Bit by bit, the IPO market is picking up steam. And, the latest deal hit the markets today: Medidata (NASDAQ: MDSO).
So far, the shares are up 19% $16.70 (the IPO priced at $14, which was above its $11-$13 price range).
Founded about ten years ago, Medidata develops web-based software for clinical trials management. Obviously, it's a big market opportunity.
Keep in mind that a drug costs more than $1 billion to develop. Oh, and the process can easily go beyond a decade. In other words, it's important to streamline the process.
As a sign of its prowess, Medidata has 22 of the top 25 global pharma companies as customers. Some include Amgen (NASDAQ: AMGN), Pfizer (NYSE: PFE), and Johnson & Johnson (NYSE: JNJ).
Much of the revenues are long-term contracts (and yes, the customers have few problems paying their bills). In fact, the top-line has been growing at a rapid clip, going from $63 million in 2007 to $105.7 million in 2008. Moreover, Medidata has been cash-flow positive since 2006.
Besides, in light of the expected reforms from Obama Administration, there is likely to be a bigger emphasis on electronic records. No doubt, this should be a nice boost for Medidata, which is at the cutting-edge of this area of healthcare.
To learn more about the company, you can check out the prospectus as the SEC website.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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