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IntrinsiQ LLC — Dose of Success
By Robert Celaschi, Boston Business Journal
WALTHAM — For years IntrinsiQ LLC lost money on its popular software product for oncologists. Raising the price helped, but the real moneymaker turned out to be the data collected by the doctors using the software.
The Waltham-based company was founded in 1996, two years after a patient at Dana-Farber Cancer Institute died from an overdose of cancer medicine.
Back then oncologists figured out dosages with a pen, paper and a calculator, and 70 percent still do, said Brent Clough, IntrinsiQ's CEO.
The company's answer was IntelliDose, software that figures out proper doses. It was the idea of Dr. Brent DuBeshter, now the director of oncology in obstetrics and gynecology at the University of Rochester Medical Center.
"It took a couple of years to perfect it," DuBeshter said. "The original intent was to provide a tool to oncologists to have as many error-checking algorithms as possible."
Sales were modeled after AOL software: IntrinsiQ would send out trial discs and hope that doctors would sign up at a monthly fee.
It didn't work.
IntrinsiQ ended up contracting with drug-maker Amgen Inc., which wanted to track how its own products were being used.
"That got us placed in hundreds of offices around the country," DuBeshter said.
Even with the Amgen contract, the low price didn't cover the high cost of sending trainers to medical offices around the country. As of 2003, IntrinsiQ was still in the red.
But IntrinsiQ had another asset. To refine the software, the company early on had every customer agree to provide data on how specific drugs were being administered. Every weekend the server at each doctor's office would send data back to IntrinsiQ, stripped of information that could identify individual patients.
By 2003, IntrinsiQ hit critical mass; it had data from about 30 states and more than 300 oncologists, information it could then sell to drug companies.
"It was really the strength of the data business that allowed us to become profitable," Clough said.
IntrinsiQ was in the black by 2004.
"We've evolved now to where on our pharma business we generate in excess of 5,000 Excel reports every month," Clough said.
The company also raised the price of IntelliDose several times over. It turned out that doctors perceived the low price as meaning the software had low value, said Ted Owens, IntrinsiQ's chief operating officer.
"The strategic importance of changing the software model is if we can have the software business be in the black, then the data coming out of our software business is essentially free to us. And that is a significant competitive advantage," said Owens.
Competitors must pay doctors for data, usually collected through questionnaires, Clough said.
Revenue nearly doubled from $6.3 million in 2004 to $12.3 million in 2006. That year, IntrinsiQ sold a majority stake to Accel-KKR, a private equity investment firm in Menlo Park, Calif., and used the money to double the staff.
"We now have the right organizational chart to really allow us to scale the business for growth," said Clough, predicting this year would bring in close to $24 million in revenue.
The first expansion is a contract to sell data to PRA International, a contract research firm based in Raleigh, N.C. The data will be used to speed up clinical trials for new cancer drugs.
"Until IntrinsiQ there hasn't been a good solid set of data out there that can tell us how many patients with a particular tumor type at a particular stage of the disease are getting a particular drug or drug combination," said Kent Thoelke, PRA's senior vice president for scientific and medical affairs.
Knowing that information makes it easier to plan clinical trials.
"What we don't want to do is have our clients -- the pharma and biotech companies -- waste time in trying to get patients that aren't actually there," he said. Slightly changing the criteria of a trial could mean a big jump in eligible patients.
The next step will be to go beyond oncology, said Clough. The infrastructure already in place could be adapted for drugs used to treat HIV AIDS, cardiovascular disease or other medical problems.
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