Today’s Deal Radar is another great bootstrapping case study! GlobalSubmit (formerly known as Intuitive Technologies), provides validation and review software for electronic control technical document (eCTD) submissions for the Food and Drug Administration (FDA) and life sciences companies. As Intuitive Technologies, the company created publishing products for the financial industry. However, the economic downturn in 2001 combined with the emergence of eCTDs forced GlobalSubmit to redefine themselves. While submissions are historically done on paper, the eCTD provides an electronic format to submit the documents that make up marketing applications such as the New Drug Application (NDA), which pharmaceuticals and biotechs submit to the FDA when they want to take a drug to market.
While competitors were focusing on the early adopters in the pharmaceutical industry, GlobalSubmit co-founders Rahul Mistry and Jason Rock decided to win over the FDA. They wanted to get into the agency and become its reviewing system. They focused on the FDA reviewer and reviewers within these companies themselves as opposed to the people who were putting the data together. After two years and an extensive request for proposal (RFP) process, they won that project and haven’t looked back. Today, when it comes to reviewing and validating eCTDs, GlobalSubmit has a majority of the market, in which only 12% to 14% of submissions are eCTDs. They foresee further growth when electronic submissions become mandatory.
Since they provide the validation and review software for the FDA, when life sciences companies use their software, they see their data in the same way the FDA reviewers see it. So, if there are errors in the submission, chances are that companies will spot them before they are submitted. That greatly reduces the risk that they’ll receive a technical rejection, which when received delays the approval process until the errors are fixed. This, the company feels, is their primary differentiator.
Headquartered in Philadelphia, Pennsylvania, GlobalSubmit is primarily a subscription-based company. Customers purchase software in yearly or sometimes three-year contracts. This gives them access to their software on site within their organizations. They have also done smaller consulting engagements in the past where a company rents their software for a month or so and provides them consulting services so that the submission going out the door was of the highest quality. Likewise, they’ve also done larger, enterprise perpetual deals, but 90% of its revenues come from the subscription model.
The company’s top target segments are large and mid-tier pharmaceuticals and biotechs. They currently provide products and services to nearly 50 pharmaceutical companies, 40 or so of which are active clients. The company did not provide the name of these clients. They also have a user base of over 4,000 reviewers worldwide.
GlobalSubmit was bootstrapped from early on. In 2004, they took $500,000 in a round of angel funding to develop the software to win the FDA contract, but have not sought funding since then. The company has been cash positive since then and has been growing in the double digits every year. In April 2009, GlobalSubmit signed a Cooperative Research and Development Agreement (CRADA) with the FDA to develop software that allows FDA reviewers to review study design information and compare it with actual subject data more effectively. The project, which began late April, is expected to end in October 2011. The company feels that once the software is developed, they will have tremendous opportunity to grow. At that point, they may look to bring in additional funding to accelerate their growth and capture the study design software market.
This segment is a part in the series : Deal Radar 2009