Good afternoon, ladies and gentlemen, and thank you for standing by, and welcome to today's acquisition of Medidata by the Dassault Systèmes conference call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, you will need to press star one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Wednesday, 12th of June, 2019. I would now like to hand the conference over to your speaker today, Mr. François-José Bordonado. Please go ahead, sir.
Thank you very much. Thank you for participating in this conference call. Earlier this morning, we announced the signing of a definitive merger agreement for Dassault Systèmes to acquire Medidata Solutions, Inc. On today's call are Bernard Charlès, our Vice Chairman and CEO, Pascal Daloz, our EVP, CFO, and corporate strategy officer. Joining us from Medidata are Tarek Sherif, Co-founder, Chairman, and CEO. Glen de Vries, Co-founder, President, and Director. Before we begin, let me remind you that some of the comments we'll make on this call will contain forward-looking statements, which could differ materially from actual results. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain, such as statements about the confirmation of the proposed merger and the anticipated benefits thereof.
These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. This material does not constitute a solicitation of proxy, an offer to purchase, or a solicitation of an offer to sell shares of Medidata's common stock. In connection with the proposed merger, Medidata will file a proxy statement with the United States Securities and Exchange Commission, the SEC. Medidata stockholders are strongly advised to read these documents and any other documents that Medidata will file with the SEC. They will contain important information that Medidata stockholders should consider before voting on the merger.
Please refer to the additional information and where to find it section of the press release announcing the signing of the definitive merger agreement for Dassault Systèmes to acquire Medidata Solutions, Inc. I would like now to turn the call over to Bernard Charlès.
Thank you, and welcome to this exceptional conference call. I would like to give a special welcome to Tarek and Glen from Medidata, who are here with us. Thank you for taking the overnight flight from New York for this special call. For many reasons, our announcement should come as no surprise, as it is in perfect alignment with our purpose. As the life sciences industry shifts its focus to personalized medicine and patient-centric experiences, we believe scientific innovation on industrial performance call for a unified new approach. This is exactly what we have been working towards with our investments in life sciences over the last years.
The acquisition of Medidata, with its clinical and commercial solutions, reinforces our position as a science-based company by providing the life science industry with an integrated business experience platform for an end-to-end approach to research on discovery, development, clinical testing, manufacturing, and commercialization of new therapies on health technologies. Importantly, Medidata's leadership in clinical trials complements our life science solutions on the 3DEXPERIENCE collaborative platform. Further, with its recent expansion into real-world evidence analytics, coupled with the power of modeling and simulation, we will be able to demonstrate together how the virtual world will analyze the next generation of patient inclusive therapeutics. We are now well-positioned to be the enabler of the life science industry transformation, elevating our company's purpose of harmonizing product, nature, and life.
Headquartered in New York, Medidata will become a new Dassault Systèmes brand and continue to be led by its co-founders and executive team. Since 2010, we have taken several major steps, expanding our capabilities and footprint in life science from our historical strengths and market leadership in medical device modeling and simulation. We initiated multiple research programs in life science, including our bio intelligence work focused on collaborative discovery and preclinical modeling and simulation on oncology with leading pharmaceutical companies and research institutes around the world.
In 2014, we created our BIOVIA brand, formed from the combination of our bio intelligence capabilities on the acquisition of Accelrys, a leading provider of software solutions for chemical materials and bioscience research for the pharmaceutical and biotechnology, consumer packaged goods, aerospace, energy, and chemical industries. During that same year, we also signed a five-year collaborative research agreement with the U.S. FDA, targeting the development of testing paradigms for the insertion, placement, and performance of pacemakers, pacemaker leads, on other cardiovascular devices used to treat heart disease in connection with our Living Heart Project. In 2018, we acquired COSMOlogic, bringing fluid phase computational chemistry software capabilities.
As a result, we collaborate with the world's top 20 biopharma companies, hundreds of biotechnology companies, medical device manufacturers, research institute, governmental regulatory agencies to develop and bring to market innovative health products and technologies using the power of virtual universe to transform the patient experience. Combining with Medidata is the next natural step. As we will discuss on this call, the company has a leading position in the clinical market and has introduced significant capabilities to address the commercial market. In turn, Medidata has produced a strong track record of client, revenue, and earnings growth since its initial public offering. Medidata fits perfectly in our Industry Solution Experiences, the full offer on categories of industry solutions. They are highly complementary, both to the solutions themselves as well as the BIOVIA brand.
Its customer base is also highly complementary to Dassault Systèmes on a combined basis, looking across pharmaceutical, biopharma, Contract Research Organizations, as well as medical device companies. We also see a significant opportunity with the strengths we can bring to Medidata over the midterm on a geographic basis, with a strong presence in Europe and Asia to extend its global reach. Following completion of this acquisition, life sciences will become our second largest industry after transportation and mobility. Finally, as we discussed on our first quarter earnings calls in April, as drugs and therapeutics shift to the world of biological drugs, meaning large molecules, representing an estimated 40% of the pharmaceutical R&D pipeline currently, the industry is moving to a world of personalized health, and the reshaping of the patient experience is also so key for the quality of the service.
