Phase Forward's income drops in Q2

27-Jul-2009 - Last updated on 28-Jul-2009 at 10:32 GMT

Phase Forward’s GAAP net income fell by 41 per cent in Q2 despite an increase in revenues, as rising operating costs hit the company.

The eClinical business’ net income slipped to $2.2m (€1.5m), compared with $3.7m the previous year, primarily because of a leap in operating costs.

Phase Forward’s costs rose by 46 per cent to $27.4m, taking total operating expenses for the year over $50m. Generally accepted accounting practice (GAAP) operating income for the quarter was $4.2m, down 26 per cent on the previous year.

Despite these difficulties Phase Forward believes the results were better than expected, with the company buoyed by revenues that rose by 29 per cent to $52.5m.

Bob Weiler, Phase Forward’s CEO, viewed this as evidence that the business is equipped to meet clients’ demands.

He commented: “Customers are increasingly looking for a broader, end-to-end, integrated clinical research suite (ICRS) from a single, trusted vendor. We believe that Phase Forward has the broadest and deepest ICRS offering in the market place.”

In addition, Phase Forward has renewed and extended contracts with existing clients and continued to push its InForm electronic data capture (EDC) software.

GlaxoSmithKline (GSK) and INC Research have both recently signed deals to use InForm, joing a number of other pharma companies and contract research organisations (CRO) that use the software.

Phase Forward’s share price rose slightly by the end of trading yesterday, having dipped earlier in the day.

Maaguzi acquisition

Phase Forward has acquired Maaguzi, a provider of web-based electronic patient reported outcomes (ePRO), for $11m. The purchase extends the company’s ICRS and moves it into the ePRO market, which it views as being increasingly important.

Maaguzi also markets Outcome Logix. This can be used for late-phase, observational studies and collates investigator-collected data and patient-reported data into a single web-based system.

Phase Forward also acquired Covance’s interactive voice and web response services earlier this month.