“It’s a ride, ride, ride, and there ain’t much cover.” That Bruce Springsteen lyric came to mind as we were listening to the etrials call with financial analysts last week.

On the face of it, it should have been a fine quarter, with gross revenues up 25 percent in the second quarter. For the first six months of the year, the figure is a 35 percent increase. But the company is not currently profitable. Founder and former CEO John Cline departed in May after assembling one of the industry’s most comprehensive suites of software tools for clinical trials. In addition to electronic data capture (EDC), the company offers a clinical trial management system (CTMS), interactive voice response (IVR) and patient diaries.

All in all, the tone of the conference call was melancholy. The new CEO, Chip Jennings, said the life sciences still urgently needed e-clinical solutions. “The company has not been organized to fully harness that potential,” Jennings said. “We are assessing the entire business.”

Rough Seas

Jennings stated publicly what few technology suppliers to the pharmaceutical industry have dared to utter: “Service delivery seems to be an industry-wide weakness. By improving the quality of our customer service practice, we have the opportunity to put etrials at the forefront serving the industry. Operationally, we have a lot of work to do. The changes we’re making are designed to instill a culture of accountability.”

Jennings didn’t mention his competitors by name. But it’s clear that two top industry dogs—Phase Forward and Medidata Solutions—have been able to elbow many smaller firms away from some of the juiciest opportunities as the industry transitions to a period in which EDC is a obligatory choice. For the moment, it appears that a rising and much-awaited tide of technology adoption is not lifting all vendor boats equally. In Cleveland, etrials rival DataTrak recently reported a 37% decline in quarterly revenues as it transitions to a new technology.

New Approach

In the official news release about the etrials earnings, Jennings added: “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.”

The company’s Windows-based electronic patient-reported outcome (ePRO) product remains promising, Jennings said. “The e-diary business continues to grow well. Our products are well positioned but we have not captured our share of the e-diary business and the IVR business.”

Diary Segment

etrials is also revamping its sales staff and strategy. Noting that the VP of sales had been replaced, Jennings said the etrials soon-to-double sales staff would have new incentives designed to spur faster financial growth.

The company’s chief financial officer, Jim Clark, noted that the company had signed up two new customers and ten new projects during the quarter. But the future is too murky at the moment, the company said, to offer Wall Street guidance about its books and backlog.

“We do feel from a sales standpoint that we are not gaining the market share we should be relative to our competitors that is going on elsewhere in the space,” said Clark. He suggested that a lingering patent dispute with Datasci could go to trial in early 2008.

This is an earlier ClinPage story on the new version of the etrials product launched early in 2007.