Integration of Next-Generation IRT with Market-Leading InForm(TM)
EDC Offering Sets New Industry Standard
WALTHAM, Mass.--(BUSINESS WIRE)--Sept. 5, 2008--Phase Forward
(NASDAQ: PFWD), a leading provider of data management solutions for
clinical trials and drug safety, today announced that it has acquired
privately held Clarix LLC, an innovative provider of fully
Web-integrated interactive response technology (IRT), for $40 million
in cash. Clarix, headquartered in Radnor, Pa., will continue to
operate from its existing offices as part of Phase Forward.
Clarix's fully Web-integrated IRT is used for subject
randomization, predictive medication inventory management, and
operational management and reporting in clinical trials. Clarix
combines a next-generation technology platform with a services
organization focused on delivering the highest levels of customer
satisfaction to enable customers to set up trials in less than half
the time it typically takes with traditional IRT providers.
Clarix's solution adds the power of the Web to the traditional
telephone interface in a single, unified solution. This is critical as
the market evolves from a telephony-focused model to a fully
Web-integrated model, a trend underscored by the fact that current
Clarix customers now process the majority of their transactions via
the Web.
Clarix is further differentiated by its operational and reporting
functionality, available via a Web interface, which provides customers
with management tools including real-time access to both standard and
ad hoc reports. Clarix's IRT systems have been translated into 55
different languages and dialects and are in use by over 45,000 users
in 62 countries, including clinical trial teams at three of the top
five and 11 of the top 25 pharmaceutical companies.
"Customers are seeking consolidation among solutions and vendors
and we have witnessed growing demand for the integration of EDC and
IRT systems in particular," said Bob Weiler, president and CEO, Phase
Forward. "The experience we've gained integrating with over 10
different IRT providers across more than 100 trials has convinced us
that Clarix's advanced technology platform, high levels of customer
satisfaction and rapidly growing user base set it apart as pioneering
a new direction in this industry. We believe the combination of Clarix
IRT and Phase Forward's market-leading InForm EDC solution and
Empirica(TM) Safety Suite will represent the next generation of
eClinical innovation."
The majority of Phase II and Phase III studies require
randomization and related medication supplies management, and IRT is
the predominant solution for automating these processes. Phase Forward
estimates the current IRT market to be between $200 and $250 million,
and believes that the addition of an IRT offering will present
significant cross-selling opportunities by enabling Phase Forward to
offer both new and existing EDC customers an expanded product
offering.
"From the time of our founding Clarix has shared Phase Forward's
vision for enabling more efficient clinical trials," said Jagath
Wanninayake, Clarix CEO and founder. "The combination of our
technology with Phase Forward's scale, market leadership and global
installed base realizes this vision through a more unified eClinical
solution. Both of our companies are focused on delivering
best-in-breed technology solutions, and our cultures are very similar
in our mutual focus on attracting and developing top talent, a shared
commitment to innovation and the pursuit of excellence in quality and
customer satisfaction. We look forward to leveraging these synergies
to the benefit of customers."
Thomas Weisel Partners LLC acted as exclusive financial advisor to
Phase Forward in the transaction.
Financial Impact of Clarix Acquisition
The following statements include statements about future
performance and are based on current expectations and the company
assumes no obligation to update or confirm them. These statements are
forward-looking and inherently uncertain. Actual results may differ
materially as a result of the factors identified below and the factors
identified in our public filings made with the Securities and Exchange
Commission, or other factors.
Non-GAAP references in this press release exclude the amortization
of intangibles associated with acquisitions, FAS123R stock based
compensation expense and, beginning in the third quarter of 2008, will
exclude the effects of purchase accounting for deferred revenue and
backlog for Clarix.
Clarix generated approximately $2.7 million in revenue in 2007 and
Phase Forward estimates that they will generate approximately $6.3
million for the full year 2008 on a stand-alone basis.
On a non-GAAP basis, the company currently estimates that Clarix
will contribute approximately $2.7 million in revenue to Phase
Forward's results for the remaining four months of 2008, with an
operating loss of approximately $600,000 that will lead to a reduction
to EPS of between $0.01 and $0.02.
The company expects Clarix's solutions to contribute non-GAAP
revenue of between $13 and $15 million during 2009, which represents
over 100% growth compared to its stand-alone expectations for Clarix
in 2008. The company expects the acquisition to contribute a small
amount of operating income for the full year 2009 and be neutral to
non-GAAP EPS. The acquisition is expected to become accretive to the
company's overall results beginning in the second half of 2009.
On a preliminary basis, the company estimates that the deferred
revenue and backlog adjustment could reduce Clarix's GAAP revenue
contribution by between $1 and $2 million in 2008 and between $3 and
$4 million in 2009. The company plans to provide updated GAAP guidance
when it reports third quarter results, at which time it expects to
have completed the valuation and deferred revenue and backlog analysis
related to the Clarix acquisition.
