eClinical big players struggle

By Emilie Reymond

- Last updated on GMT

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etrials and Clinphone, two big players in the eclinical industry
are struggling to keep their heads above water as both companies'
recent woes have impacted their bottom line.

The latest to announce bad new is etrials, which has fallen deeper into the red in the second quarter of the year after the company's CEO resigned in May. The North Carolina-based firm saw its operating loss climb to $1.5m (€1.1m), over eight times more than the $185,000 loss in the same quarter of 2006. The loss in the period was negatively impacted by around $800,000 in expenses related to the departure of former CEO John Cline and the appointment of Chip Jennings. etrials, which provides software and services for clinical trials, said Cline left to pursue "other entrepreneurial endeavours". His successor seems to be confident he can turn things around in his new position, despite the current difficulties faced by the firm. "etrials claimed an early lead in the eClinical space with its three integrated products and flexible solutions but has, since the end of 2005, failed to keep pace with the industry's rapid growth - ceding leadership and market share in all segments in which it competes,"​ said Jennings. "To capitalise on our assets and re-assert our position in a nascent market that still offers abundant growth opportunities, we are formulating a fresh go-to-market strategy and implementing the necessary structure to jump start the revenue growth engine, drive market share gains and put the company on track to achieve high levels of sustainable profitability." ​ But etrials is not the only eclinical firm facing difficulties of late. UK-based firm ClinPhone recently announced that its profits for the financial year ending 28 February 2008 "are likely to be significantly below market expectations"​ as a result of issues it encountered in the past couple of months. Due to a number of disruptions caused by various third-party telecoms suppliers, as well as internal data processing issues, ClinPhone suffered operational difficulties in June and July which have impacted the company's Randomisation and Trial Supply Management services to some customers, the firm said in a statement last month. Clinphone said its emergency and disaster recovery procedures were able to "ensure service was maintained", albeit at a lower level of capacity. It also stressed that those issues were external and out of its control. "All of these issues have now been rectified and should not reoccur but the quality of service that the company was able to provide to customers during the period was affected. This has led to a reduction in the forward order book, with a consequent impact on expected profitability in the current year,"​ said Clinphone. Clinphone said the electronic data capture (EDC) market - the area in which the company specialises - is now moving toward a service model which recognises revenue over the duration of a clinical trial. "The switch from a licence to a more services-based revenue model means that revenue is recognised over a longer period of time and will provide a recurring future revenue stream for the company."

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