Phase Forward tops expectations in Q4
Encouragingly for Phase Forward the fourth quarter also saw some major new clients coming on board – including four of the top 10 pharma companies – with multimillion dollar contracts.
“The results were better than expected and represented a strong finish to a highly successful year,” said CEO Bob Weiler on a conference call. Weiler also said that interactive voice response technology unit Clarix, acquired for $40m last year, also did better than hoped in its first full quarter as a Phase Forward division.
The firm, which claims to have the largest share of the market in the EDC area, was also says that its strategy of partnering with contract research organisations (CROs) as Quintiles, ICON and Parexel is paying off, with this type of company contributing 40 per cent of its revenue growth.
That said, a number of CROs have been reported signs of softening demand for their services in the fourth quarter as the economic downturn started to bite, with pharma companies delaying or cancelling projects amid cost-saving exercises.
Phase Forward has less exposure to early-stage clinical trials, a sector which seems to be suffering from the downturn a little more than later-stage clinical studies.
And Weiler believes company’s longevity in the eClinical marketplace is providing it with some protection from the financial fallout.
“We believe customers are increasingly focusing on the financial strength of their critical suppliers,” he said. “Improving the automation of clinical trial management processes has become an established way for life science companies to improve productivity.”
“Customers are looking for us to provide more comprehensive solutions to help improve their processes and their productivity to reduce costs.”
One example of a customer that boosted its collaboration with Phase Forward in the fourth quarter is Danish drugmaker Novo Nordisk.
Novo signed a multi-year contract to extend and expand the use of InForm that will see it use InForm as its default EDC system across all clinical trial phases from Phase I through Phase IV. The other top 10 pharma companies signing new contracts in the fourth quarter included GlaxoSmithKline and Sanofi Pasteur.
“At year-end, we had approximately 920 live production trials running in our hosting facility, from 770 at the end of 2007,” said Weiler.
For the full year, Phase Forward reported operating income of $16m on revenues of $170m, and said it expects revenues to reach $200m-$205m for 2009. Operating income this year is tipped to reach $31m-$34m.
