When it comes to contracting, “nail it and scale it,” adds Matesic. To succeed, startups need to differentiate themselves from their competitors and then execute well. 

Patient Focus

So, what excites venture capitalists these days? 

“Companies that understand the patient experience,” says Williams, starting with protocol design and supporting patients through their journey. “Integrate as needed; don’t be afraid to partner.” 

In a word, “patient-centricity,” says Hedin. This would include finding and rewarding patients for participating in trials and developing synthetic control arms to eliminate the need for placebos while lowering costs for sponsors. 

“Generative AI [artificial intelligence] takes up all the oxygen in the room,” but so far only for easily recognized and deployed uses such as investigator selection and site operations, says Kumar. As with any disruptive technology in pharma tech, “what will be most exciting and transformative will happen two to three years from now.” 

Matesic says he has his eye on digital markers and real-time monitoring of patients, where novel companies are collaborating to solve problems. Although adding a new device to a trial could add some risk, “the tried and true is not always best.” 

Tech startups looking to make inroads with sponsors “need to hold them accountable so no time is wasted,” Lonnen says. Pick a champion in the company, know when budget meetings are held and who those decision-makers are, and “talk KPIs [key performance indicators] and change management and trainings.” 

The Bottlenecks

In a subsequent panel discussion moderated by Ross Jaffe, cofounder and chairman of Faro Health, the conversation flipped to the lens of sponsors and sites involved in the execution of clinical trials. 

The challenges today are no different than ever, only bigger, says David Stevenson, chief operating officer and managing director at Merck. With so many molecules under development in an already constrained pipeline, clinical trials must be reimagined to improve access, endpoint selection, and completion speed.  

Regeneron Pharmaceuticals is looking for ways to automate operational aspects of running trials to make the experience more seamless for sites and investigators, says Bari Kowal, senior vice president and head of global clinical operations. Education at that level is one of the biggest bottlenecks for the company.  

Studies repeatedly miss their enrollment and timeline goals despite all the technologies that have been put to the problem, which is how Walgreens came to join the effort, says Joe O’Rourke, head of commercial development. The retail giant has been approached many times about novel ways to bring patients into trials, given its relationship with 138 million individuals—51% of them living in socially vulnerable areas.  

Clinical trials are also important to academic medical centers (AMCs)—despite often being money-losing propositions—because they’re the last stop for patients who have exhausted all other avenues for treatment, says Manu Nair, chair and head of corporate development at the Mayo Clinic. The challenge for AMCs is to overcome internal bureaucratic processes so they are a “magnet of attraction” for pharma companies conducting trials. While 80% of trials used to be done at AMCs, that figure has now dwindled to 40%. 

Aspirin vs. Vitamin

Heavy investment in pharma IT and clinical trial tech in 2021 was the first time the industry “came close to being disruptive,” says Shane Senior, chief executive officer and cofounder of Crosstree Capital Partners. The result was innovations that would otherwise have taken five years to come to fruition. 

What’s in place today is “an ecosystem of point solutions” that sponsors are expected to stitch together, says Senior. Immediate opportunities exist in applying machine learning to workflow and automation to better clean and connect data amidst a shortage of biostatisticians. “The cool stuff is five years out still.”  

The technology that will be truly transformational will cut costs and accommodate data flow from electronic health record systems to electronic data capture systems, says Kowal. It starts with better protocol designs where only needed data gets collected and in a streamlined fashion.  

Technology functions as an aspirin when serving as a point solution but more as a vitamin once there’s enough of them, says Nair. And a vitamin is what’s needed to grow the number of trials being done at AMCs, notably for time-consuming front-end processes like contracting.   

At the Mayo Clinic, he continues, less than 20 people in the legal department are trying to manage 6,500 contracts a year. To address the inevitable bottlenecks, Mayo has found a partner to help it build a contract network to reduce a three- to four-month contracting process to 10 days. The effort includes standardization and the development of contracting templates. Mayo is also looking at automated solutions for determining when enough of the right patient population is available for study recruitment.  

“There’s not a big enough bottle of aspirin” relative to the number of pain points, says Steverson, continuing with the analogy. Customers want “tech-enabled solutions,” not just the tech. 

“We can’t contract with the hundreds or thousands of (non-integrated) startups,” he says. “It’s a systemic problem, a broken supply chain... we need to get the flywheel going. We need a business model [providing startups with] creative ways to partner.” 

“Patient access is your vitamin,” says Senior, and a problem being solved by consolidation rather than technology. Clinical research is a “brute force industry,” he adds, where finding patients simplifies everything else. 

Place For AI

When it comes to AI, the question is where best to apply it. For Walgreens, the use case is an engine that can quickly identify patients that are both interested and eligible in a study for outreach in their preferred language, says O’Rourke. The foundational work is being done now, he adds, including education about clinical research and the opportunity to participate.  

The focus of AI should be on optimizing protocols and the use of digital biomarkers, says Kowal. It can also help identify the right patients for studies in terms of interest, disease state, and meeting diversity goals.  

The Mayo Clinic has built a platform for amassing deidentified clinical data that can be mined in a useful way, such as patient stratification for clinical trials, says Nair. The data pool is being expanded with other AMCs “similarly situated in the U.S. and abroad.” 

Merck has been investing in AI companies for over a decade now, reports Stevenson. His message to startups is to be thoughtful about how they deploy it. “The opportunities in drug development are non-sexy.” 

Whether pharma wants AI to be a companion diagnostic remains to be seen, says Senior. “ActiGraph is doing that, but no one is really serious about it yet.”  

Most doctors are biologists, so data alone is insufficient, says Nair. They also want “validation of the biology,” which is a long process. 

Probabilistic AI models are running up against regulatory issues, says Stevenson. “Hallucinations are not acceptable.” 

Overall, the potential of AI has been overestimated in the near term but underestimated over the long haul, says Jaffe.  

As to where clinical trial technology is most needed, Nair’s list includes an ecosystem of solutions for increasing access and the diversity of the patient population, as well as trial initiation speed.  

Kowal says interoperability is the big need at Regeneron, since streamlining operations is the goal and utilizing all the available solutions is impossible. Technology must also be cost-efficient given the already-exorbitant cost of running trials.  

Stevenson agrees, suggesting vendors partner with one another or pharma companies if they have their own solution. “Solve a real problem and ... [take a] differentiation approach.”  

Technology deployment will be shifting from CROs to sites, says Senior. Therefore, his parting advice to tech companies is to “think patient and site enablement.”                    

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