…Today, Veeva provides the cloud backbone for the $1.7 trillion life sciences industry where it rivals the likes of Medidata Solutions (MDSO), and counts companies like Pfizer (PFE), Novartis (NVS), Amgen (AMGN) and Eli Lilly (LLY) among its customers.
As drugmakers tackle the challenge of developing, testing and manufacturing lifesaving drugs, Veeva operates the cloud system in the background. Its dual roles include organizing doctor information for pharmaceutical reps and clinical trial data/graphs for companies.
Gassner calls the latter point “Veeva’s second act.” In total, Veeva estimates its total addressable market at $7 billion, though Gassner expects its nascent third act could add another $1 billion onto that.
Veeva launched 10 years ago with a single application to help pharmaceutical reps organize drug data to make stronger doctor pitches. Today, 60% of the globe’s pharma sales reps use what’s called Veeva CRM — customer relationship management — an iPad application.
But it’s Veeva’s second act that really has Wall Street keyed up, he said.
Veeva Vault was launched in 2011 with a single customer and the goal of organizing all content involved in clinical trials — documents, videos, images and data records. Vault represents about a third of Veeva’s total sales and targets a $4 billion total-addressable market, Gassner said.
He sees Vault as the reason for recent excitement around Veeva stock. Shares are up 29% since January and, on March 13, burst out of a cup-with-handle formation that began in November, topping a 45.95 buy point on a deeper Salesforce partnership. The stock is now more than 14% extended from that point.
That salesforce partnership is a great kicker, they are really looking to buy someone, why not Veeva?
Now, Vault is prepping for a potential third act by looking for opportunities outside life sciences — a first for Veeva. Gassner says Veeva could see an additional $1 billion opportunity in taking Vault to other manufacturing-heavy industries like chemicals and consumer packaging.
O’Neil’s Ash says success in that venture will be a “game-changer” for Veeva.
“Your brand becomes what you’re good at,” Gassner said. “If we become good at delivering this value outside life sciences, then I think over time we’ll become known for that.”
David Gardner likes a stock with multiple possible futures.
I really like this one and have been long since the early breakout. Very nice growth numbers, in the cloud and clearly some top notch customers it is making happy.