- Large companies are becoming software powerhouses unto themselves in order to use AI and other advanced tech to overhaul operations. But it’s not just the corporations that are getting in on the action.
- Startups looking to scale are also looking to enterprise software.
- Enable Injections is using a platform from the German software firm SAP to be able to produce millions of its wearable drug-delivery devices overnight to tap into the expected $400 billion biologics market, which involves advanced medications made from living organisms.
- The company already has partnerships with several large pharmaceutical firms, including Genentech and Sanofi, and is in clinical studies.
- One reason Enable chose SAP over Microsoft was the company’s willingness to introduce new banking relationships to help pay for the platform, showing how large software firms are seeing new opportunity in the startup market.
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Corporations like McDonald’s and Walmart are quickly becoming software powerhouses inside their standard retail and fast-food operations. But it’s not just large companies benefiting from the digital revolution.
Enable Injections is hoping to get a piece of the expected $400 billion market for biologic drugs, or treatments made from living organisms, by revolutionizing how patients take the advanced medications. The product infuses similar to an automatic insulin injector, but with medication for diseases like breast cancer.
Founded in 2010, the company — which last year raised $50 million in a Series B funding round led by pharma giant Sanofi — went from having 68 to 145 employees in a year. But it was still doing the bulk of its business on paper, including all of its regulatory submissions to the Food and Drug Administration.
As Enable prepares to launch its wearable drug-delivery device to market in the next three years, Chief Financial Officer Tim Flaherty knew it needed a tech solution — so it turned to the German software firm SAP.
“Midmarket software did not make sense to us because what we didn’t want to have to do is two, three years down the road have to migrate to a larger system,” he told Business Insider. “We’re going to go directly from a development company to manufacturing company overnight. We’re going to launch with millions of products right out of the gate.”
The Enable partnership is just one example of how the enterprise-resource-planning (ERP) systems from SAP, Microsoft, and others, which are typically suited for large corporations, are helping startups prepare to immediately scale production to meet market demands — instead of getting caught flat-footed and missing out on millions, or even billions, of dollars in new revenue.
The typically cloud-based systems essentially allow companies to run several applications, including human resources and regulatory compliance, on one platform and, in many cases, automate much of the processes.
And in Enable’s case, there is good reason for that level of preparation.
The market potential for biologics is huge. But there’s a catch. The treatments, which address diseases such as rheumatoid arthritis, non-Hodgkin lymphoma, and Crohn’s disease, are typically administered in a physician’s office, making it a time-intensive treatment and one that could be a major intrusion on someone’s day-to-day life.
Enable is trying to change that. The wearable device is designed so that patients would be able to infuse the drug outside a physician’s office. It already has partnerships with several top pharmaceutical firms, including Roche, Genentech, Sanofi, and Eli Lilly & Co.
The company is currently in the clinical stage, moving towards approval as a combination product, meaning the device would sell alongside a specific biologic drug as a package.
‘SAP is changing their entire model to go after companies like ours’
It was difficult for Flaherty to sell SAP’s technology internally.
For starters, Enable was one of the earliest adopters of SAP’s ERP system in the history of the company, showing how only a few small organizations are pursuing such digital solutions that can cost, according to Flaherty, between $4 million and $5 million.
“SAP is changing their entire model to go after companies like ours and showing people that early stage is the right time to do it because you have a clean slate, and you can start from scratch,” Flaherty said.
The company ended up soliciting pitches from several vendors, ultimately narrowing it down to SAP and Microsoft. SAP offered standout terms that helped close the deal, including extended licensing and the ability to phase in modules, like the regulatory compliance system, as needed. Such an agreement was critical to a startup that may not need the more advanced applications until closer to production.
That sort of package, Flaherty said, was unheard of five years ago and was unmatched by the other potential partners the company was in discussions with, including Microsoft. One unique offer from SAP was a promise to introduce them to banking partners to help pay for the platform over the next 36 months.
As a startup, “if you go to your traditional banking company, they don’t want to touch you because it’s all about collateral,” Flaherty said. “The partners they brought are willing to invest in the company as well and take some risk, hoping to be a longtime partner.”
About 85% of Enable’s big-pharma partners already run the SAP system, he added.
The way Enable is phasing in SAP modules could be a model for other startups looking to scale fast.
Typically, suggesting a major investment when you are still operating as a development company with no product would be unheard of, according to Flaherty. But that is exactly one reason why it made so much sense.
Because the company was starting from the ground up with no other existing infrastructure, it could easily apply SAP’s systems and then scale the partnership as Enable grew. That made it a more cost-effective strategy, since applications could be added as cash flow allowed and need permitted.
Since the company is not yet in production mode, for example, Enable is also using SAP’s system for plant maintenance. It plans to soon use applications on the system to manage FDA compliance before launch.
Enable can also use SAP’s platform to track compliance across the organization. If an employee, for example, were found not to be trained properly for their job function, the platform would immediately restrict access for that person until they completed the necessary education to be compliant with federal guidelines for medical-device manufacturing.
The partnership between Enable and SAP shows how startups, which are often not thought of as using the most advanced digital platforms, are now harnessing such offerings to be able to scale quickly and meet growing demand, thus preventing any lost revenue or production delays.
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