As we think about the life science services, the life science industry and the broader ecosystem around healthcare, the opportunity for our company over the coming decades is significant. I look forward to welcoming, soon I hope, Medidata and all its workforce with incredible talents at Dassault Systèmes. We have been following closely its progress for a number of years and initiated discussion last year to develop a more formal relationship. As we discussed, our potential partnership, the discussion led both companies to this morning announcement. With that, let me now turn the call to Tarek Sherif. Medidata's Co-founder, Chairman, and CEO. Tarek, you have the floor.
Thank you, Bernard. I want to start by saying how thrilled I am about what is ahead for Medidata and our two companies. Together, I believe we will deliver tremendous value for our stakeholders and unlock opportunities for our customers and patients advancing life sciences in the age of precision medicine. It's great to be with you all today and to spend some time explaining the strategic rationale of this transaction to the investment community. For those of you who do not know us, Medidata is a global life sciences technology provider dedicated to improving the way trials are designed and conducted, and drugs are analyzed and commercialized. Our cloud-based platform of solutions, data analytics, and AI enables efficiency and improves quality throughout the clinical development programs by accelerating processes, enhancing decision-making, minimizing operational risk, reducing costs, and transforming trial strategies.
Medidata was founded nearly 20 years ago to the day by myself and our president, Glen de Vries. We IPO'ed on the Nasdaq Stock Market 10 years ago this month. Over the course of these two decades, a lot has changed, as evidenced by revenue growth of nearly 5 x as a public company. One critical aspect has not changed: our DNA. We are a mission-driven company, and everything we do ultimately powers smarter treatments and healthier people. This point aligns well with Dassault Systèmes. Both of our companies clearly value the importance of a purpose to center a company and give customers a clear sense of motivation. Today, our unified platform, pioneering analytics, and clinical technology expertise power the development and commercialization of new therapies.
The Medidata Clinical Cloud is a connective tissue between patients, physicians, regulators, payers, and life sciences companies themselves. Companies on our Medidata platform are individually and collaboratively reinventing the way research is done to create a smarter, more precise treatment. 13 of the top 15 drugs sold in 2018 were powered by our technology. At the time of our IPO, we had about 150 customers. Over the past decade, we have grown that number eight-fold. Today, we work with many of the world's largest pharmaceutical companies, biotech and medical device firms, academic medical centers, and CROs. This has translated into strong top-line growth of 18% on average and healthy profits with a non-GAAP operating income CAGR of 22% through our last fiscal year. We are pure SaaS, and our revenues comprise about 85% subscription, 15% professional services.
I think this progress is attributable to both our technology and our deep domain expertise, which reinforce strong customer relationships. Thanks to this trust we've built with our customers, we have consistently expanded customer relationships, helping to drive our good growth. We have 1,300 customers on our platform spanning multi-study enterprise agreements and single-study contracts. We have run more than 17,000 trials on our platform, reflective of the fact that we are the market leader in electronic data capture. Those 17,000 trials represent 4.9 million patients, 600,000 site sponsor relationships, and billions of data points, making us a strong partner with our customers in the advancement of innovation and improved patient outcomes.
We're headquartered in New York City, and we have 16 offices around the globe, spanning seven countries, including the U.K., Japan, Korea, China, Singapore, and Germany, with a workforce of about 2,800 people. In summary, I'm looking forward to this next evolution of Medidata as a part of Dassault Systèmes. This is a great move for our employees, for our customers, and for our shareholders. Patients will be the ultimate beneficiaries, and we'll continue to create shareholder value along the way. With that, I want to turn it over to Medidata's co-founder and president, Glen de Vries, to walk you through our product offerings in more detail. Go ahead, Glen.
Thanks, Tarek. First, I want to echo what Tarek said about the alignment of our two companies. I could not be more excited about what this transa ction is going to do for our clients, broadly for life sciences, and for those patients that we ultimately serve. Medidata is focused on two areas of the life cycle of a therapy, the clinical and the commercial. To set the stage for the challenges that we help life sciences companies address, let me just give you some statistics about the odds of developing a drug, and they're really stacked against a sponsor. The industry average success rate to get a new drug from phase I, the first clinical trial, to regulatory approval is below 10%. The average timeline from discovering a new drug to getting its regulatory approval is 10 years.
As a result, the average costs to develop a new drug are estimated at $2.5 billion . The cost of not being able to help patients is not even something we can measure. Finally, affecting life sciences companies, patients, and society in the long run is the fact that even after all of that, 50% of drug launches underperform expectations, and that places an even larger burden on the few drugs that do succeed. Nevertheless, there is incredible therapeutic innovation in the laboratories and the development pipelines of the life sciences industry, and investments in these new therapies are growing at a rapid clip.
