etrials sees losses escalate; names new CEO
etrials, which makes software for electronic data capture and interactive voice response technologies, posted an operating loss of $6.1m – four times the year-earlier figure - on net service revenues of $3.7m for the quarter, which outgoing CEO Chuck Piccirillo described as “disappointing.”
Revenues fell 9 per cent year-on-year, but Piccirillo said that the main reason was that a number of studies scheduled to start in the quarter have been delayed until the fourth quarter or 2009.
etrials was able to cut back on expenditures, with operating costs down 20 per cent compared to the second quarter to $4.9m, partly on the back of a reduced headcount, with further cost-cutting due to kick in during the fourth quarter.
“We made significant progress in reining in expense ... however, end of quarter backlog was lighter than we would have liked," said Piccirillo. The company ended the quarter with a backlog (defined by etrials as contracts that have been booked to start in the next four to six months) of $21m, down from $22m at the end of the second quarter.
Overall, 14 new contracts were added during the quarter, of which 11 were with existing clients; and three were with new customers. The company had 37 active clients and 139 active projects at the end of September. Four trials were cancelled, slicing $1.3m off the backlog.
A new release of etrials’ Trial Intelligence EDC package was recently introduced and adds “new functionality, especially when applied to oncology and cardiology clinical trials,” said Piccirillo on a conference call. The firm has also updated its IVR technology – Site Intelligence – so that it integrates more closely with the EDC suite.
“We are keeping our eye on the goal of positioning etrials for sustained profitability in 2009,” concluded Piccirillo.
etrials is also looking to external opportunities and has hired financial advisor firm Emerging Growth to seek out possible mergers or acquisitions. The eClinical space is undergoing a period of consolidation as companies strive to expand their technology portfolios to win lucrative top-level deals with drugmakers and CROs. Recent examples include Parexel buying Clinphone and Phase Forward snapping up Clarix.
Connaghan takes the helm
The day after releasing the third quarter results, Piccirillo was replaced by new president and CEO, Denis Connaghan and resumed his position as vice president of technology. Piccirillo has served as interim CEO since the resignation of Chip Jennings in July of this year.