Irvine-based DataLabs Inc., which makes software for drug trials, got its start in 1999 with a big backer.
For much of the company’s first two years, it worked solely for Merck & Co., said Nick Richards, DataLabs’ chief operating officer.
Merck provided funding and a collaboration deal, Richards said.
“The nice thing was that we really didn’t have to spend any money on marketing and things like that,” he said. “We had as much business as Merck could give us.”
Working with Merck gave DataLabs the chance to tailor its software to drug developers undergoing clinical trials, according to Richards.
The company re-designed its software “based on requirements from Merck,” he said.
“It gave us time and a lot of feedback,” Richards said. “If we had to spend money to develop focus groups or pay for focus groups, that would have been hundreds of thousands of dollars.”
At one point, DataLabs had some 100 Merck employees working with them on the software, Richards said.
These days, DataLabs has other customers. Irvine-based Allergan Inc. is among them, as is the Department of Veterans Affairs, Richards said.
Other customers include contract research groups doing trials for drug companies, governments, university medical centers and drug companies themselves.
The privately held company, which employs about 60 people, said its sales were in the low eight-figure range. DataLabs raised $5.5 million in a first round of venture funding from Nexus Advisory Corp. of Laguna Hills.
At the time of the funding in 2004, David Barnes, Nexus’ president, said he believed DataLabs had the “right products, partners, business strategy and management team.”
“Because clinical trials comprise a significant portion of the time and cost it takes to bring a new drug to market, the ability to conduct clinical trials faster, more efficiently and with fewer resources is quickly becoming a critical success factor,” Barnes said.
DataLabs’ goal is to cut the cost of drug development by streamlining clinical trials. The company’s main product is DataLabsXC, Windows-based software that helps design clinical studies and manages study data.
The company was introduced to Allergan by way of Charles River Laboratories International Inc., a Wilmington, Mass.-based contract researcher that’s done clinical studies for the drug maker, Richards said.
DataLabs has several competitors, some of them big: Phase Forward Inc. of Waltham, Mass., eTrials Worldwide Inc. of Morrisville, N.C., and Oracle Corp.’s clinical business unit.
As for going public or being acquired, Richards was mum. DataLabs has an acquisition of its own pending, but Richards said he couldn’t give details.
“We’re always looking for growth potential, so we realize that as the market starts to consolidate and people are getting bigger, that we’re going to have to look for those opportunities,” he said.
