Two US-based players in the emerging eClinical sector met with distinctly mixed fortunes during the first half of 2007.

Both Nextrials and etrials Worldwide reported substantial increases in revenue from electronic data capture (EDC) and other clinical research software and services in January-June. Nextrials gave an upbeat account of its prospects while keeping details of its sales and income close to its chest. By contrast, etrials admitted it had “failed to keep pace with the industry’s rapid growth”, a position reflected in spiralling losses.

The brief statement from Nextrials, founded eight years ago in San Ramon, California, made up in enthusiasm what it lacked in specifics. Revenues for the first half had shot up by more than 60% on a double-digit increase in sales, the company said, demonstrating “the pharmaceutical, biotechnology and medical device industries’ accelerating interest in the elimination of paper-based collection in clinical trials”.

There were two main reasons for the current rapid growth rate, Nextrials added: repeat customers such as ArQule and GlobeImmune; and a trend towards large, multinational clinical trials.

“It’s particularly interesting to note that, although more sponsors have expanded their search for qualified subjects outside the United States, patient recruitment still remains an enormous challenge,” commented co-founder and chief executive officer James Rogers. Nextrials was working to resolve this issue by leveraging new data collection standards so that the company’s flagship EDC product, Prism, could be integrated with other healthcare platforms.

“This promises to open up large, untapped pools of potential clinical trial participants by enabling sponsors to match study criteria with electronic patient records already in healthcare systems worldwide,” Rogers explained.

Get back on track

Meanwhile, etrials is trying to get back on track after a period of some turmoil that has seen the departure of its former chief executive officer (CEO) John Cline; the appointment of Peter Benton as interim chief operating officer, with a brief to improve the company’s growth outlook and restructure its operations; the launch of a client services management practice; and the reorganisation of the etrials sales force.

“To capitalise on our assets and re-assert our position in a nascent market that still offers abundant growth opportunities, we are formulating a fresh go-to-market strategy and implementing the necessary structure to jump-start the revenue growth engine, drive market share gains and put the company on track to achieve high levels of sustainable profitability,” stated Chip Jennings, the healthcare industry veteran who replaced Cline as president and CEO in May.

While etrials’ net service revenues climbed 25.3% to US$5.20 million in the second quarter ended 30 June, the company sustained an operating loss of US$1.54 million compared with a US$185,384 loss for the second quarter of 2006. The net loss for the latest quarter was US$1.33 million against a US$60,746 loss in Q2 2006.

Included in the losses were around US$0.6 million in non-cash stock-based compensation expenses – US$0.3 million of which related to the options vesting severance agreement for etrials’ former CEO – and an additional US$0.5 million in CEO transition expenses linked to Cline’s departure and the appointment of Jennings.

The first half of the year delivered a similar picture. Net service revenues were US$9.28 million, up by 35.3% over the same period of 2006, while the operating loss climbed from US$1.35 million to US$2.71 million. The net loss for the half year was US$2.27 million compared with a US$986,403 net loss in H1 2006.

Although etrials had “claimed an early lead in the eClinical space with its three integrated products and flexible solutions”, since the end of 2005 it had lagged behind the rapid growth of the sector, “ceding leadership and market share in all segments in which it competes”, Jennings commented. The first step towards remedying these failings was to sharpen the company’s focus on operational excellence, with particular emphasis on customer service, sales and client service-delivery mechanisms.

In addition to the initiatives already mentioned, etrials plans during the second half of the year to “continue the process of retooling the operations by selectively investing to fill gaps in the sales staff; revamping sales management and procedures; and redeploying market resources”, Jennings noted. These various actions will enable etrials to “expand into a comprehensive and responsive clinical patient information solutions provider”, he said.