eClinical specialist Datatrak International was trumpeting its first quarter-to-quarter increase in backlog since Q1 2008 as it reported another sharp fall in operating losses on a year-to-year basis.

The US-based company, which has spent the last few years mired in financial losses and restructuring programmes, reported operating losses of US$420,369 for the third quarter ended 30 September 2009, compared with a US$1.57 million loss in the same quarter last year. However, Datatrak’s gross margin for the latest quarter narrowed from 76% to 70%, while revenues fell by 34.3% to US$1.55 million.

In the second quarter of 2009, the company’s revenues declined by 18.6% year on year but Datatrak slashed its operating losses to US$36,181 from US$15.6 million in the second quarter of 2008, while its gross profit margin improved from 60% to 75%.

Nonetheless, the company saw its more promising backlog as of 30 September – US$8,891,000 compared with US$8,551,000 at 30 June 2009, US$9,699,000 at 31 March 2009 and US$11,400,000 at 31 December 2008 – as a sign of better things to come.

“We believe that the increase in backlog is a very good indicator that clinical trial sponsors are ready to move forward with projects which were on hold earlier this year,” said Datatrak chairman Laurence Birch.

“In addition, we think the introduction of our Datatrak One concept in August played a role in the increase in backlog as customers began to better understand our single platform solution compared to the patchwork technologies many of our competitors offer,” Birch commented. “We are now in the later stages of our stabilisation plan, which has put us in excellent position to capitalise on upcoming opportunities in the market.”

Datatrak reported net losses of US$423,856 or US$0.03 per diluted share against a net loss of US$1.60 million or US$0.12 per diluted share in the third quarter of 2008. The prior-year quarter included a US$835,000 charge related to the closure of the company’s German subsidiary, as well as associated office and equipment leases, and legal costs of around US$234,000 associated with litigation favourably concluded in December 2008.

“The results are markedly different than a year ago,” Birch pointed out. After adjusting for a US$505,000 severance charge, the nine-month net loss from operations “was only US$738,000 compared to a loss of US$5,949,000 in the first nine months of 2008 after adjusting for severance and impairment charges”, he said.