The company’s CEO Bob Weiler took a bullish stance on the operating environment, saying that the revenue growth was evidence that demand for its products is still strong despite “publicized cost saving efforts undertaken by several pharmaceutical companies.”
Operating income came in at a little over $7m which was above Phase Forward’s guidance and a rise of 37 per cent year-on-year.
Weiler said that in the quarter Phase Forward “signed new customers, expanded and extended our relationships for some of the largest global pharmaceutical companies and solidified a strong market position with CROs.”
The company sees its relationship with CROs such as Quintiles, ICON and Parexel as a key foundation for growth, and noted that sales to these companies rose 43 per cent to account for a fifth of total revenues.
New pharmaceutical customers signed up during the quarter include BioMarin and Vertex Pharmaceuticals, as well as two other unnamed top 15 drugmakers which are now using Phase Forward’s InForm ASP (Application Service Provider) electronic data capture (EDC) product.
Another highlight of the quarter for Phase Forward was a multiyear extension agreement with Eli Lilly. Since 2001, Lilly has used InForm in over 200 trials and plans to continue to use the product for global trials across all phases as well as mandating the use of the InForm produce with this global service partners.
Critically, Phase Forward’s customer base has a relatively low proportion of smaller biotech companies that are delaying projects because it is harder to secure funding. Small biotechs account for less than 10 per cent of the firm’s business, according to chief financial officer Rodger Weismann.
Meanwhile, on the CRO front, Kendle, Advanced Clinical Research, and BrainsGate also took InForm ASP licenses during the third quarter.
The results also exclude the revenue and backlog effects of Phase Forward’s $40m acquisition of interactive-response technology company Clarix, which closed during September.
“We believe that customers are increasingly looking for integrated clinical trial solutions and EDC IRT integration is at the top of the customer's wish list,” said Weiler, adding that this will help enhance Phase Forward’s growth potential in the coming years.
The company is now predicting that full-year 2008 revenues will be between $168-$169m a rise of 25 per cent or more over 2007.
“The pipeline for Phase II and III trials – which is the sweet spot for us – is as strong as ever,” concluded Weiler.