Now let me explain to you what we do in the Medidata platform from a clinical trial planning and management perspective to commercial and real-world analytics, as well as a new family of products we have centered around artificial intelligence. First for clinical, we have the Rave family. It unifies all the capabilities our customers and our partners need to run a clinical trial end-to-end. Simply put, enter data once, and our platform masters it and populates it throughout the entire suite of Rave applications. By far the most comprehensive suite in the market, it spans across data capture, clinical data management, clinical operations, financial management, everything you need to optimize a trial at every step.
Last year, we also acquired SHYFT Analytics, a leading platform for commercial and real-world data analytics, with products that are specifically for the pharmaceutical, biotech, and medical device industry. The SHYFT platform is the most efficient and scalable way to transform massive amounts of complex healthcare data into on-demand clinical and commercial insights. Fueled by one of the largest regulatory-grade clinical data repositories in the entire world that's coming from the Rave platform, we launched Acorn AI at the beginning of this year. Acorn AI builds on the foundation of innovation and data science that we've been building for a decade at Medidata. Acorn accelerates digital transformation in life sciences in the age of precision medicine.
It is designed to provide actionable insight to the front lines of decision-making with data that is liquid beyond borders in an organization and goes beyond just integrated workflows to a truly intelligent platform for the entire life cycle of a therapy through R&D and commercialization. We're really well-positioned to grow in the near term, both on the clinical and commercial side, and in the long term, in the combination of our current electronic data capture market as well as with the broad clinical, commercial, and data platform. Again, on a personal note, I am just thrilled to be here. Looking forward to what our teams are going to accomplish together and the value that we are going to deliver to all of our stakeholders. With that, I will turn the call over to Pascal.
Thank you, Glen. Let's me begin by sharing with you how we are creating the first end-to-end scientific and business platform for the life science industry. We begin in research and discovery, where we have our Designed to Cure industry solutions focused on speeding time to innovation with a higher quality novel therapeutics. For preclinical development, we have our ONE Lab industry solution experience. Medidata then brings its significant capability in clinical testing, the largest area of investment for life sciences company, presenting a significant opportunity for innovations combining both Medidata's real world capabilities with our virtual world modeling and simulations capabilities. In manufacturing, we have two industry solution experiences to assist life sciences companies. Then in commercializations, Medidata brings critical assets. Our total addressable software market today is approximately $ 33 billion.
When you look by our three spheres, products, nature, and life, approximately $25 billion is in our target TAM in the product sphere, about $4 billion in nature, and about $4 billion in life science. The acquisition of Medidata would represent an important expansion of our addressable software market, adding an estimated $7 billion to about $40 billions in total. Turning to the transactions, we have signed a definitive agreement to acquire 100% of Medidata in all cash transactions in the amount of $5.8 billion. The transaction was approved by both boards of directors. The transaction is subject to receive regulatory approvals, the approvals of Medidata Solutions shareholders, and certain other customary closing conditions.
The transaction is expected to be completed during the fourth quarter, and we are, of course, well-positioned to close sooner if this estimated timeline shortens. In parallel with the signing of the definitive merger agreement, we have in place, sorry, a EUR 4 billion committed financing facility from a group of banks to fund the acquisition, in addition to using approximately EUR 1.3 billion of our cash. This financing facility of EUR 4 billion equivalent debt package with an expected strong investment grade rating is comprised of term loans in an amount of EUR 1 billion and a EUR 3 billion bridge to bond facility that we expect to refinance in the next few months is with lenders bond branches. Our objectives is to deleverage fairly and rapidly and to maintain our net debt to EBITDA ratio of around 1x across the investment cycle.
We estimate a net financial cost to fund this acquisition in an amount of EUR 18 million for one quarter of 2019, EUR 15 million for 2020, and decently progressively from there. This figure take into account the use of cash, of course, and estimated interest expenses, as well as all the financing costs. As Medidata is a public company, its reports and filing present detailed information, but let me share a few figures here. For its fiscal year ended December 31, 2018, Medidata's revenue totaled $636 million, with $536 millions of SaaS subscription software revenue and a services revenue of $100 million. Approximately 76% of its sales were in Americas, 14% in Europe, and 10% in Asia.
Medidata's non-GAAP operating margin was 23.4%, and its non-GAAP net income was about EUR 104 million. We will wait to give our specific guidance for Medidata's contribution to our year 2019 financial results at the time of our third quarter earnings. For now, let me point out that we are likely to take into account natural post-closing onboarding events that may have a temporary productivity impact. In addition, our guidance will take into account an estimate for the U.S. dollar to EUR exchange rate. Once consolidated, we may decide to expense certain Medidata R&D amounts that are currently capitalized, so the non-GAAP equivalent operating margin will be closer to about 16% in that case.
Looking to our long term based upon our analysis, Medidata is likely to represent a large portion of the $ 0.80 contributions we assume from the acquisitions and the marketplace activities as part of our 2023 EPS goal for EUR 6 per share. Let me now turn the call back to Bernard.
