etrials Worldwide, Inc. (ETWC-NASDAQ)
March 13, 2009 Issue
The Most Powerful Name In Corporate News and Information
Being The Only True Integrator Of eClinical Solutions For Life Sciences And Pharmaceutical Companies Gives etrials A Leg Up On The Competition
etrials Worldwide, Inc. (Nasdaq: ETWC), a leading provider of eClinical software and services to pharmaceutical, biotechnology, medical device and contract research organizations, offers adaptive, Web-based tools that work together to coordinate data capture, logistics, patient interaction and trial management – turning data into intelligence and shortening the pathway to an actionable study endpoint. etrials is one of the only top-tier solution providers that offers electronic data capture (EDC), interactive voice and Web response (IVR/IWR), electronic patient diaries (eDiary) as part of a flexible and integrated software-as-a-service (SaaS) platform or as individual solutions to capture high quality data from multiple pivot points to enable real-time access for perfectly informed decision-making. As an experienced leader, etrials has facilitated over 900 trials involving more than 400,000 patients in 70 countries, and has participated in 42 studies that resulted in 14 approved new drug applications and/or regulatory approvals.
Mr. Trepanier possesses 17 years of financial management experience and has previously held positions as Chief Operating Officer with Durham, NC-based SmartOnline, Chief Finance Officer /Chief Operating Officer at DataFlux Corporation and Director of Finance at Hill-Room Corporation. Mr. Trepanier is a licensed CPA in North Carolina. He is an active member in AICPA and NC Board of Certified Public Accountants, a Six Sigma-certified Green Belt and Certified Project Manager in Applied Project Management and Operational Optimization (Harrington Institute).
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – March 13, 2009
CEOCFO: What are your adaptive solutions and what is different about etrials?
Mr. Connaghan: “Adaptive refers to our ability to meet changing customer requirements in a flexible and nimble fashion. Our customers need the ability to look at and analyze clinical data quickly, in order to make changes in a timely manner or make changes in the middle of a clinical trial based on the results they are seeing. Our integrated eClinical solutions help make that information much more actionable. Today we can provide them with the means for real-time data and the ability to make real-time decisions based on that information. That is important to our customers running critical clinical trials.”
CEOCCFO: What is the competitive landscape for etrials; where do you fit in the marketplace
Mr. Trepanier: “Our focus is on the growing mid-tier market, where there are more clinical trial sponsors and more studies available. While there are a number of competitors for each of our technologies, we are unique in providing a complete end-to-end and integrated solution encompassing all three of the key eClinical technologies. That gives us a competitive advantage over a lot of the other competition and choices out there because of the fact that they do not possess the three choices of technology: EDC, eDiary and IVR/IWR, as well as the integrated solutions that we have. With the economic conditions the way they are today, what you are seeing out there is a lot of customers want to pick one vendor and be able to have all multi-technologies and have choices, and we are one of the only options out there that offers all three.”
CEOCFO: Please explain a little bit about the different technologies.
Mr. Connaghan: “The cornerstone is our EDC (electronic data capture), which is a Web-based tool for collecting and analyzing clinical trial information in real-time. Another is our central administrative interface for site-wide visibility and control, which enables drug and supply management, as well as patient enrollment and randomization capabilities. Lastly, is multiple modalities for electronic patient reported outcomes, which record data directly from the patient in a study either by a handheld PDA, Web site or by phone.”
CEOCFO: When your clients come to you do they know what they want, or are you guiding them to what might work best for them?
Mr. Connaghan: “Biotech, pharma and medical device companies come to us wanting assistance in collecting, managing and viewing the massive amounts of data for their clinical trials. Some have worked with these technologies in the past, and many others are new to the process. It is a different dynamic then deploying a study using paper records. They look to us as the experts in technology implementation, so we spend a good deal of time in the specification process, helping them determine the most efficient means of conducting their trial. And when combined, our software and services are dissolve an addition layer of complexity, contributing to getting drugs and devices to market as safely and quickly as possible.”
CEOCFO: Will you give us an example of how you help them administer the services?
Mr. Connaghan: “Each study is very unique and each customer can have unique requirements. Based on the attributes defined in the clinical trial protocol, we develop and deploy a case report forms, surveys, and database schemas, among other important study-specific tasks to ensure the goals related to the therapy, indication, Phase of the trial, and regulatory conditions are met. We assign a dedicated project manager specific to the technology and enlist application developers to actually create the screens, many times from paper drawings.”
CEOCFO: You have had trials in more than 66 countries, how much is international, and is that a growing component for you?
Mr. Trepanier: “Many of the studies we’ve deployed are global in scope and all indications are that this trend is increasing. A study sponsor might be based in the U.S., but many times their clinical trials are being conducted in countries throughout South America, Europe and Asia, in addition to the U.S. There are a lot of pharmaceutical companies internationally that we do business with. We opened up our UK office back in 2006, and we have seen substantial growth. I would say about 35% of our business is international right now.”
CEOCFO: Your clinical trials have a wide reach!
Mr. Connaghan: “We just announced in early January some new projects we were awarded by a major pharmaceutical company using our ePRO solution, which I counted 67 countries. So depending on what type of patients you are looking for, you may need to go to some of these countries where people are getting treated.”
