Virtify is making great strides lately, based on the strength its Web-based software that helps life sciences companies manage the data they need to comply with health regulators around the world, like the FDA. Satish Tadikonda, the company’s co-founder and CEO, told Xconomy this week about his plans to accelerate the growth of the company with new financing and a major corporate partnership.
Tadikonda, a veteran health IT entrepreneur, has managed to build his growing company largely under the radar of the business press for the past six years. Then this month the Cambridge, MA-based firm gained media exposure through its $15 million equity financing led by Tudor Ventures, the private equity arm of the hedge fund Tudor Investment. Virtify is profitable, so it doesn’t need to raise capital to keep the doors open or to avoid cost-cutting. Instead, Virtify chose to bring in the outside capital for the first time in its history to speed up its expansion plan, Tadikonda says.
The company plans to boost global sales of its Web-based software, which helps life sciences companies to ensure that their product documents for drugs comply with regulatory standards. The company is working with Norwalk, CT-based healthcare information giant IMS Health (NYSE:RX) to market Virtify’s technology in Europe. It’s a coup for Virtify because IMS provides detailed information—such as pharmaceutical market share and doctors’ prescribing trends—to most of the major drug and biotech firms in Europe and other significant markets.
Virtify has built up some sizable capabilities of its own, with 175 employees spread among offices in Bulgaria, India, the Philippines, and here in Cambridge. It is thriving partly because life sciences companies are required to keep massive amounts of documentation on the safety and effectiveness of their products to comply with regulatory standards. Also, there are strict IT protocols for how certain materials can be submitted to agencies such as the FDA and the European Medicines Agency. Virtify’s software centralizes the regulated content in one Web-based environment, as opposed to keeping paper records spread across different offices or departments within a company. The goal is to reduce the time and money needed to stay in compliance and bring products to market. It’s one way life sciences companies hope they can save a few bucks on the long, expensive development cycles they must endure to bring a product from its basic discovery to commercialization.
“[The IMS deal] is really going to enable us to take advantage of where we are in the marketplace, looking ahead to growth and bringing our solutions to market with greater scalability in terms of implementation and add-on services,” says Dwight Galler, senior director of marketing at Virtify. “We’re very excited about it.” He didn’t provide financial terms of the IMS deal, although he said the company plans to make a formal announcement about the partnership within the next month.
There are many competitors that offer applications for managing regulatory documents, including companies such as Palo Alto, CA-based MetricStream and Salt Lake City-based MasterControl. But Virtify’s technology is differentiated in several ways, Tadikonda says. For one, the company’s software is designed to enable its customers to comply with the standards of regulatory agencies around the world, not just the FDA. It also covers all aspects of the regulatory process including content for clinical trials, product approval applications, and manufacturing. Virtify can also deliver its software to customers as a service via a Web connection, in a software-as-a-service model, or provide the software for companies to host on their own secured servers if that’s what they prefer. The Web-based approach enables Virfity’s customers to easily make updates when regulatory agencies change standards for documentation or formats in which electronic data is kept or shared, Tadikonda says.
Tadikonda founded the company in 2004 with a deep understanding of standards for regulated content in the life sciences industry. Before launching Virtify, he founded a scientific consulting firm called Tribiosys as well as Enmed, a developer of clinical trials and data management systems. During his career, he and his employees have worked on developing some of the standards for maintaining regulated content or sharing health data. Over time, it became apparent to him that many companies weren’t equipped to equipped to handle the management of regulated documents with paper-based systems and previous technologies.
He has built his latest company with people he got to know at previous companies of which he was a founder or an executive. For instance, the executive chairman of the company is Michael Webb, a well-known biotech industry veteran in Massachusetts, with whom Tadikonda worked at Epix Pharmaceuticals (then Epix Medical.) Lexington, MA-based Epix ran low on cash while pursuing a treatment for Alzheimer’s and shut down last summer, well after both Tadikonda and Webb (who is the former CEO of Epix) had left the company.
Indeed, the downfall of Epix is a sobering reminder of the outrageous costs of developing products regulated by the FDA and other agencies. And as long as regulators are amending and churning out compliance standards for life sciences companies, Virtify is likely to have plenty of customers.