Phase Forward (PFWD) recently announced that it completed its previously announced acquisition of the Interactive Voice and Web Response Services business of Covance Inc. (CVD) for $10 million in cash.

Headquartered in Princeton, New Jersey, Phase Forward is a leading provider of data management solutions for clinical trials and drug safety.

As part of the agreement, Phase Forward and Covance also entered into a multiyear marketing agreement. Management expects that this acquisition will strengthen its Interactive Response Technology solutions.

Earlier, the company reported second quarter results, which beat analysts’ expectations and trimmed its outlook for 2009. Management stated that it expects revenues between $214.5 and $217.5 million. On a non-GAAP basis, the company projects EPS between 47 cents and 50 cents, down from the average forecast of 54 cents and its prior guidance of 51 cents to 54 cents, primarily due to acquisition related costs of 4 cents to 5 cents.

Phase Forward is a leading vendor in the market for clinical trial management systems (CTMS) and electronic data capture (EDC) for clinical trials. The company provides software and services to pharmaceutical, biotechnology, medical device and other research-related companies and institutions. EDC utilization in the clinical trial process is currently under-penetrated and we believe that, at some point in the next decade, it will reach complete market saturation. Within that framework, Phase Forward is a best-in-class vendor of EDC and CTMS solutions to product developers.

We believe increasing adoption of EDC will benefit Phase Forward, and that the company’s product breadth could allow it to gain market share, allowing it to grow at above market rates, leading to positive revenue and earnings surprise and revisions.

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