By Clinical Research News Staff

June 12, 2019 | Dassault Systèmes announced this morning that it is acquiring Medidata Solutions at a price of $92.25 per share, representing an enterprise value of $5.8 billion. The transaction was unanimously approved by the Boards of Directors of both companies. Completion of the acquisition is expected during the last quarter of 2019 and is subject to certain regulatory approvals, approval by the majority of Medidata’s shareholders and other customary closing conditions.

In an investor call this morning, Bernard Charlès, Vice Chairman and CEO, Dassault Systèmes; Tarek Sherif, Co-founder, Chairman and CEO, Medidata; Glen de Vries, Co-founder and President, Medidata; and Pascal Daloz, Executive Vice President, Brands and Corporate Development, Dassault Systèmes presented what they called a purpose-driven, strategic move.

The path forward wasn't perfectly outlined. Medidata will operate as a wholly-owned subsidiary of Dassault Systèmes Sherif explained: "Glen and I have always been driven by the mission that we set 20 years ago. We are 100% committed to making this successful; we are definitely staying on. We will be running Medidata as a wholly-owned subsidiary, reporting in to the senior management at Dassault Systèmes. We have no plans to go anywhere."

But representatives from both companies made clear that Medidata's platform will be integrated into Dassault's 3DEXPERIENCE platform, and Daloz outlined the revenue advantages of "combining BIOVIA and Medidata." (The BIOVIA brand was born out of Dassault Systèmes' 2014 acquisition of Accelrys.)

Daloz hinted at more changes: Medidata has been an Amazon Web Services Life Science Competency Partner, and the company’s SaaS offerings have been hosted almost exclusively on the AWS cloud. "I think there is a lot of interest to use our own cloud… there is a lot of value to having a common platform from the synergy and development side," he said.

White Space in the Market

Medidata, which just launched Acorn AI, is in a position of strength within its industry, prompting questions on the call about why the time was right for an acquisition. The Medidata executives were quick to outline the "white space" in the market they hope to impact.

de Vries pointed out that Medidata hasn't yet tackled supply chain or chain of custody issues. "There are complexities beyond just the clinical trial processes that we’ve been addressing to date," he said. "As we see more of these cell therapies, and other personalized therapies, not just life sciences, but medicine is going to be struggling with processes that they just don't know how to scale. Things like getting a sample from a patient through a manufacturing process—a complex biologics-style manufacturing process—which our colleagues-to-be at Dassault Systèmes are very good at managing."

He continued: "Connecting some of the loops—making closed-loop feedback systems—in the world of clinical and parts of commercial that we've done at Medidata, well now, synergistically with Dassault Systèmes, we can start to think about those feedback loops across discovery, research, development, commercialization, industrialization, delivery of those therapies in the marketplace in ways that we really couldn’t even conceive of before we started talking about this combination."

Representatives from both companies anticipated a coming shift within the life sciences and believe the acquisition will allow them to create an integrated business experience platform for an end-to-end approach to research and discovery, development, clinical testing, manufacturing and commercialization of new therapies and health technologies.

"There was so much potential in an industry that, I think, is going through a major disruption," Sherif said. "What was so attractive to us is that Dassault Systèmes brings a lot of experience in other industries that have gone through the same kind of transition that our industry is going to go through. They bring maturity and scale, and they bring capabilities that really completed the full circle that we saw was necessary to make precision medicine a reality in our lifetime."

From the Dassault side, Charlès added: "There is a mature progression in formulating not the sum of what we are, but where we can go. There is one unique characteristic in what Dassault Systèmes has done across all industries: we have always been game-changers. We have never done me-too. We always change the game; it's harder, but it's more fun. I believe it's the time to do it in life sciences."

Much of that shift, according to Charlès, is a shift from documents-based workflows to modeling and simulation.

"Today when we do modeling and simulation for an airplane, we know this flight is going to go from A to B," explained Charlès. "In life sciences, it's not the case. In life sciences, the clinical trials are so critical because the outcome of the clinical trial is not only the [justification] to go to market, it's the extreme—at the highest level possible—characterization of which person could benefit, under which condition, with which devices. Data science has to be correlated to modeling and simulation."

"At the beginning of the digitization of an industry, every industry is starting to manage documents. But at some point in time, the documents disappear and modeling and simulation become the master model," he said. "We've seen that all other industries. I believe it will happen in the life sciences."