Phase Forward, the US-based company that specialises in data management solutions for clinical trials and drug safety, has underlined the trend towards integrated solutions in the eClinical space by paying US$40 million in cash for Clarix LLC, a provider of fully Web-integrated interactive response technology (IRT).
Privately held and based in Radnor, Pennsylvania, Clarix will continue to operate from its existing US offices as part of Phase Forward. Clarix’s interactive response technology will be combined with Phase Forward’s InForm electronic data capture (EDC) solution and its Empirica Safety Suite for pharmacovigilance and adverse event reporting.
IRT is a technology platform that integrates patient interaction systems through a combination of Interactive Voice Response (IVR) systems, web interfaces and handheld electronic patient diaries. Clarix’s fully Web-integrated IRT is used for subject randomisation, predictive medication-inventory management and for operational management and reporting in clinical trials.
In May 2007, US-based contract research organisation Quintiles Transnational formed a joint venture, Cenduit, with medical equipment, products and services supplier Thermo Fisher Scientific to capitalise on an expected growth surge in the market for IRT.
The venture drew on existing experience with IRT in both companies, from both the clinical supply-chain (Thermo Fisher) and the clinical development (Quintiles) perspective. At the time, Quintiles said IVR systems were already used in some 30% of all Phase II-III clinical trials, a percentage that was expanding rapidly.
Clarix’s IRT “adds the power of the Web to the traditional telephone interface in a single, unified solution”, Phase Forward said. This is critical as the market evolves from a telephony-based to a fully web-integrated model, with existing Clarix customers now processing the majority of their transactions via the Web, it noted.
The combination of Clarix’s next-generation technology platform and a services organisation focused on delivering optimal levels of customer satisfaction enables clients to set up clinical trials in half the time it usually takes with more traditional IRT providers, Phase Forward claimed.
Clarix’s IRT systems have been translated into 55 different languages and dialects, and have brought in over 45,000 users in 62 countries, including clinical trial teams at three of the top five and 11 of the top 25 pharmaceutical companies.
The company is further differentiated by its operational and reporting functionality, available via a Web interface, which gives customers management tools including real-time access to both standard and ad hoc trial reports, Phase Forward added.
Seeking consolidation
“Customers are seeking consolidation among solutions and vendors and we have witnessed growing demand for the integration of EDC and IRT systems in particular,” commented Bob Weiler, president and chief executive officer of Phase Forward.
“The experience we’ve gained integrating with over 10 different IRT providers across more than 100 trials has convinced us that Clarix’s advanced technology platform, high levels of customer satisfaction and rapidly growing user base set it apart as pioneering a new direction in this industry,” he said.
The majority of Phase II and Phase III trials require subject randomisation and related medication-supplies management, and IRT is “the predominant solution for automating these processes”, Phase Forward pointed out. It estimates the current IRT market at $200-$250 million and believes the addition of IRT capability “will present significant cross-selling opportunities by enabling Phase Forward to offer both new and existing EDC customers an expanded product offering”.
Financial impact
Clarix’s revenues were around $2.7 million last year. On a stand-alone basis, the acquisition is expected to generate revenues of roughly US$6.3 million for the whole of 2008.
On a non-GAAP (Generally Accepted Accounting Principles) basis, Phase Forward believes Clarix will contribute approximately US$2.7 million in revenue to Phase Forward’s results for the remaining four months of 2008, with an operating loss of approximately US$600,000 that will lead to a reduction of between US$0.01 and US$0.02 in earnings per share (EPS).
The forecast for 2009 is that Clarix will bring in non-GAAP revenue of US$13-US$15 million and will contribute “a small amount” of operating income with a neutral impact on non-GAAP EPS. The acquisition is expected to be accretive to Phase Forward’s overall results from the second half of 2009.
