CLEVELAND, Sept. 25 /PRNewswire-FirstCall/ -- DATATRAK International, Inc. , a technology company focused on global eClinical solutions for the clinical trials industry, today reported that a multibillion-dollar North American client has agreed to deliver a minimum of $3 million of clinical trial contracts to the Company over the next 15 months. The contracts that are expected to be awarded as part of this agreement include clinical trials in Phases I, II and III. This client has not yet decided to standardize on DATATRAK, but is in addition to the previously announced four companies that have decided to award all of their clinical trial activity to the Company. Both of these situations represent in some fashion the next logical step of developing a long-term relationship with a consistent information technology provider.
In return for this minimum level of activity, DATATRAK has provided the client with a consistent pricing format. Having pre-established pricing and contract terms together with expectations of project flow over an extended time frame, eliminates redundant activities for both companies, leading to expedited clinical trial initiations and important visibility for the technology provider which aids in operational planning. The business model representing this relationship continues to be the Company’s trial-by-trial contracting approach and is not a licensing structure. Therefore, the individual contract awards from this overall commitment will be progressively added to the Company’s backlog as the individual clinical trials are initiated. A Master Agreement governing this business development is currently being finalized, though the awarding of projects has already begun.
DATATRAK does not announce each individual clinical trial commitment, but provides such information when there is a unique characteristic regarding a recent award. The importance of this announcement is that it represents yet another example of customers committing blocks of clinical trials to DATATRAK. Additionally, the format used in this situation could be an advanced and repeatable business structure for other clients who seek similar advantages. All clients, even those representing the recent standardization movement, can receive similar pricing advantages with quantified volumes of business over a fixed timeframe. An established business relationship based upon familiarity and consistent pricing structures eliminates redundant activity associated with the selection and contracting process that burdens the traditional “project-by-project” clinical trial awards and focuses clients on the more important objectives of advancing their operational process and achieving true acceleration of clinical development.
“We are pleased to have brought to fruition a business model that we have conceptualized for the past several years while waiting for this technology market for clinical trials to begin to mature to the point of being comfortable with its advantages,” stated Dr. Jeffrey A. Green, President and Chief Executive Officer of DATATRAK International, Inc. “There are a multitude of key points associated with this development. Blocks of trials are being committed, paralleling an early industry trend, from a client very satisfied with our Company’s products and services. There is no hesitancy of advancing to the broader platform. There is an increase in visibility of future awards. This business model preserves the fairness of individualized clinical trial budgets while providing contract benefits to both customer and provider from mutual commitments over a fixed time period. This business model has a foundation in a proven budgetary approach and avoids the risk of prematurely ‘estimating’ what a license structure would be for an innovative multicomponent eClinical platform and possibly underselling the value. This approach can now serve as a template with other clients seeking to achieve the identical advantages for their clinical development programs.”
Green concluded, “The last take-away from this announcement is that this customer gives us further comfort in achieving our stated goals over the next several years of having four to five ‘anchor’ clients capable of initiating 30-40 new clinical trials on an annual basis in addition to thirty to forty clients capable of initiating 1-10 new trials per year. We are currently in a transitional period between the successful conclusion of several large clinical trials containing thousands of patients that have been ongoing for several years and the creation of new momentum through relationships such as the one represented by this announcement and the standardization customers. Over the next several quarters we should begin to realize the cumulative impact of our expanding customer base, and the associated increase in clinical trial volumes, combined with the new revenue lines from the eClinical platform. We remain confident that we have the leading products and services to meet the demands of the global clinical trials industry as it moves toward more technology implementations.”
DATATRAK International, Inc. is a worldwide technology company focused on the provision of multi-component eClinical solutions and related services for the clinical trials industry. The Company delivers a complete portfolio of software products that were created in order to accelerate clinical research data from investigative sites to clinical trial sponsors and ultimately the FDA, faster and more efficiently than manual methods or loosely integrated technologies. DATATRAK’s eClinical software suite can be deployed worldwide through an ASP offering or in a licensed Technology Transfer model that fully empowers its clients. The DATATRAK software suite and its earlier versions have successfully supported hundreds of international clinical trials involving thousands of clinical research sites and encompassing tens of thousands of patients in 56 countries. DATATRAK International, Inc.'s product suite has been utilized in some aspect of the clinical development of 16 separate drugs that have received regulatory approval from either the United States Food and Drug Administration or counterpart European bodies. DATATRAK International, Inc. has offices located in Cleveland, Ohio, Bonn, Germany, and Bryan, Texas. Its common stock is listed on the NASDAQ stock Market under the ticker symbol “DATA”. Visit the DATATRAK International, Inc. web site at www.datatrak.net.
Except for the historical information contained in this press release, the statements made in this release are forward-looking statements. Factors that may cause actual results to differ materially from those in the forward- looking statements include the ability of the Company to absorb corporate overhead and other fixed costs in order to successfully market its software; the development and fluctuations in the market for clinical trial technology; the degree of the Company’s success in obtaining new contracts; the timing of payments from customers and the timing of clinical trial sponsor decisions to conduct new clinical trials or cancel or delay ongoing trials; governmental regulation; the early stage of the Company’s business and operations; and general economic conditions. In addition, the Company’s success depends on the outcome of various strategic initiatives it has undertaken, all of which are based on assumptions made by the Company concerning trends in the clinical research market and the health care industry.
DATATRAK International, Inc.
CONTACT: Jeffrey A. Green, Pharm.D., FCP, President and Chief ExecutiveOfficer, +1-440-443-0082 x112, or Terry C. Black, Chief Financial Officer,+1-440-443-0082 x110, both of DATATRAK International, Inc.; or NealFeagans, Investor Relations of Feagans Consulting, Inc, +1-303-449-1184
Web site: http://www.datatrak.net//
