TraceLink Bags $93M, Plans A.I. & Blockchain Tools for Drug Tracking

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By Jeff Engel

Xconomy Boston — Step one for TraceLink, a maker of software that helps track the supply chain of pharmaceuticals, was recruiting hundreds of thousands of companies and organizations to its digital platform.

Now, much like the playbooks of social media companies and other tech firms, step two will be to develop “new applications on top of that infrastructure”—thereby taking advantage of “the information and the network that we’ve built to drive even greater value for our customers” says TraceLink CEO Shabbir Dahod.

A new cash infusion might help the company in that endeavor. On Tuesday, the North Reading, MA-based firm announced it closed a $93 million funding round led by Georgian Partners, a later-stage investor based in Canada. Georgian was joined by new TraceLink investors Vulcan Capital and Willett Advisors, as well as earlier backers FirstMark Capital, Volition Capital, F-Prime Capital Partners, and Goldman Sachs, according to a press release.

The $93 million investment includes $60 million that was revealed in a June documentfiled with the SEC. TraceLink says it has now raised a total of $167 million from investors to date.

The 500-person company sells cloud-based software that enables companies in the pharmaceutical industry to perform various tasks around authenticating and tracking the drugs they work with. That includes meeting regulatory compliance standards, storing what can be a massive amount of data created by tracking individual packages of drugs, and interacting with other companies that use TraceLink (such as manufacturers coordinating with distributors).

As Xconomy has reported, the nine-year-old company aims to not only let customers track large amounts of data, but its software is also meant to let them exchange data on the platform, almost like a social network. TraceLink’s software capabilities include instantly notifying every organization in the network when there’s a drug recall. Organizations can then use the company’s inventory tracking functions to figure out where the product is located, Dahod says.

TraceLink’s software is currently tracking nearly 1 billion pharma products, Dahod says. Its network connects more than 270,000 pharmaceutical companies, contract manufacturers, wholesale distributors, hospitals, pharmacies, and other organizations worldwide. The company counts more than 950 of them as customers, Dahod says. He declined to share the company’s revenues, but he says they’re growing quickly.

The company’s future product ideas include developing machine learning applications for customers to crunch the vast amounts of supply chain data they’re accumulating, in order to, say, manage drug inventory better and predict shortages, Dahod says.

“All of this converges into a massive data store that now we’re building out,” he says. “We want to leverage it with new technologies, such as machine learning, to have better integrity of product … and more predictable forecasts.”

Another area of interest for TraceLink is blockchains, the online, distributed ledger systems that power cryptocurrencies such as Bitcoin. TraceLink is developing blockchain-based software to help the pharma industry meet certain track and trace requirements in the U.S. Drug Supply Chain Security Act, Dahod says. He says the company will release more details about the project by the end of the year.

There’s a lot of hype surrounding blockchains, but not many products having an impact. Still, TraceLink isn’t alone in attempting to apply the emerging technology to supply chains. IBM and Maersk, the European shipping and logistics company, have formed a joint venture working on blockchain software for supply chains. Meanwhile, Walmart and several other brands are starting to use IBM software to track the supply of food.

Dahod says TraceLink customers have “curiosity” and “early interest” in blockchain systems for the pharma supply chain. “We believe we have a very practical approach to a solution that is more in line with the value proposition that blockchains provide,” he adds.

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TraceLink, which helps pharma companies trace drugs through the supply chain, just raised $93 million

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By Connie Loizos

TraceLink, a nine-year-old, software-as-a-service platform for tracking pharmaceuticals and trying to weed out counterfeit prescription drugs in the process, has raised $93 million in Series D funding. Most of the money — $60 million — was used to buy primary shares, with another $33 million used to buy up the shares of previous shareholders.

Georgian Partners led the round, with participation from Vulcan Capital and Willett Advisors, along with all of the company’s earlier investors. These include Goldman Sachs, whose growth equity arm had led the company’s $51.5 million Series C round last year, as well as FirstMark Capital, Volition Capital and F-Prime Capital.

