Clinical trial sweet spot

Phase Forward acquires IRT provider Clarix for $40 million

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WALTHAM, Mass.—Zeroing in on what they call clinical researchers' "sweet spot," Phase Forward, a data management solution provider for clinical trials, announced in September its acquisition of Clarix LLC, a privately held, interactive response technology (IRT) provider, for $40 million in cash.

The addition of Clarix's Web-based IRT technology to Phase Forward's scale and global customer base will make the company a one-stop provider of IRT and electronic data capture (EDC) solutions and a market leader. In a call to investors announcing the deal, Phase Forward executives estimated the acquisition will contribute approximately $2.7 million to Phase Forward's revenue for the remainder of the year and add between $13 and $15 million in non-GAAP revenue during 2009.

More importantly, the acquisition will enable Phase Forward to offer its customers the consolidated eClinical solution they have frequently been requesting, says Martin Young, Phase Forward's vice president of corporate development.

"In the last decade, large pharma companies have made huge investments in drug discovery, but that investment is only worth something if they can bring a treatment to market with speed and accuracy," Young says. "They need a solution aimed right at their sweet spot. We're confident that bringing our large customer base and Clarix's EDC solution under one contract is something other companies don't tend to find on a one off basis."

Clarix's technology provides customers with a traditional telephone interface and real-time operational and reporting functionality via a Web interface. The IRT system has been translated into 55 different languages and dialects and is in use by more than 45,000 users in 62 countries, including clinical trial teams at three of the top five and 11 of the top 25 pharmaceutical companies.

"This really is a next-generation technology platform, and the only one we saw out there that unified the Web and telephony," Young says. "As our customers do more and more EDC, they're asking for consolidation of vendors. They want to deal with one company and not multiple contracts, multiple project managers and lots of different help desks. Our customers tell us that automating and accelerating the time it takes them to run a clinical trial enables them to finish clinical trials with greater speed and accuracy."

According to Clarix, its IRT systems enable customers to set up trials in less than half the time it typically takes with traditional IRT providers. Founder and CEO Jagath Wanninayake says leveraging Phase Forward's global reach and mature business model will enable Clarix to deliver even better service to its customers.

"We were self-funded from the get-go and were looking at 2008 possibly being an exit for us, but a fortuitous series of events brought us on the same path," Wanninayake says.  "We were approached by a variety of similar companies, but we felt these guys really got it when it came to technological innovation. That's something that is a difficult thing to do in any industry, but it's particularly the case in the pharmaceutical industry, where things are evolutionary rather than revolutionary. Phase Forward has a good grasp of what it takes to move our industry forward. We believe this acquisition will be a game-changing event, a marriage that could change the nature of how trials are conducted." DDN

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