Thank you very much, Tarek, Glen, and Pascal. Before opening to questions, I would like to share some final important points, not just on today's announcement, but also on our global priorities Our company towards the industries on customers we serve. Our first priority continues building on our momentum with the 3DEXPERIENCE platform as a key enabler for industry renaissance in the industries we address. Our objective, as we have shared with you since our 2018 capital markets day, is to make 3DEXPERIENCE the large majority of our software business over the next four years. Second, we have invested heavily many billions of euros to support our core industries on our leadership in transportation and mobility, aerospace and defense, and industrial equipments, to name a few. We will continue to advance our innovation on behalf of these clients.
Our investment in biology, chemistry, material science clearly demonstrate the cross-industry benefits of our investment on expansion of our reach. Third, we believe 3DEXPERIENCE platform can be a critical enabler for innovation and transformation across all major industries, where the drive to provide new types of customer experiences, in this case, patient experiences and new business models, is emerging and accelerating. We see these possibilities across the three spheres addressed by our purpose, product, nature and life. Fourth, our investment in Medidata complements very well our brands, notably BIOVIA. Altogether, with all our brands, we now have an end-to-end set of industry solution experiences for the life sciences industry.
To conclude, we believe the combination of scientific modeling, simulation on the gigantic patrimony of worldwide clinical trials, knowledge and know-how that Medidata has been able to build over the years with its top ex-top expertise are a profound catalyst to accelerate developments in personalized health, patient-centric experiences on the next standard of medical practices. We share the values, as Tarek said, and also the vision. We are now happy to take your questions and are waiting for the day to do the final closing.
Ron, do we have questions, please?
Yes. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, you may press the hash key. Once again, star and one if you wish to ask a question. Our first question comes from the line of Jay Vleeschhouwer. Please ask your question.
Thank you, Bernard and Medidata and Pascal. Question for you, Bernard. Over the last 20 or more years when you've done an important acquisition, the essence of the IP that you were acquiring was readily identifiable for today's purposes. When you bought Accelrys five years ago, it was readily apparent what the IP was. With respect to Medidata, I apologize if this is a too simplistic question, is it technology per se that is motivating you here, or is it process and domain expertise? Additionally, you mentioned that it's complementary, but in what way, if any, might this acquisition be orthogonal? That is to say, it takes you in some new directions over and above it's being complementary.
I will give a short answer to Jay. I will give a shot on that, but I will let Glen and Tarek comment it. I'm sure we together will have a complete answer. In short, you know what? Today, when we do modeling and simulation for an airplane, we know this flight is going to go from A to B, and we certify. In life science, it's not the case. As a matter of fact, in life science, the clinical trial are so critical because the outcome of the clinical trial, from my understanding, is not only the approval to go to market. It's the extreme at the highest level possible, characterization of which patient could benefit under which condition with which therapeutics.
You know, data science has to be correlated to modeling and simulation. It will take years before we get the perfect model. What for me is unique in Medidata is first the talents, the incredible faith and passion of the team to have an impact for the sector, and the knowledge and know-how, which is the precious IP capitalized over the years. To make this possible one day. That's my motivation from this side. Tarek and Glen, you please step in.
I think that was very well sa id. If you look at the innovations that we were talking about that are going to be coming to patients, they are getting more precise, and that brings new challenges to the life sciences industry. You're developing that right therapy for the right patient at the right time. Inherently, if you're a life sciences company, means that your market for that therapy is actually shrinking. That has implications for the complexity of finding a patient, treating them, measuring the effect of that treatment, and whether it's in the commercial phase of the life cycle of your therapeutic or incredibly importantly, and in, I think, a outsized way during the development of that, it means that you have to get more evidence out of every time you connect with a patient.
Every time they encounter their doctor, every time a sensor measures something about them, we need to take that data and get more gearing out of it. That is why in the clinical trial and commercial parts of our business, we really feel like it's a combination, a fairly unique one we think we have at Medidata, and frankly, even more unique with the combination of what we have at Dassault Systèmes, is the ability to look at both the technology to connect all of these stakeholders who are generating that evidence, create the new kinds of processes that are going to go with this next generation of clinical development and personalized medical therapeutic delivery, and the data platform on which all of that needs to be managed.
I hope that makes it clear that at least from, I think, the perspectives of all of us in the room, this is really about technology, and process and a data ecosystem.
Just a quick follow-up. The data provided by Dassault this morning suggests that you have about 1/10 of the TAM. Could you talk about how your market share has evolved over the last number of years and, the competition comprising the other 90%, and what you have to do, now with DS to meaningfully grow beyond that 1/10 share?
Sure. It's Tarek Sherif. I'm happy to do that. When we began Medidata, we focused on one very specific area, which was electronic data capture. Over the 20-year history of the business, we have, I think, done a very good job of taking market share. Today, we run probably more than half of all electronic trials that are run globally. However, as Glen was pointing out earlier, the process of running clinical trials is very complex. There is a lot of process around it. There are a lot of steps involved. Over time, we evolved our platform to encompass a number of solutions that bring efficiencies to a vast majority of those process steps.