As TC had reported at the time of that last round, TraceLink  helps pharma companies comply with country-specific track-and-trace requirements through their supply chain, which has grown increasingly important following the passage of the Drug Supply Chain Security Act in 2013. The consumer-protection measure aims to prevent individuals’ exposure to drugs that could be counterfeit, stolen, contaminated or otherwise harmful.

At the time of its enactment, it also gave the industry one decade before unit-level traceability becomes enforced, meaning the clock is ticking.

Like Uber, WeWork and a small-but-growing number of private companies, TraceLink also appears to be preparing for life as a publicly traded outfit by releasing some of its financial metrics, including, in TraceLink’s case, quarterly revenue and customer growth numbers.

Just last week, the company published its “financial growth highlights,” which include a 62 percent year-over-year increase in its second quarter revenue; a 42 percent year-over-year increase in all bookings over the same period; and two-year revenue compound annual growth rate of 71 percent.

In June, we reported on TraceLink’s initial $60 million of funding after spying an SEC form relating to its fundraising. The company, based in North Reading, Ma., has now raised $167 million altogether.

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Startup raises $51.5M to combat the global counterfeit drug trade


Global prescription drug sales will soon exceed $1 trillion per year. With this much at stake, it’s not surprising that the market for counterfeit medicines is also booming.

It’s a complex threat, which North Reading, Massachusetts-based TraceLink aims to tackle with software that can monitor every ingredient and every stage of an international drug supply chain.

On Wednesday the company announced a new $51.5 million Series C financing round that will help the company scale and manage the huge volumes of data involved. The round was led by Goldman Sachs Growth Equity (GS Growth), with backing from earlier investors FirstMark Capital, Volition Capital, and F-Prime Capital.

Founded in 2009, TraceLink caters to businesses at every manufacturing stage with a family of Software as a Service (SaaS) applications, integrated with Amazon Web Services. By offering a range of software solutions TraceLink can begin to address one of the major industry challenges — a lack of international standardization.

“As part of a global marketplace, the pharmaceutical industry is facing an increasingly complex set of laws and regulations designed to secure the supply chain from manufacturer to consumer,” said Jason Kreuziger, a vice president on the GS Growth team in the Merchant Banking Division at Goldman Sachs. “TraceLink’s solution uniquely addresses the challenges of capturing, storing and transmitting product identifying data at scale and across a large number of supply chain partners.”

From a manufacturing standpoint, supply chains continue to increase in length and complexity. Hundreds of raw materials and components come together in different countries around the world. To produce a valid product, manufacturers have to comply with many country-specific track and trace requirements, which are distinct and ever-evolving.

The World Health Organization estimates that up to 10 percent of medications distributed throughout the world are counterfeit. While developing countries are disproportionately affected, the United States is not immune.

Counterfeit drugs can — and do — enter drug supply chains at every point. Each year they cause hundreds of thousands of deaths and cost the industry an estimated $75 billion in revenue.

Unlike other fields, there have been no universal guidelines for companies to follow. But with the introduction of the Drug Supply Chain Security Act (DSCSA) the industry’s haphazard oversight is slowly beginning to improve.

Signed in 2013, the DSCSA is being phased in over a number of years. By 2020, 50 countries will require an interoperable system for tracking and tracing authentic medications.

In the news release, president and CEO Shabbir Dahod said TraceLink’s software caters directly to that need.

“Thousands of businesses in the pharmaceutical supply chain need to make decisions on how to comply with time-bound regulations. With limited choices available, TraceLink wants to give these companies the opportunity to meet the regulations and achieve benefits beyond compliance with an established track and trace solution that can help them safely deliver drugs to patients.” 

The issue of counterfeit drugs extends beyond good tracking and tracing software. Countries also have to grapple with demand and how to police the industry, as consumers take advantage of increased access to prescription drugs, mediated by the Internet.