Certain forward-looking non-GAAP references included in this press
release are not reconciled to GAAP references because GAAP references
are not available without unreasonable efforts.
Conference Call
The company plans to host its investor conference call today at
8:00 a.m. EDT to discuss details of the Clarix acquisition. The
investor conference call will be available via live Webcast on Phase
Forward's Web site at www.phaseforward.com under the tab "Investors."
To participate by telephone, the domestic dial-in number is
888-680-0892 and the international dial-in number is 617-213-4858. The
access code is 70689876. Investors are advised to dial in at least
five minutes prior to the call to register. The Webcast will be
available for replay until Friday, October 3, 2008 on the "Investors"
page of Phase Forward's Web site.
About Clarix
Clarix LLC is a company providing an innovative suite of eClinical
software products including the most advanced, fully Web-integrated
IRT in the industry. Clarix applications are designed for rapid
deployment, flexibility and advanced real-time reporting capability.
The Clarix IRT solution is currently being used by over 45,000 users
at clinical sites in over 62 countries.
About Phase Forward
Phase Forward is a leading provider of integrated data management
solutions for clinical trials and drug safety. The company offers
proven solutions for electronic data capture (InForm(TM)), phase I
clinic automation (LabPas(TM)), clinical data management
(Clintrial(TM)), clinical trials signal detection (CTSD(TM)),
strategic pharmacovigilance (Empirica Signal(TM)) and Signal
Management, adverse event reporting (Empirica Trace(TM)) and applied
data standards (WebSDM(TM)). In addition, the company provides
services in the areas of application implementation, hosting and
validation, data integration, business process optimization, safety
data management and industry standards. Phase Forward's products and
services have been utilized in over 10,000 clinical trials involving
more than 1,000,000 clinical trial study participants at over 280
organizations and regulatory agencies worldwide including:
AstraZeneca, Boston Scientific, Dana-Farber Cancer Institute, Eli
Lilly, the U.S. Food and Drug Administration, GlaxoSmithKline, Harvard
Clinical Research Institute, Merck Serono, Novartis, Novo Nordisk,
PAREXEL International, Procter & Gamble, Quintiles, sanofi-aventis,
Schering-Plough Research Institute, Servier, Tibotec and the U.K.
Medicines and Healthcare Products Regulatory Agency. Additional
information about Phase Forward is available at www.phaseforward.com.
Cautionary Statement
Certain statements made in this press release that are not based
on historical information are forward-looking statements which are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. This press release contains express or
implied forward-looking statements relating to, among other things,
Phase Forward's expectations and assumptions concerning financial
performance of Phase Forward following the consummation of its
acquisition of Clarix LLC, Phase Forward's ability to achieve expected
synergies as a result of the acquisition and the strengthening of
Phase Forward's market position as a result of the acquisition. These
statements are neither promises nor guarantees, but are subject to a
variety of risks and uncertainties, many of which are beyond Phase
Forward's control, which could cause actual results to differ
materially from those contemplated in these forward-looking
statements. In particular, the risks and uncertainties include, among
other things, Phase Forward's inability to successfully integrate
Clarix and its employees into Phase Forward and achieve expected
synergies; Phase Forward's ability to accurately forecast the
acquisition-related restructuring costs and allocation of the purchase
price, goodwill and other intangibles, and acquisition related and
other asset adjustments; costs associated with and consequential to
the acquisition and integration of Clarix and benefits realized from
the acquisition; our ability to convince prospective customers to
adopt our solutions; competition; changing customer requirements;
governmental regulation; our ability to maintain profitability;
fluctuations in our operating results; long sales and implementation
cycles; our dependence on a limited number of customers or suppliers;
product performance; third party service interruptions or delays;
technology failures; our ability to maintain customer relationships
and contracts; our ability to retain and hire skilled personnel; our
ability to protect our intellectual property rights; product liability
or intellectual property infringement claims brought against us;
acquisitions; our ability to manage our rapid growth; our ability to
obtain capital when desired on favorable terms; our ability to comply
with operating and financial covenants in our loan agreement; and the
volatility of the market price of our common stock. Existing and
prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. Phase Forward undertakes no obligation to update or revise the
information contained in this press release, whether as a result of
new information, future events or circumstances or otherwise. For
additional disclosure regarding these and other risks faced by Phase
Forward, see the disclosure contained in Phase Forward's public
filings with the Securities and Exchange Commission including, without
limitation, its most recent Annual Report on Form 10-K.
CONTACT:
Public Relations:
Phase Forward
Elaine Maynard, 781-902-4371
Elaine.Maynard@phaseforward.com
or
Investor Relations:
ICR
Timothy Dolan, 617-956-6727
Timothy.Dolan@icrinc.com
SOURCE: Phase Forward