In terms of, in terms of the market share there, it's typically dealt with by either siloed systems or very sort of manual processes. Still using spreadsheets, still transferring files manually. What we bring in our platform is an integrated approach. In terms of the market share, while EDC, we have a very strong market position in. In terms of the opportunity for the broader platform, for the various solutions, there's an enormous opportunity. There's a lot of white space, and we feel like we have a very strategic position to capture that. I think we feel very strongly that we're just at the beginning of capturing that TAM and with our existing product and now also in concert with Dassault Systèmes, we'll be unearthing even more opportunities. I suspect that TAM will continue to expand.
Thank you very much.
Thank you, Jay. Next question.
Our next question comes from the line of Adam W ood. Please ask your question.
Hi. Thanks so much for taking the question, and congratulations to everyone on the transaction. Maybe first of all, specifically on Medidata and the growth and competitive landscape, could you maybe just help us a little bit on the organic growth that you've seen over the last few years? Is that sort of mid-high teens growth rate, you know, fairly representative of the organic growth, adjusting for M&A and also any lengthening of subscription contracts that you've seen? Could you talk a little bit about, I think Veeva's moved more into your market, how you see the competitive landscape, and whether you see any of the other maybe larger technology companies, the Microsofts and so on, looking at the space.
Secondly, when we think about the integration of the products and the platforms, would it be fair to say that your aim is to bring Medidata onto 3DEXPERIENCE platform, or will they be kept more separate than that? How long do you think it will take to be able to bring this integrated platform to market to the customers? Thank you.
I'm sure, Tarek, you want to address that question.
Absolutely. Happy to.
Thank you, Adam.
I will certainly take the first half. I suspect Glen may want to join in for the second half. In terms of our growth, we've shown very consistent growth over a long period of time. Yes, you're correct. It is in the mid to high teens, and we feel very confident that our business, given the opportunities that we see out there and the customer relationships that we have, as well as some of the new areas that we've entered into, we see that growth continuing. As I said, it's been probably since we've been a public company, we've shown very consistent growth.
Given the market dynamics and our ability to execute, I feel very good about that. In terms of the competitive landscape, it is interesting, it certainly keeps evolving. One of the things that we like to say is that if you don't have competition, it's probably not a market worth being in. But I also would say that if you look at the offering that we have, the sort of the breadth of the platform that we have, as well as the kind of customer relationships we've built over several decades, our customer retention rates have been consistently above 99% over the past, since we've been a public company, basically.
I think while we take competition seriously wherever it comes from, I think we're unmatched in the industry in terms of capability, domain expertise, and the data assets that are special to Medidata, given the relationships that we have with our customers and us being a strategic infrastructure provider to them in clinical trials, puts us in a position to provide value to customers in a way that's, I think, that's very unique for Medidata.
We, we are in this room having just signed a definitive purchase agreement, so I'm not prepared to tell you timelines for getting onto the 3DEXPERIENCE platform. What I can tell you is the philosophy behind the 3DEXPERIENCE platform and the way we've built the Medidata platform to date is incredibly well-matched. If you think of the problem that we're trying to solve in two dimensions, you go down from the DNA of an individual patient all the way through their physiology and behavior and the environment they live in, and imagine that's the Y-axis.
On the X-axis, you have not just that patient, but all of the stakeholders who are necessary to generate that evidence that I was talking about to connect the right patient with the right therapy at the right time, as Bernard Charlès was talking about. I'm sure to many of the people on the call who are familiar with Dassault Systèmes, I don't need to describe the compass related to the 3DEXPERIENCE and all the philosophies that are embedded in it. That is how we think about the Medidata platform. Yes, the answer is Medidata's products will be integrated into 3DEXPERIENCE platform.
Not only will that be great for our clients in the existing things that they're using, that is how we will bring the research expertise, the industrialization capabilities that are on the broader Dassault Systèmes platform into both the clinical and commercial areas that we work in, as well as to broader parts of future of medicine and life sciences.
Absolutely. Just to add one thing, I would be surprised if a Salesforce-based platform can fix the kind of research development production on test. It has never happened in other industries. I don't think it will happen in this one. You know, at the beginning of digitalization of every industry, every industry have started to manage documents. At some point in time, the documents disappear on the experience on modeling and simulation become the master model. We have seen that in all other industries. I believe it will happen in the life science.
Excellent. Thank you very much.
Thank you. Our next question comes from the line of Stacy Pollard. Please ask your question.
Hi, thank you. Just can you maybe talk about your accretion dilution expectations, and would you expect to get the margins of Medidata up to Dassault's group level within three to four years? Also, you haven't mentioned per se anything, but do you see any synergies with your other life science solutions, either revenue synergies or cost synergies? Finally, do you believe you still have potential or enough scope to continue with acquisitions in other areas, either life sciences or perhaps construction or simulation, et cetera?