But for pharma, compliance must come first, to protect their brand and their customers.

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TraceLink, helping the pharma industry trace and track drugs, lands $51.5M from Goldman Sachs


TraceLink, the SaaS platform for tracking and tracing pharmaceuticals, has today announced the close of a $51.5 million Series C financing led by Goldman Sachs Growth Equity. Existing investors, such as FirstMark Capital, Volition Capital, and F-Prime Capital, also participated in the round.

As part of the deal, Goldman’s Jason Kreuziger is joining TraceLink’s board of directors.

TraceLink was founded in 2009 with the introduction of the Life Sciences Cloud, a suite of SaaS applications that are natively integrated with AWS. The Life Sciences Cloud allows pharmaceutical businesses to comply with country-specific track and trace requirements throughout their supply chain.

In 2013, the DSCSA (Drug Supply Chain Security Act) was passed, requiring pharmaceutical companies across the supply chain to do a better job of tracking drugs from manufacture to the patient. The Act gives ten years before unit-level traceability is enforced, giving the industry the chance to invest in the services and equipment necessary to achieve compliance.

That’s where TraceLink comes in.

TraceLink’s software allows manufacturers, distributors and dispensers to secure their drug supply chain and stop the trade of counterfeit medicines. According to the company, the issue of counterfeit medicines causes hundreds of thousands of deaths each year and leads to an estimated $75 billion in lost industry revenue annually.

Here’s what TraceLink CEO Shabbir Dahod had to say about it:

Thousands of businesses in the pharmaceutical supply chain need to make decisions on how to comply with time-bound regulations. With limited choices available, TraceLink wants to give these companies the opportunity to meet the regulations and achieve benefits beyond compliance with an established track and trace solution that can help them safely deliver drugs to patients. As a result of this growing industry need, we have continued to surpass our growth goals and are delighted to have this support from world-class, visionary investors to pursue our dedicated strategy in this space and further accelerate the adoption of our proven platform and leadership across the global market.

If you want to learn more about TraceLink, hit up the website right here.

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TraceLink raises $51.1 million to speed growth


TraceLink Inc., a North Reading startup that develops software to help drug companies fight counterfeiting by tracking their medicine shipments, said Wednesday that it has raised $51.5 million in venture capital to speed its growth.

The company will use the cash infusion to beef up its sales and marketing operations in Europe and elsewhere while working on new health care and patient adherence software application, said chief executive Shabbir Dahod. “We’re continuing our expansion globally,” Dahod said.

TraceLink’s latest funding round — its third — was led by Goldman Sachs Growth Equity. Also taking part were previous TraceLink investors FirstMark Capital of New York, Volition Capital of Boston, and F-Prime Capital, a Cambridge affiliate of Fidelity Investments. The round brings the company’s total funding to $77 million. TraceLink initially raised $5.5 million in February 2014 and it raised another $20.2 million last year.

Starting next November, a US law will require drug makers and their contractors to begin tracing their shipments to combat counterfeit prescription drugs, which have sickened patients and bedeviled health officials for decades. Similar laws and regulations will be taking effect in the coming years in Europe, China, Japan, and several other places.

TraceLink is among a cluster of technology vendors selling tools to document the path of drugs from manufacturers to distributors and dispensers, and finally to the pharmacies that sell the products. Competitors include German software giant SAP, along with more than a dozen smaller companies, such as Axway Software SA of France, rfXcel Corp. of San Ramon, Calif., and Frequentz Inc., a Palo Alto, Calif., company that bought a software business from IBM Corp.

Dahod said he expects TraceLink will seek to go public in the near future through an initial public offering, but he declined to specify a timetable.

