Phase Forward, the US specialist in integrated data management for clinical trials and drug safety tracking, has broadened its offering in the fast-growing Phase I segment by acquiring privately held Green Mountain Logic (GML) in an all-cash transaction valued at $5.25 million.
Founded in 1998 and based in Vermont, US, GML sells process automation software for managing Phase I clinical trials. The company’s main product is LabPas CT, which facilitates real-time data capture (vital signs, adverse events, etc) and sample management during Phase I studies by, for example, matching barcodes on subject wristbands with the relevant laboratory samples to ensure data integrity. The system also includes workflow automation capabilities to help sites prepare for a clinical study and to streamline clinical and laboratory processes once the trial is underway.
Phase Forward plans to integrate the acquired technology with its own eClinical Suite, with the aim of improving the efficiency and effectiveness of Phase I trials while cutting the time to data lock. “Green Mountain Logic’s LabPas CT brings important functionality to the Phase Forward product portfolio, enabling us to offer a broader and more extensive solution for Phase I clinical trials,” commented Bob Weiler, president and chief executive officer. Not only were Phase I studies an important growth area for the company’s products but they had additional strategic value in establishing a relationship with customers at the earliest possible stage of the development cycle, he pointed out.
According to data published last year by Goldman Sachs, US research and development expenditure on Phase I trials was $5.2 billion in 2005, rising to $5.8 billion in 2006 and projected to reach $8.9 billion in 2010. The growth is particularly marked in the electronic data capture (EDC) sector, Phase Forward added. An April 2007 report from market research firm Health Industry Insights forecast the US Phase I market for EDC at $45 million in 2007, climbing to $120 million in 2010.
GML is already working with several leading contract research organisations (CROs) and Phase Forward’s existing relationships with more than 50 CROs will provide GML with further opportunities for expansion in this area, its new owner noted.
No impact to guidance
The acquisition is not expected to have any material impact on Phase Forward’s previously issued revenue guidance for 2007. It should boost revenues for fiscal 2008 by $1-$2 million, Phase Forward said. Earnings per share (EPS) are expected to be diluted by around $0.01 in 2007 and $0.02-$0.03 in 2008.
In the third quarter ended 30 September, Phase Forward reported revenues of $34.9 million, up by 24.3% over the same quarter of 2006 and generating operating income of $4.1 million (+47.3%). Diluted EPS were $0.13 compared with $0.08 in the 2006 quarter. Projected revenues and EPS for the full year were $132.5-$133.3 million and $0.46-$0.47 respectively.
