Startups are raising tens of millions to make clinical trials virtual. But experts say we're still years away.

• The pandemic's telehealth boost has spurred investments in startups making clinical trials virtual.
• The goal is to open trials for experimental medicines to people who can't trek to a medical center.
• These companies and experts agree it'll be years before decentralized clinical trials are the norm.

Companies selling technology aiming to bring clinical trials online have raised more than $150 million in the past few months, but even they agree we're years away from widespread virtual clinical trials.

Riding on the pandemic's rapid transition to virtual care, startups like Thread, Florence, Hawthorne Effect, and Castor are hawking tech they hope will decentralize clinical trials for vaccines, drugs, and treatments that have traditionally been concentrated near large academic medical centers in metropolitan areas. In a bid to open trials up to people who can't afford the trek, they offer services that vary from software to collates data from disparate sources to gig-economy clinicians who can go directly into homes to gather samples.

Their teams and investors have pitched the technology as a means for diversifying clinical trials, which have historically underrepresented racial minorities. But these companies tell Insider that the technology required for widespread virtual clinical trials, including standards for gathering data from disparate data sources, is far from established.

The rush to develop vaccines and treatments for COVID-19 spotlighted the issue, prompting the Food and Drug Administration to recommend researchers enroll underrepresented groups in their trials.

But "nobody in the industry has arrived," said John Reites, CEO of clinical-trial data company Thread. Lack of standards in the way the data is stored and reported makes it harder to link new sites up to clinical trials, Reites said.

Thread, which raised $50 million from private-equity backers in August, sells a software platform that pharmaceutical companies and academic research centers use to gather data that's collected from sites across the country, whether they're retail pharmacies or commercial labs like Labcorp.

Where the tech falls short

Companies are raising millions to disrupt how clinical trials are conducted at a time when others are working at the beginning of the process to recruit underrepresented patients using sophisticated advertising. There, too, equity experts agree that technology alone won't address the social barriers keeping underserved patients out of clinical trials.

The software company Florence recruits patients, obtains their consent virtually, and aims to make the enrollment process easier. The startup worked with Pfizer to gather data from patients across the country about COVID-19 vaccine response.

But Blake Adams, Florence's marketing vice president, told Insider that the lack of data sharing even among the companies managing different parts of clinical trials makes it harder to expand them virtually.

"There's not really a lot of standards in the space right now," he said. Florence raised $80 million in a Series C round in May.

Jodi Akin, who founded Hawthorne Effect, agreed that these types of services alone won't address larger systemic barriers keeping underserved patients out of clinical trials. Hawthorne Effect, which raised $20 million in June, hires thousands of clinicians on a contract basis modeled after the gig economy to gather specimens directly from patients' homes.

And though backers are eager to fund decentralized clinical-trial technology because of its potential to diversify research, some startups and investors are overhyping its ability to meaningfully change it in the short term, Akin said.