Okay. Stacy, for all the questions you ask, I will give details at some point of time. Because it's a little bit early to share the guidance. What I could say, first, this transaction will be accretive at the EPS level. Okay. For all the years, point number one. Point number two, from a synergy standpoint, yes, definitively, this is at least the rationale behind the transactions. Do we have multiples? On one hand, you know, it's a SaaS solutions. The company is using extensively Amazon, and I think there is a lot of interest to use our own cloud infrastructure. That's one of the lever. As Glen explained, you know, there is a lot of value to have a common platform. This is a synergy at the development side.
I could also go through the go-to markets to explain that we have a bunch of synergy relatively well-identified, and I will quantify them at the right times. On the revenue side, yes, we also have synergy because the way Medidata is approaching their customers is, you know, it's by studies. The way we approach them is by the infrastructure, the core infrastructure, you know, to structure the entire transformation of the companies. I think we need both. You need to be able to enter by pieces, and you need to be able to enter with the end-to-end solutions. If I combine all those kind of things, I'm pretty confident that this revenue and this activities combining BIOVIA and Medidata will grow very fast. You know, it's already with the combinations, the second-largest industry for us.
In the race to become the number one, I think they are well-positioned. Because if you look at the spending, if you look at the GDP, life science and healthcare is by far the largest. In terms of scope, do we have enough to continue to do some acquisition? The answer is yes. If you do the math, I told you that, we are going to use EUR 1.3 billion in cash, of our cash to fund these acquisitions. Meaning we still have EUR 1.6 billion in our pocket. With EUR 900 million cash flow generations per year, not taking into account the contribution of Medidata, I think we have some lever to continue to do some transactions to complement nicely what we have.
That's great. Thanks.
Thank you, Stacy.
Thank you. Our next question comes from the line of John King.
Yeah, thanks for taking the questions. Just one really. I was interested in maybe the response from both management teams, though. Just on the timing of the deal, why now? Obviously, for the Dassault team, I don't think you've gone into net debt before. Obviously, it speaks to the enthusiasm for which you have, you know, you hold this opportunity in. You know, be interested in why you think this deal is happening now. Also for Medidata, sounds like you're very confident of your own organic prospects. I'm just wondering, what is it that you see out there, that makes you want to do this deal now? Perhaps again, that would speak to the synergy potential you see with Accelrys. Yeah, I'd be interested in your thoughts.
First of all acquisitions we have done in the past have been well thought years in advance. It does not mean that because it's on paper, it will happen. B asically for all of them, it's the case even, you know, in the case of Medidata, we value at first, we want to make sure we understand the industry we want to serve. We have learned a lot in the last, as I tried to say it at the begi nning of this call, in the last 10 years with the research we have done and the relationship we have established with the Amgen of the world and with many other clients that we have.
Observing where they are versus where we are with the most advanced digitally enabled companies, which are also gigantic groups, with gigantic revenue. Toyota is EUR 250 billion revenue, just revenue. We know where they are, and we can compare. We were astonished with the low level of digitization of the sector. That's one piece. The why now is we observe that. The second is building relationship. This is about people. This is about trust to build the future. When we started a year ago to exchange, we were having in mind a partnership because we thought it was very complementary.
What happened is that we discovered that we shared more and more, and we wanted to do more and more together to a point where one of us ask, you know, "Why should we not come together?" This is why we are here today. There is a matured progression in formulating not the sum of what we have only, but where we can go. There is one unique characteri stic in what Dassault Systèmes has done across all industries. We have always been game changer. We have never done me too. Never. We always change the game. It's harder, but it's more fun. I believe that is the time to do it in life science. That's my view from why we are together. It's the wedding day or Tarek.
I have to echo what Bernard was saying. I think, I couldn't agree more with everything that you've said. I think from Medidata's perspective, we've always been a mission-driven company. It's what gives us our passion. It's deeply ingrained in our culture. As a mission-driven company, we have also had a massive impact on our industry. We align, we partner with our customers. We've developed, I think, a unique technology, even unique business model in our industry. After we began to get to know the team here, we simply saw that it, you know, there was so much potential in an industry that I think is going through major disruption, that the time felt like now.
When we started to think about, you know, alignment, there's a cultural alignment. There's a mission and vision-driven company. There's a passion around it. There's industry readiness. I think what was so attractive to us is that Dassault Systèmes brings a lot of experience in other industries that have gone through the same kind of transitions that our industry is going to go through. They bring maturity and scale, and they bring capabilities that really completed the full circle that we saw was necessary to make precision medicine a reality in our lifetime. The timing seemed perfect to us.
Thank you.
Thank you. Our next question comes from the line of Glen Santangelo. Please ask your question.
