Start-Up Paradigm Raises $200 Million to Speed Up Drug Trials

For individuals suffering from a deadly disease, clinical trials for drugs offer lifesaving hope. But for all the rapid advances in science and medicine, some of the building blocks of clinical trials — the back-end technology, data aggregation and patient recruitment — haven’t changed much in decades.

One start-up hopes to streamline the process. Paradigm, a company based in New York, is building technology that it says will make it easier for doctors, researchers and big pharmaceutical companies to carry out the often convoluted and messy work of clinical trials.

Kent Thoelke, the chief executive of Paradigm, should know. Mr. Thoelke spent more than 25 years overseeing drug development and clinical trials at various health care companies and saw many of the inefficiencies firsthand.

“I had spent my entire career beating my head against the wall in a system that couldn’t get out of its own way,” he said.

In his previous job as chief innovation officer of Icon, a company that arranges clinical trials on behalf of big drug companies, he remained a vocal critic of the industry’s practices. So when Robert Nelsen, a venture capitalist, approached Mr. Thoelke in August 2021 about building a new system for clinical trials, he jumped at the chance. Mr. Nelsen’s firm, ARCH Venture Partners, had helped build dozens of start-ups into giant companies, including Illumina, a $33 billion gene sequencing company.

So far, Paradigm has raised roughly $200 million from investors. Only three other health care start-ups secured that much money last year in their early stages, according to data from Crunchbase.

It’s an unusually large sum for a fledgling company, but one that reflects the opportunity in a growing industry held together by a patchwork of outdated technologies that don’t always talk to one another. Last year, more than 430,000 clinical trials were conducted globally, according to government data. By comparison, there were just over 2,000 trials in 2000.

“Part of the problem with what we do with trials is there’s a lot of misplaced precision,” said Dr. Laura J. Esserman, a breast cancer surgeon at the University of California, San Francisco, who has been an innovator in clinical trials but is not affiliated with Paradigm. “We spend a lot of effort on things that aren’t particularly meaningful.”

In the United States, before a drug or treatment can be approved for use by the Food and Drug Administration, it must go through multiple phases of clinical testing to assess its efficacy among hundreds, or even thousands, of patients.

Pharmaceutical companies paid out nearly $50 billion last year to third-party companies, known as contract research organizations, according to the Tufts Center for the Study of Drug Development. These firms, which include Icon and Labcorp, help them recruit patients for drug trials and administer them.

Such companies essentially act as middlemen for drug companies and major academic medical institutions. They work with hospitals and universities to recruit and retain patients. But the information about a patient undergoing a clinical trial tied to a university system is stored separately from the electronic medical records that a doctor or hospital might keep on the same patient.

The two systems not only are duplicative but also introduce the possibility of transcription errors since doctors and nurses must enter a patient’s data twice. What’s more, contract research companies often send their own people to verify the data, adding to the costs.

Clinical care and clinical research are “today parallel distinct worlds,” said Kenneth Getz, a professor at Tufts University School of Medicine who runs the center studying drug development. “The documentation required is daunting.”

Paradigm wants to merge the clinical care and research worlds by synchronizing its software platform with the software that tracks a patient’s electronic medical records. Its software, which is compliant with privacy laws, would then filter relevant information into the clinical trial data and screen for anomalies. Its software can also help doctors screen patients for eligibility for existing studies.

The start-up expects to make most of its money by charging pharmaceutical companies for finding patients and administering the trials and by using its technology to cut costs.

Currently, only 3 to 5 percent of eligible patients participate in clinical studies, according to F.D.A. data. For instance, participation rates for cancer studies range from 2 to 8 percent, according to a recent study in the Journal of the National Cancer Institute. Black Americans are significantly underrepresented in these studies.

Because Paradigm hopes to reduce the administrative burden of clinical trials with its technology, Mr. Thoelke said, the company could make it easier for smaller hospitals — which often cater to communities with more diverse populations — to participate. Mr. Thoelke estimated that Paradigm’s software could allow 85 to 90 percent of physicians to participate in research.

“All of a sudden, there’s a scale for drug trials that hasn’t existed before,” he said.

Heidi Williams, a professor of economics at Stanford University who has studied the low representation of minorities in clinical trials, said there was a huge need for change in the industry. Yet, she said, there’s also a long history of failed technology companies that promise to make money by cutting costs from the health care system.

“The problems are often more complicated than we realize, and the easy way to save money didn’t really work,” Ms. Williams said.

Paradigm is hardly the only start-up trying to fix the process of clinical trials, but Mr. Thoelke is betting that his company’s $200 million in funding will buy it time to build its system carefully.

Kenneth Frazier, a former chief executive of the pharmaceutical giant Merck, who sits on Paradigm’s board, said they were aware that it would take a long time to make any changes.

“We’re trying to change a system that’s grown up over decades. This is a long-term play,” Mr. Frazier said. “It’s hard to think about changing health care in less than a decade.” He is also an executive at General Catalyst, one of the venture capital funds that helped found Paradigm and are backing it.

In addition to ARCH and General Catalyst, Paradigm’s backers include other venture firms, sovereign wealth funds and the American Cancer Society’s BrightEdge fund. Another Paradigm founder, Jonathan Hirsch, previously founded a cancer data analytics company.

Mr. Getz of Tufts said Paradigm “sounds very promising conceptually,” as it is tackling some of the crucial challenges the industry faces. But “one of the biggest barriers or challenges in this industry is how do you get around a C.R.O. that is well established or well entrenched,” he added, referring to contract research organizations like Labcorp.