CEOCFO: How do you reach your potential customers?
Mr. Trepanier: “A lot of our business is repeat business right now, so we have over 90% retention factor. The customers that use us really like our people and technology. Those good references are better than any marketing campaign we can create. However, we have a sales force that we ramped up throughout 2008 as we made investments into the sales organization and they are driving a great deal of new business. But as I said, a lot of it is word of mouth, because ours is an industry that is based on strong relationships.”
CEOCFO: There has been some realignment
in the company under your new CEO; what is changing and do you see more
CEOCFO: Has the current economic downturn been a factor for etrials, or has it not trickled down to your industry yet?
Mr. Trepanier: “It has trickled down in the industry, but it hasn’t impacted us so much. One of the things that we have is the stability of our balance sheet. We have a strong cash balance, with over $12,000,000 in cash. Whereas a lot of our competitors don’t have the same options that we have, so it hasn’t affected us as much. What is happening is a lot of the customers are looking for stability because these clinical trials don’t just last a month or two; they are 24 to 30 months. Our customers are looking for stable companies that are going to be around a long time. It is actually giving us more opportunities to get some rescue studies from other competitors as well as opening the door for people that may not have looked at us in the past, to drive towards us.”
CEOCFO: Will you tell us about your recent contract for your eDiary program?
Mr. Trepanier: “It is a top ten global pharmaceutical company that signed about $2.6 million worth of business with us. It is over six countries, which Denis was mentioning before, and it is all ePRO business using our hardware devices and software systems, so it is one where the patients will have input their data directly into the wireless handhelds. Clinicians can then see that individual data and collective data together much sooner than it could otherwise be reported. We will allow them to generate reports and get the information back to the customers immediately, so they can easily see how the drugs are performing and how the overall study is. It allows them to adapt to the study very quickly because the patients literally get a handheld wireless device in their hands and they can log their information in with the response almost instantly being visible to the study team for analysis.”
CEOCFO: It sounds like the technology is so much more important than most people would think!
Mr. Connaghan: “It is because it allows you to react very quickly and adapt quickly and that is the key of using an electronic system. Before many of the studies were recording data on paper, and running these trials was a lot more expensive, time consuming and error prone. It also took a lot longer to analyze the data and assess the actually results of the study. Therefore, it was much more of a cost impact for them and it took a lot longer to get the drugs to market. Whereas now they can adapt quickly, get the information very quickly and it is all real-time, so it is very beneficial to them. That is the strength that we bring to the table with them. The other thing we do is really focus on our services and driving customer satisfaction and getting in with our customers and helping them determine their roadmap for the long-term as to where they want to go. We want to help them get to end results and their objects, and be part of that for a long-term solution and be a long-term business partner with them.”
CEOCFO: In closing, why should potential investors pay attention to etrials?
Mr. Connaghan: “We are in a high growth market with a go-to-market strategy that capitalizes on emerging trends in the industry and that is integration of these technologies and services. 2008 was a year of board-approved investment in our business to optimize our processes and enhance our technology. We have proven in 2008 through record sales in Q-2 and Q-3 and a 30% growth in our backlog throughout the year, which means are offerings are resonating to customers. Although 2008 was a year of investment into the company where we focused on reengineering our infrastructure internally, 2009 is really projected to be the year where we break even, become cash flow positive and really start driving and becoming a real impact player in the industry. We have a strong recognized name in the industry, and even though a portion of the year was turbulent in terms of leadership changes, the Company is really rallying behind Denis, and our strong results for the second half of the year really set the table nice for a strong 2009.
Several competitors provide one or a
combination of maybe two or possibly three different eClinical technologies
and service products. However, because we are such an innovator in the
industry and because we have the proven integration, companies want someone
like us to come in and actually provide the one-stop-shop solution of each
of the three core clinical technologies from one company, not three separate
or two separate or not through a CRO (Contract Research Organization). When
it comes to a company having that experience and expertise and the ability
to collect data from so many sources -- the patient, the sites, and for the
overall trial – our customers know that with our solutions in place they can
move that data from system to system seamlessly, eliminating the need to
invest more time and money ensuring their trials’ data is integrated on a
Mr. Trepanier: “Just the growth in the
industry, in 2009 alone, the market spends for clinical technology is
expected to exceed $1 billion. So there is a lot of interest in the market
that we are in and the industry that we are focusing on. Especially with the
economic conditions the way they are, there is a great deal of potential for
life sciences and pharmaceutical companies to outsource this critical piece
of their business to us, because they can’t afford to do it themselves. They
don’t have the technology or the expertise that we have.”
“Biotech, pharma and medical device companies come
to us wanting assistance in collecting, managing and viewing the massive
amounts of data for their clinical trials. Some have worked with these
technologies in the past, and many others are new to the process. It is a
different dynamic then deploying a study using paper records. They look to
us as the experts in technology implementation, so we spend a good deal of
time in the specification process, helping them determine the most efficient
means of conducting their trial. And when combined, our software and
services are dissolve an addition layer of complexity, contributing to
getting drugs and devices to market as safely and quickly as possible.” - M.
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