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With its software, TraceLink capitalizes on drug counterfeiting crackdown


A three-year-old US law requires drug makers and their contractors to begin tracing shipments of medicines by November 2017. As the pharmaceutical companies scramble to comply, technology vendors are developing tools to help them document the paths of drugs from manufacturers to distributors anddispensers and then to the pharmacies that sell them.

Dahod’s company, TraceLink Inc., is preparing to capitalize on the Drug Supply Chain Security Act, passed in 2013 along with similar laws and regulations taking effect in coming years in Europe, China, Japan, and several other places. The tracking will start with large lots of drugs shipped on pallets in the United States, but by 2023 it will extend to smaller containers, and distributors will have to plug into interconnected networks.

“It’s about putting an identity on each individual product and tracking it through the supply chain so you know the chain of custody,” said Dahod, 53, TraceLink’s chief executive.

Federal and state officials have been battling counterfeiting that often involves second- or third-line distributors selling watered-down or unapproved medicines, causing sickness and death in some cases.

In a 2014 case, the Justice Department won indictments of executives at Pharmalogical Inc., a Great Neck, N.Y., distributor doing business as Medical Device King, for selling counterfeit versions of the cancer drug Avastin to dozens of clinics, including 10 in Massachusetts.

Monitoring compliance with the new US law will be the Food and Drug Administration, which approves and regulates prescription medicines.


“One of our top priorities is to protect patients from unsafe medicines,” said Ilisa Bernstein, deputy compliance director for the FDA’s Center for Drug Evaluation and Research. “We want to further tighten the supply chain so we can keep good drugs in and keep bad ones out. The goal is to have accountability and transparency throughout the supply chain.”

Dahod has been focusing on “track-and-trace” technology for about 15 years. His first company, SupplyScape Corp., was launched in 2003 in Cambridge’s Kendall Square. It sought to commercialize supply-chain technology developed at MIT’s Auto-ID Labs through a team led by professor Sanjay Sarma.

That business was relaunched in 2009 with capital from the New York venture capital firm FirstMark Capital and folded into a new company, TraceLink. Last year, as governments stepped up efforts to stop counterfeiting, TraceLink raised $20 million from a new group including Volition Capital of Boston, Fidelity-owned F-Prime Capital Partners of Cambridge, and FirstMark.

The company now employs about 255 workers, more than 200 of them in an office park off Interstate 93. It has created a system that uses bar codes to serialize products and software to generate data — on the type of drug, where it was made, and shipment dates — that drug makers can share with partners and regulators.

Dahod estimates the emerging global market for drug-tracking systems eventually will top $2 billion, about half of it in the United States and Europe.

TraceLink won’t have the market to itself. Competitors include the German software giant SAP, along with more than a dozen smaller US and overseas companies, such as Axway Software SA of France, rfXcel Corp. of San Ramon, Calif., and Frequentz Inc., a Palo Alto, Calif., company that purchased a track-and-trace software business from IBM Corp.

Some of these players already sell similar software programs that track food products, consumer goods, or semiconductors.

Others are marketing “on premises” systems that biopharma customers and their vendors can install on in-house servers. TraceLink, by contrast, runs its Internet-based tracking system off servers operated by Inc.

“The market’s going to grow very fast,” said Michael Townsend, research manager for life sciences business systems strategies at IDC Health Insights in Framingham. “It’s probably going to triple in the next few years. The pharma companies and the distributors are actively working on this, spending money and buying software.”

The deadline for complying with the federal tracking requirement has created a window for TraceLink and its rivals to sell their systems and services to the hundreds of biopharma companies marketing FDA-approved drugs and the thousands of contract manufacturers hired to produce the drugs and distributors who ship them through the supply chain.

“The ultimate goal is to have complete visibility of every step, from manufacturer to patient,” Dahod said. “That will create better outcomes for everyone.”

If it succeeds, TraceLink, which has participated in pilot programs and helped develop the technical standards for the field, could become a market leader — and pave the way for an initial public offering of stock that would enable it to accelerate its growth.

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