Phase Forward said revenues for the 2005 fourth quarter rose 18% to $23.6 million, versus $20.1 million during the same quarter of 2004. The big company was profitable in 2005 under GAAP accounting rules. That was not the case in 2004. Roughly 41 percent of revenues are from services, not seat licenses, and the company’s gross margins are in the vicinity of 60 percent, with non GAAP margins in the 10-13 percent range.

Phase Forward continues to grow, announcing a January, 2006 deal that won Merck as a customer. The big drug company has a well-documented history of dysfunctional use of technology, previously scrapping a $100 million experiment for electronic data capture without using it. For technology and services in Phase IV trials, Merck has been publicly identified as a customer of Datalabs in the past. It’s not yet clear how extensive Merck’s new deal with Phase Forward will be, but Clin****has asked both companies for comment. For 2006, Phase Forward expects bookings between $105 million and $125 million and revenues between $100 million and $105 million.

The drug safety sector continued to show growth from both emerging and established companies including the selection of the company’s web-based Clintrace 4.0 product by Quintiles. Other drug safety agreements for Lincoln Technologies’ products included Pfizer, AstraZeneca, GlaxoSmithKline and Bayer.