Yeah, thanks, Tarek. I just follow up on the comments that you just made. I mean, essentially, I understand, you know, a little bit about DS and their 3DEXPERIENCE and some of the life science solutions that they have. You just specifically said that they bring certain capabilities to Medidata. What I'm really wondering, if you could elaborate a little bit on the complementary nature of these two companies and what Medidata might be able to do under Dassault's ownership versus remaining an independent company. I just want to make sure I understand what the incremental value proposition's going to be in Medidata's legacy market. Secondarily, I was wondering, could you just comment, is there a breakup fee and are there specific roles for you and Glen in the new combined company?
Are you guys, are you under contract? Are there any earn-outs? Anything of that nature would be helpful. Thanks.
Thanks, Glen. Actually, Glen, let me start, and then I'll hand it over to Tarek. If you look at what we've been doing, which obviously you're deeply familiar with, there are complexities beyond just the kind of clinical trial processes that we've been addressing to date around things like managing, frankly, a supply chain, the chain of custody of things in a clinical trial. As we see more of these cell therapies, other personalized therapies, not just life sciences, medicine is going to be struggling with processes that they just don't know how to scale. Things around getting a sample from a patient through a manufacturing process, a complex biologic style manufacturing process, which our colleagues to be at Dassault Systèmes are very good at managing, that then it needs to get back to that same patient.
There's things that actually are just part of what is that future state of blocking and tackling and running at scale, the kind of development to bring the innovations that I was talking about in people's pipelines to market. Beyond that, if you look at the capabilities around looking at research data, some of the things in the BIOVIA brand, there are ways that we can, should, and I think frankly, need to, as the life sciences industry, look at a much more sophisticated level at that interaction of drugs and devices at a deeper physiological and molecular level, to figure out exactly how to optimize getting therapeutic value out of every single dollar invested in people's R&D pipelines.
That is just as much a part and parcel of getting that gearing out, of getting that evidence gearing out of the data that's collected as just running a better clinical trial. I just think those are two very practical examples where, as we've talked about in the past, connecting some of the loops, making closed loop feedback systems in the world of clinical and parts of commercial that we've done at Medidata, while actually synergistically with Dassault Systèmes, we can start to think about those feedback loops across discovery, research, development, commercialization, industrialization, delivery of those therapies in the marketplace in ways that we really couldn't even conceive of before we started talking about this combination. Hopefully that gives you some very practical examples as well as philosophically how we've thought about it.
I'm happy to take the second half of the question. Glen and I, you know, we've always been driven by the mission that we set out 20 years ago. We are 100% committed to making this successful. We are definitely staying on. We will be running Medidata as a wholly owned subsidiary, reporting into the senior management here at Dassault Systèmes, but we have no plans to go anywhere. As it relates to the other questions you asked, we'll have a regulatory filing in a couple of weeks that'll answer all those questions. I'll say is that it's not financial incentives that bring us here. It's our desire to change the world, and I think together we can do that. We're in here for the long term.
Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Michael Briest . Please ask your question.
Yes, thank you. My congratulations as well. Tarek and Glen
Thank you.
I noticed that, I mean, you have a lot of customers, 1,300, which suggests an average selling price or an average relationship of about half a million a year, but 20% comes from the top five. It's a very sort of weird shape of customer. Can you talk about why some customers are spending tens of millions with you and some others are presumably spending very little, and what the potential to raise those amounts would be? Then, Pascal, I guess one for you on cash flow. The business made EUR 77 million free cash flow in 2017, EUR 49 million last year, and it's guiding for over EUR 40 million this year. I'm just curious why it's going down and what will happen to the shape of that.
I mean, if you're paying EUR 55 million of interest next year, will this thing generate enough cash to cover that in 2020? Thank you.
Happy to take the first question. I think when you think about our industry, first of all, there is to the second part of what you asked in that there is an enormous opportunity to have our customers adopt more of the solutions that we have currently in the marketplace. The broader platform is not fully adopted by our customers, even by our largest customers. Now, with the offerings that we've brought forth with Acorn AI and the SHYFT offerings, there's even more opportunity to increase the average selling price to our customers. You have to remember, in the pharma industry and biotech, the top 100, 150 customers are fairly large in size, and then you have a lot of smaller biotechnology companies that tend to run fewer clinical trials.
When you look at the average ASP, I think that's a very healthy one. You do get sort of this bimodal view of, or skewing in revenue. I think the most important thing is that there's a lot of white space for us to continue to drive adoption and drive higher revenue and higher ASP.
Michael, related to the cash flow, I will do the same answer that I did for Stacy. Again, wait a little bit, I will come with the details at the right time, but I can assure you that we have identified the lever to accelerate the cash flow generations coming from these activities. You can count on me.
Okay. Thank you.
Thank you. Our next question comes from the line of Jason Celino. Please ask your question.
Hey, guys. Thanks for taking my question. Can you hear me all right?
Yes, we can. Thank you.
You know, I know it's still early, but what's some of the potential feedback you anticipate hearing from some of your customers, especially maybe some of the customers, you know, that are using both of your company's products?
I think we can both speak. I got personally outstanding feedback from a few of them already because they understand that the future is a platform based end-to-end. We'll have the opportunity to discuss with more of them, but it's very positive from Tarek and Glen.
