Multi-year, multi-million dollar extensions and expansions of contracts with “four of the top 10 pharmaceutical companies in the world” for its InForm electronic data capture solution helped sweeten a fourth quarter that saw Phase Forward’s revenues climb 27.8% to US$48.3 million.

Operating income at the US-based company, which specialises in data management solutions for clinical trials and drug safety, improved by 35.7% to US$3.37 million. But net income plummeted 87.2% to US$2.71 million, or US$0.06 per diluted share, from US$15.7 million (US$0.6 per diluted share) in the same period last year. This reflected a US$10.7 million benefit from income tax provisions in the fourth quarter of 2007.

Licence revenues were up by 5.0% to US$14.0 million in the latest quarter, while service revenues were 40.3% higher at US$34.3 million. InForm licence, application hosting and other related revenues came to US$35.3 million, accounting for 72.9% of all revenues in Q4 and 28.9% ahead of the year-before period, the company reported.

Bob Weiler, chief executive officer and president, said both the traditional Phase Forward businesses and its recently acquired Clarix offering had delivered better than expected revenues during the fourth quarter. The company paid US$40 million in cash for Clarix, a US provider of fully Web-integrated interactive response technology, last September.

The “continued traction” of Phase Forward’s CRO partnering strategy contributed to growth of more than 40% in revenues from contract research organisations during the report period, the company added. Other highlights included the aforementioned contract extensions and expansions with leading pharmaceutical companies.

One of these was an enterprise licence and services contract with Novo Nordisk to extend and expand the use of InForm. As part of the agreement, Novo Nordisk will be employing InForm as its default data capture system across all clinical trial phases through to Phase IV.

For the full year, Phase Forward’s revenues increased by 26.7% to US$170.2 million and operating income rose by 26.1% to US$16.4 million. Net income was US$13.8 million or US$0.32 per diluted share, down by 52.6% from US$29.2 million (US$0.72 per diluted share) in 2007.

Phase Forward is forecasting revenues of US$200 million to US205 million this year on a non-GAAP (Generally Accepted Accounting Principles) basis, with around 75-78% of that revenue coming from backlog at the end of 2008. Non-GAAP operating income is expected to be between US$31 million and US$34 million.

Non-GAAP earnings per share are projected at US$0.50-US$0.54 and GAAP EPS at US$0.30-US$0.34, including the purchase accounting adjustment to record the assumed Clarix deferred revenues and backlog at fair value, non-cash expenses associated with stock-based compensation, and the amortisation of intangible assets.