Fundsmith Equity Fund highlighted Veeva Systems as a picks-and-shovels investment in drug development in its second-quarter 2026 investor letter. The fund noted that Veeva provides specialized cloud-based software for the pharmaceutical and life sciences industries, tracking the entire drug lifecycle from clinical trials through manufacturing and sales. Veeva holds roughly 80% market share in pharmaceutical customer relationship software, and its competitive moat is built on extremely high switching costs, as replacing the software risks halting clinical trials or drug manufacturing. Growth is fueled by upselling new modules to existing clients and using AI agents to manage administrative work in drug trials. The fund reported that Veeva's return on invested capital, excluding a large cash balance, is well in excess of 100%, with a free cash flow yield of 5.7%.
Veeva Systems Inc Class AFundsmith highlights Veeva's dominant market share and growth from upselling modules and AI agents, indicating strong product demand.