The Operating System For Life Sciences
Updated October, 2024
Market/Symbol
NYSE:VEEV
Price
$210.630.35%
Market Cap
$34b
PE Ratio
54.65
Average Volume
910k
Pricing delayed 2 hours. Nov 21, 2024 8:00 AM
Investment Thesis
The Life Sciences Vertical Software Powerhouse
Veeva specializes in cloud-based data, software, and services for the life sciences industry. They operate through two segments:
Veeva Commercial Cloud: Offers customer relationship management (CRM) and content management solutions for sales, marketing, and regulatory compliance.
Veeva Vault: Provides a cloud platform for managing content and data related to clinical trials, regulatory submissions, quality control, and production.
The solutions help pharmaceutical, biotech, and medical device companies streamline operations and ensure regulatory compliance through a single platform. With 47 of the top 50 life science customers as clients, Veeva dominates its industry. This is a business with a clear competitive advantage and superior economics that should continue to compound for investors.
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”Veeva stands out from the other successful SaaS companies because of the company’s (1) efficiency in acquiring new customers and (2) high net annual retention rate. Veeva’s CAC (customer acquisition cost)”
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What the Pro's Are Asking
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Veeva initially built its CRM platform on top of Salesforce and the two companies agreed to not target one another industries. This allowed Veeva to come to market much faster and with a more complete/credible product. In 2022 however, VEEV announced it would transition customers to its new Vault CRM which it built independently. The move will allow the company full control over its tech stack and full integration of its entire product suite. The end of the non-compete agreement could also see Veeva move into new markets such as medical devices or consumer products. Financially, the shift is resulting in increased expenses and weighing on operating margins slightly, however, this should be recouped in the long run.
Management predicted that workflow shifts during the pandemic could reduce the industry's Salesforce by 10%. Veeva is built for in-person visits and salesforce reductions would mean fewer subscriptions but the shift to more digital workflows opens opportunities for new products.
SBC has increased steadily from ~5% 10 years ago to 16.6% in 2024. In technology companies, stock options are key to attracting and retaining top talent whilst maintaining alignment with shareholders. It is important to remember that this is a very real expense for shareholders. Either the company uses cash to buy back shares to negate any dilutions or shareholders pay the price when shares outstanding diluted EPS.
There has been little direct competition with Veeva in offering a comprehensive suite of products. Veeva has been taking customer wallet share from point solutions as they have broadened their suite of products.
Recently, however, the non-compete with Salesforce is expiring in 2025 the company is coming out with a competitive platform called Salesforce Health Cloud. This has been bolstered by the licencing of IQVIAs OCE product. Management at Veeva still believes they have a leading product and this will be Salesforce's first venture into vertical software. This is certainly something for investors to pay attention to.
AI is increasingly important in Veeva's product development, particularly in the areas of clinical trial management, regulatory compliance, and customer engagement. Veeva is using AI to automate repetitive tasks, improve data analysis, and offer predictive insights that can help pharmaceutical companies accelerate drug development and optimize marketing strategies. Veeva's AI-driven tools, such as those integrated within its Veeva CRM suite, help sales teams in life sciences engage more effectively with healthcare professionals by providing real-time insights and recommendations.
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External Insights
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Team
Peter Gassner
CEO
Peter Gassner is the visionary behind Veeva, one of the world’s most successful and innovative cloud software companies. He pioneered the industry cloud category when he founded Veeva in 2007 with the belief that vertical cloud software would be the next wave of cloud innovation. Today, Veeva helps more than 1,000 life sciences companies bring new medicines and treatments to patients faster.
Brian Van Wagener
CFO
Brian Van Wagener is Veeva’s CFO, responsible for finance, accounting, legal, investor relations, and treasury. He worked in various Veeva roles for over five years including chief of staff to the CEO and vice president of global sales operations.
Asaf Evenhaim
CEO, VEEVA CROSSIX
Asaf Evenhaim is CEO of Veeva Crossix, delivering best-in-class solutions to help health brands maximize marketing effectiveness. Asaf also oversees the development of SafeMine, our privacy-preserving patient de-identification technology and the data network that powers Veeva Compass and Veeva Crossix.
Asaf co-founded Crossix in 2005 and led the company to become the industry's leader in marketing analytics through the Veeva acquisition of Crossix in 2019.
Nitsa Zuppas
President and Chief of Staff
In her role as president and chief of staff, Nitsa Zuppas helps set, communicate, and execute company direction. Prior to assuming the role of president, Nitsa served as Veeva’s chief marketing officer from 2013 to 2024 – through its IPO and growth to become the industry cloud leader. Nitsa has more than 30 years of marketing and technology experience, with particular expertise in enterprise software and establishing category and market leadership.
Any questions?
Contact: Nirav Karia -
nirav.karia@curationcorp.com
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