DATATRAK Aquires The Most Complete eClinical Platform in the Clinical Trials Industry
DATATRAK International, Inc. (Nasdaq: “DATA”), a technology company focused on global eClinical solutions for the clinical trials industry, today reported it has entered into an Agreement to acquire the outstanding stock of ClickFind, Inc., of Bryan, Texas, a privately-held company focused on the provision of integrated technology solutions for clinical trials. The transaction provides for a total consideration of $18 million inclusive of $4 million each of cash and three-year notes and 1,026,522 restricted shares of DATATRAK common stock priced at $9.25 per share. According to the Purchase Agreement, the sellers’ stock will remain restricted for 12 months.
The acquisition of the expansive and integrated software architecture of ClickFind, Inc. immediately fulfills DATATRAK’s strategy of being able to provide its customers with the broadest multi-component eClinical capability in the clinical trials market. This innovative product suite will be branded as DATATRAK eClinical. This broad-based architecture is flexible enough to support electronic- or paper-based clinical trials and also contains functionalities supporting: Electronic Data Capture (EDC); traditional Data Management activities; Interactive Voice Response Systems (IVRS); Voice and Web Randomization; Medical Coding; Clinical Trial Management Systems (CTMS); Core Laboratory Digitized Electrocardiograms and Image Processing; Drug Inventory Management; Electronic Patient-recorded Outcomes (ePRO); Workgroup Collaboration and Workflow Management Platforms; and the end-to-end multilingual capabilities including double-byte characters, such as Kanji languages, to fully support the Japanese, Chinese and Korean markets. Several of these capabilities will introduce new revenue lines for DATATRAK, in addition to those currently associated with the Company’s core business of traditional EDC products and services.
DATATRAK will be able to leverage its current global deployment experience in 55 countries to allow for expansion of the former ClickFind product suite into a worldwide scope. Over the past five years, ClickFind’s product suite has been used in 83 clinical trials in 19 countries involving 35,000 patients at more than 1,600 research sites. These additions, together with DATATRAK’s extensive experience, lead to a combined total for both companies of more than 230 clinical trials involving data collection in more than 100,000 patients at approximately 10,000 research sites worldwide.
ClickFind is bringing 15 new clinical trial sponsor clients and relationships with 10 Contract Research Organizations to DATATRAK. The active number of ongoing clinical trials with the combined companies is approximately 100. The combined client base currently totals approximately 47, providing an attractive nucleus of potential from which to grow.
As DATATRAK moves into 2006 and 2007, the Company expects the ClickFind acquisition to be additive to earnings. The 2005 Audited Financials of ClickFind, Inc. demonstrated revenue of $1.4 million and a net income of $288,000.
DATATRAK will continue to support its DATATRAK EDC® Version 4.0 technology and delivery platform until all current clinical trials that are utilizing that product suite are completed. New clinical trials can still be initiated with Version 4.0 or, if these customers wish to receive the benefits of the multi-component platform, they can start new trials with DATATRAK eClinical. There will be no migration of trials using Version 4.0 over to the new eClinical platform, as they exist on different architectures. Mr. Jim Bob Ward, President and CEO of ClickFind will become Vice President of eClinical Development for DATATRAK.
“We are excited about the international presence, industry leadership and public market benefits that the merger with DATATRAK brings,” stated Mr. Ward. “The enhanced technology resources and global support infrastructure of the combined company will enable us to provide the most comprehensive and advanced eClinical research solutions in the life sciences market today. Our new product and service offering extends beyond EDC to address the additional activities required to bring new products to market in a timely and cost efficient manner.”
“DATATRAK currently provides the superior and most proven standalone EDC product and service in the worldwide clinical trials market that carries a significant value proposition of efficiency, patient-safety enhancements and cost-savings to our clients,” stated Dr. Jeffrey A. Green, President and Chief Executive Officer of DATATRAK International, Inc. “This opinion is objectively supported with evidence from nine of our customers who have left two other leading and larger technology providers and landed with DATATRAK. However, this product suite does not contain the full range of components from an eClinical perspective. Our advancement into a complete eClinical suite of capabilities has been an internal strategic direction of DATATRAK for the past several years. As this global clinical trial market transitions from manual methods to technology-enabled processes, our vision is that more complete functionalities will be required by our customers. Preferably, these functionalities need to exist in one architecture and be available with a single service provider in order to make contracting simpler for our clients.”
Green continued, “Given this strategy, our current status and our desire to remain a leader in this expanding market, DATATRAK was faced with the classic ‘build versus buy’ scenario. We elected to buy and offer an entire eClinical platform immediately instead of taking longer, missing market opportunities and consuming capital from building each component internally. The eClinical market will be larger than the EDC market alone and we want to seize this opportunity. In a complementary fashion, ClickFind has teamed up with the most experienced company in this industry that can provide the resources, global scope and infrastructure that is necessary for their growth. The combination produces a single Company with the richest history in successfully delivering global clinical trials and the most complete and modern architecture for an integrated eClinical solution housed within a single corporation. Our collective competitive advantages have been solidified for years to come.” http://www.datatrak.net
The Company will hold a conference call Monday, February 13, 2006 at 8:15 a.m. EST in order to present Fourth Quarter and 2005 financial results and to discuss the details of this acquisition. To participate in the call, participants are asked to dial 719-457-2692 a few minutes before 8:15 a.m. EST on Monday, February 13, 2006. A replay of the conference call will be available at approximately 11:15 a.m. EST on February 13, 2006, and will run until 1:00 a.m. EST on February 22, 2006. The replay can be accessed by dialing 719-457-0820. The access code for both the conference call and the replay is 6213314.
