Veeva Systems Co-Found & CEO Peter Gassner | Mad Money | CNBC

This video features an interview with Peter Gassner, co-founder and CEO of Veeva Systems, on CNBC's Mad Money, discussing the company's business model, market performance, and future outlook. The segment, hosted by Jim Cramer, delves into why Veeva, a cloud-based software provider for the pharmaceutical and life sciences industries, experienced stock turbulence despite reporting strong financial results. Gassner explains Veeva's core value proposition: replacing outdated legacy client-server applications with modern cloud-based solutions to enhance efficiency and effectiveness for its life sciences customers.

The discussion highlights Veeva's commitment to customer success, particularly for major pharmaceutical companies like Pfizer, Novartis, and Amgen. Gassner details how Veeva's CRM application empowers pharmaceutical sales representatives, enabling them to use mobile devices like iPads in the field. This allows for real-time note-taking, interactive presentations, and immediate access to product information, ultimately improving customer service for doctors and facilitating the timely delivery of medicine to patients, which in turn boosts sales for Veeva's clients. The interview also touches upon Veeva's impressive user adoption rates, with thousands of users going live across various countries, underscoring the widespread demand for their specialized solutions.

A significant portion of the conversation focuses on Veeva Vault, a content management platform specifically designed for the life sciences sector. Gassner expresses strong excitement about Vault's rapid growth, likening its trajectory to that of Veeva's CRM in the company's early days. He explains that Vault helps companies organize critical documents for clinical trials, standard operating procedures (SOPs), and manufacturing processes. This capability is paramount in a highly regulated industry, as inadequate document management can lead to severe consequences, such as manufacturing plant shutdowns. Gassner emphasizes Veeva's long-term vision, focusing on sustainable growth with strong top and bottom lines, maintaining profitability alongside high revenue growth, a characteristic that Cramer notes is uncommon among many cloud-based companies.

Key Takeaways:

• Specialized Cloud Solutions for Life Sciences: Veeva Systems provides cloud-based software tailored specifically for the pharmaceutical and life sciences industries, addressing their unique operational and regulatory challenges.
• Addressing Legacy System Inefficiencies: The company's core mission involves replacing outdated client-server applications that hinder innovation and efficiency within the life sciences sector with modern, user-friendly cloud platforms.
• Enhanced Commercial Operations with Mobile CRM: Veeva's CRM application significantly improves the efficiency of pharmaceutical sales representatives by enabling mobile access (e.g., on iPads) for real-time data entry, interactive detailing, and immediate access to product information, leading to better doctor education and increased sales.
• Critical Role in Drug Commercialization: By streamlining commercial operations, Veeva helps pharmaceutical companies accelerate the commercialization of new drugs, which is crucial given the limited patent windows in the industry.
• Veeva Vault for Regulatory Compliance and Operational Continuity: Veeva Vault is a vital content management platform that helps life sciences companies organize critical documents for clinical trials, standard operating procedures (SOPs), and manufacturing processes. This is essential for maintaining regulatory compliance and preventing severe operational disruptions, such as plant shutdowns.
• Strong Market Adoption and Customer Base: Veeva boasts significant user adoption, with thousands of new users going live across numerous countries, and serves major pharmaceutical clients like Pfizer, Novartis, and Amgen, validating the demand for its specialized offerings.
• Long-Term Growth and Profitability Strategy: Veeva's CEO emphasizes a long-term business building approach (10-20 years), focusing on achieving both high revenue growth (e.g., 62% last year) and strong profitability (consistently above 20% operating margin).
• Industry-Specific Innovation: The company's success stems from its deep understanding of the life sciences industry's specific needs, allowing it to develop highly relevant and impactful applications that address critical pain points.
• Impact of Inadequate Document Management: The video highlights the severe consequences of poor content management in life sciences, specifically mentioning the risk of manufacturing plant shutdowns due to unorganized or non-compliant documentation.

Tools/Resources Mentioned:

• Veeva CRM
• Veeva Vault
• iPad (as a mobile device for CRM application)

Key Concepts:

• Cloud Computing: Delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet ("the cloud") to offer faster innovation, flexible resources, and economies of scale.
• Client-Server Applications: Traditional software architecture where a client (e.g., a desktop application) requests resources or services from a server, often requiring local installation and lacking modern mobile flexibility.
• Content Management Platform: A system used to manage the creation, editing, organization, and publication of digital content, crucial for regulated industries to maintain compliance and operational integrity.
• Commercial Operations: The activities involved in promoting, selling, and distributing products, particularly in the pharmaceutical industry, focusing on sales force effectiveness and market reach.
• Clinical Trials: Research studies conducted on human volunteers to evaluate the safety and effectiveness of new drugs, medical devices, or treatments.
• Standard Operating Procedures (SOPs): Detailed, written instructions to achieve uniformity of the performance of a specific function, critical for quality control and regulatory compliance in manufacturing and clinical settings.
• Patent Expiration Windows: The limited period during which a pharmaceutical company holds exclusive rights to manufacture and sell a drug, making rapid commercialization essential.

Examples/Case Studies:

• Pharmaceutical Sales Reps: The example of a sales rep for Lily using an iPad with Veeva CRM to take notes and deliver interactive presentations in real-time, contrasting it with the inefficiencies of legacy client-server systems.
• Major Life Sciences Customers: Mention of Pfizer, Novartis, and Amgen as examples of Veeva's customer base.
• Manufacturing Plant Shutdowns: The critical impact of poor document management in manufacturing, where a lack of a robust application like Veeva Vault could lead to a plant being shut down.