Published on September 23, 2020. View original article on Investors.
A RedHill Biopharma (RDHL) clinical trial for a Covid-19 treatment will enlist the drug lab-optimized software system made by Veeva Systems (VEEV), the companies said Wednesday. The move sent hot VEEV stock up and helped make it the IBD Stock Of The Day.
But this is far from the first Covid-19 treatment effort to use Veeva's expertise. The company is a leading maker of software designed to smooth the complicated clinical-trials process for biotech companies and others. And its customers include a number of the companies leading the efforts to develop coronavirus vaccines and treatments, including Moderna (MRNA) and AstraZeneca (AZN).
Yet, Veeva's also benefited from the other side of the Covid era. That is, as the pandemic forces employers to do more work remotely, Veeva's customers in the life-science field have embraced more of the company's products and services. The quickening move to digitalization by the life sciences industry is a boon for Veeva.
"Long before the pandemic our job was leading customers down the path of digital transformation," said Paul Shawah, Veeva's senior vice president of commercial strategy. "The pandemic accelerated that transformation.
"In a sense, the pandemic helped bring our vision to life," Shawah told IBD.
At this point, in fact, he says one of Veeva's main challenges is helping customers through the process of major digital changes that are taking maybe six months where they might have taken three years.
One example of Veeva having the right products at the right time is its decision to release a free version of its Veeva SiteVault. This software helps drug companies and researchers do complex documentation remotely, and in the process can prod them to buy other Veeva products.
As it turns out, Veeva released this free product eight months ago, just before the pandemic emerged. Last week, the company said it already has more than 500 SiteVault Free customers, in over 30 countries.
The company late last month posted second-quarter earnings that handily beat Wall Street estimates. The company also hiked its outlook for the year. Adjusted earnings per share soared 31% and sales 33% from the year-earlier quarter. According to the company, Veeva sales have exceeded Wall Street expectations in all 28 quarters since the Pleasanton, Calif.-based company went public in 2013.
VEEV stock touched a record high of 298.76 on Sept. 2, shortly after earnings. Shares slipped 1.1% to close at 270.57 on the stock market today. Shares have managed to stay above their 50-day moving average almost continuously since late March.
Now, VEEV stock could be forming a base, with a potential buy point of 298.86. Investors also might look to adjust the size of their position in the stock. Here's a link to our position size calculator.
Ranking No. 6 on the IBD 50 listing of top-performers, VEEV stock sports a Composite Rating of 98, where 99 is the highest-possible.
After the late-August earnings beat and raise, JMP Securities analyst Patrick Walravens raised his price target on VEEV stock to 293 from 210. He rates VEEV stock outperform.
"We continue to view VEEV as an excellent opportunity for long-term capital appreciation, as the company leverages its leading market position and platform to continue to build out its industry cloud for life sciences," he wrote in a research note.
The raised outlook prodded Canaccord Genuity analyst David Hynes to boost his price target on VEEV stock. Hynes raised his price target all the way to 285 from 195. He, however, maintained a hold rating, saying he missed a chance to upgrade the stock a few months earlier. Now he believes VEEV stock is fairly valued.
As for RedHill, the company plans to use the system in its trials to evaluate its treatment opaganib, or Yeliva. It's for patients hospitalized with severe Covid-19 pneumonia requiring treatment with supplemental oxygen.
Israel-based RedHill also said it would use contract research organization Bioforum. Bioforum will implement and configure Veeva's Vault CDMS software system for its Covid-19 treatment study. RedHill plans to quickly enroll up to 270 patients in 40 clinical sites worldwide. It aims to seek emergency use authorization for opaganib as soon as the fourth quarter of 2020.