It's basic. It's the same. It's customers who brought us together in the first place who introduced us. And I think they view this as Bernard said, as something that is very value creating for the industry in the long term.
Yeah.
Great. That's helpful. Thank you.
It's positive. Yeah, very positive.
Thank you. Our next question comes from the line of Neil Steer. . Please ask your question.
Hi. Thanks very much. My question just relates to something Bernard said, first of all on the call and in response to a question just a moment ago, the fact that Medidata is going to be run separately or autonomously and separately. I'm just wondering how that figures with achieving some of the synergies. Surely, given everything that you've said in the presentation, you would want to make this as quickly as possible part of the BIOVIA brand and run with that as soon as possible. I'm just intrigued as to why the insistence that it's going to be separately run.
Or it can be the other way around. Simply said to address your question. You know, for me it's very simple. This is an entire sector by itself, which is with an index of adoption of digital, which is where space and aerospace was 25 years ago. It's driven by data because there is weak capabilities for modeling on simulation. One day they will come together. It's the reality today. It's driven by the power of data. This is Medidata is doing that extremely well. In some way and without, you know, going too much in the organization, Pascal and I, we agreed and with Tarek and Glen that this should be run on reporting directly to Pascal.
Everything that is needed to make that business expand for the platform on end-to-end is in Tarek and Glen's mission. Of course we need to prepare this well. You know, for me, putting a powerful collaborative innovation platform driven by the data approach is very different than doing document management. I believe that the current players can be marginalized just with that effect when customers will have realized how deep it can go. Again, it happened in other industries before, so I don't see why it will not happen here.
Okay. Thank you. Just another sort of unrelated question. In reference to the fact that Medidata addresses sort of the 10% of the EUR 7 billion market opportunity at the moment, who would be the names of the sort of three or four next players that address the remaining 90% that you currently don't cover?
Oracle is a relatively large player. The way I look at that, Tim, however, is not that there are other software players that are covering that. It's a lot of process work. It's a lot of manual work. If you look at the penetration rates for technology, cloud technology into pharma, it's certainly in the U.S., it's among the lowest, only second above the U.S. government. I think there's a lot of room for modern technology to be adopted and replace the existing processes and homegrown systems, et cetera.
Okay. Thanks very much, indeed. Thank you.
We'll take one last question.
Yes, and our next question comes from the line of Laurent Daure . Please ask your question.
Yes, thank you. Good afternoon, gentlemen. I have three quick questions. The first is probably for Pascal. When you talk about accretive in EPS impact, I know it's very early. I don't want you to give us margin guidance, but I think you probably already know the assumption you took for the tax rate of Medidata that would be useful, and then we make our own assumptions. The second question is when you give us a breakdown of revenue, is it possible to have a rough overview of the contribution of the three different product line that Medidata has? My final question is back to the competitive landscape. I'm not too familiar with the healthcare industry, but I was wondering, the company, Veeva, is it competing directly with you? What would be differentiate them with you? Thank you.
Can I start with the last one?
Yeah, please.
I knew this. Cannot resist. I think many of the players are doing what happened 20 years ago in PDM for manufacturing, document management. The world is not going to stay on document. The full integration is going to happen. I think it's visible already. You know, like in any technology providing platforms for the market, the shift is not only capabilities, is changing the paradigm to do the job. Multi-discipline, multi-scale collaboration is now number one priority when we talk with Amgen common customers, when we talk with other common customers, they say multi-scale, multi-discipline, collaborative work for all functions end-to-end through the life cycle. I have not heard any document management companies being able to do that. That's what we want to do together to be simple.
That was the answer to the last point. Our targets is very clear, is game changer for the industry. On the previous questions, I think, Pascal, you want to.
There is one-
You want to say nothing, I think.
No, no. There is one related to the split of revenue between the different product line. I don't know if you want to say a few words, Tarek.
I'm happy to. What we've historically talked about is sort of our core revenue, which is around Rave EDC, and in comparison to the broader platform or other solutions, including our analytics. You can think of it as about a two-thirds, one-third breakdown, with two-thirds still coming from core EDC and about a third coming from the rest of our solutions. Obviously, the rest of our solutions are growing faster, and over time, we'll see that split become 50/50 and more.
Related to your first question, I think I already gave the answer when I was telling you that Medidata will represent a large portion of the $ 0.80 contribution we were assuming coming from the acquisitions on our long-term plans going to EUR 6. I think you have the answer.
In fact, [crosstalk] I have two gaps. I'm missing the margin and the tax rate.
We'll come back to this. Thank you very much, all of you, for participating and for your interest. As you can imagine, it's a special mome nt because this is a definitive commitment to really make sure we do something unique and so necessary for this, you know, this huge market of healthcare discovery and new therapeutics. It goes very well with the biotech approach, the connection with how you produce things and the targeting of personalized health. We, we have a plan together, and that's the one we want to execute. Thank you very much, and talk to you soon.
Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.