Every few months, clinical trial suite Phase Forward announces that basically every key number—earnings, revenues, customer counts, the whole enchilada—has risen 20 percent or so.

The company’s most recent conference call, offering quarterly and annual financial data, was no exception. ClinPage ran a new brief on a few of the specifics here. At least a dozen of Phase Forwards’ privately owned competitors, to be sure, are also thriving in a landscape of rapid adoption of EDC. But in the face of Phase Forward’s continued success, other rivals are struggling and making less marketing noise in 2008 than they did at the dawn of the eclinical era a few years back.

The company’s 2007 revenues were $134 million, an increase of 26 percent. “We continue to be successful in winning strategic EDC relationships with some of the largest pharmaceutical companies in the world, often in highly competitive situations,” president and CEO Bob Weiler told Wall Street. The company’s net income for 2007 more than doubled, to $29 million.

New Metrics

On the operational level, Phase Forward reported that 22,000 people were trained on its EDC system during 2007, almost three times as many as in 2008. Revenues from contract research organizations (CRO) are growing in importance: they accounted for 16 percent of all revenues for 2007. The average price for an EDC trial run in application service provider (ASP) mode is $400,000, Weiler said, with some trials fetching three times as much or half that sum.

One of the most impressive metrics is the company’s research and development budget, which works out to the ballpark of $20 million annually. Competitors that are not afraid of Phase Forward’s technology should be worried about the R&D figure, which is larger than the annual revenues of some competitors.

More Salesmen

Phase Forward said it is expanding its sales force by 10 percent in 2008, adding two or three individuals to bring the total to 33.

As the industry globalizes, Phase Forward has decided to invest in Akamai technology to speed up the delivery of web pages in China and India and other less developed countries where the telecommunications infrastructure may be iffy. “We’re able to use our financial strength to be able to invest in those products, to make partnerships with people like Akamai, to provide high-end performance for those global trials, and no one else is doing that,” Weiler said.

Small Customers

The industrywide dynamics of the adoption are obviously auspicious for all of the companies in the EDC space. But Phase Forward said it now winning significant amounts of work from customers smaller than the likes of Lilly, Glaxo and Merck, which it used to build its reputation.

Said Weiler: “Much of our business is coming from the five, six, seven, eight trial type segment, which are the smaller companies which are really embracing EDC. They are not converting from paper; they are not doing hybrid trials; they’re not doing anything like that. They just go ahead directly to EDC.”

He was asked directly about a rumored EDC product from the formerly dominant Oracle Clinical. Weiler was polite, acknowledging that some existing Oracle customers will remain loyal to Oracle. But Phase Forward doesn’t sound very worried. “We don’t see that product being that competitive in the new customers,” he said. “We don’t see that product winning new business.” (Oracle Clinical has a standing invitation from ClinPage to discuss its products or strategy.)

Wanting Too Much

Weiler was asked about acquisitions and told Wall Street, as he routinely does, that the company is looking. But the vigor of the larger market made Phase Forward feel that some companies were overpriced, Weiler said. “We saw a lot of people having what we thought were unreasonable expectations of valuations. We are not bottom fishers. We are willing to pay for a good company, but it has to be realistic.”

The most puzzling element to the recent financial news, given how much of it was good, is that Phase Forward’s stock priced has swooned, falling by a third in recent months. Phase Forward has decided to stop giving analysts predictions about “bookings,” a largely unregulated term which it regarded as an imprecise indicator of its business health.

Other reasons for rising and falling stock prices are by definition inscrutable. They could be just about anything: the weakening economy, or worries about the drug industry. Investors could be looking ahead, concerned that Phase Forward’s recent growth can continue; or listening to other EDC firms talk down Phase Forward as they prepare for their own stock offerings or other transactions.

Another option, of course, is that the financial community may be wrong. Or just placing Phase Forward inside a new group of peer companies in the CRO or medical services industries. Which are growing sectors of the economy. Just not expanding quite as fast as some technology or software firms.