Phase Forward has been one of the success stories in the Route 128 tech cluster during the past decade, and has grown to be one of the largest health IT companies in Massachusetts. But a big question about the firm on Wall Street is how—or whether—its growth spurt will continue.
The Waltham, MA-based firm (NASDAQ:[[ticker:PFWD]]) has been a pioneer in getting drug companies to switch from paper records to software for collecting and managing data in clinical trials. After several years of rapid adoption of the technology, the majority of drug studies now use such software, prompting Phase Forward to seek new ways of making money in the field of clinical development.
Bob Weiler, the company’s chairman and CEO, says his company’s strategy to keep growing has been to build up a host of software products to automate all manner of data-related activities—from the very early stages of clinical development to the safety studies that drug companies conduct after the FDA approves their products. Pharmaceutical firms typically use many pieces of software from different companies to manage the various aspects of clinical research, and Phase Forward aims to provide these companies with one-stop shopping and what it calls an integrated clinical research suite. This will save pharmas money on system upkeep and integration, the CEO says.
“We’ve been riding the adoption curve from paper to electronic data capture for the last 10 years,” Weiler says. Back in 2004, about 30-40 percent of new clinical trials were using software from firms like Phase Forward, while the majority of trials were still managing data on paper records. Today the software is used in about 80 percent of new trials, he says. “Once all new trials start with [data-management software], then we have an adoption curve issue—our growth slows.”
Weiler says the company has been executing a strategy to overcome this growth-curve problem for years, making acquisitions—including at least three deals last year—to add software that offer clinical trials sponsors with new services beyond capturing data electronically (or what the industry calls electronic data capture (EDC)). For example, the company purchased Cambridge, MA-based Waban Software last year for
