Piper Jaffray Downgrades Phase Forward (PFWD) to Neutral; Lack of Near-Term Catalysts

July 1, 2009 7:25 AM EDT

Piper Jaffray & Co. downgrades Phase Forward (Nasdaq: PFWD) from Buy to Neutral.

Piper analyst says, "GlaxoSmithKline (NYSE: GSK) signed a multi-year renewal agreement for PhaseForward's InForm Electronic Data Capture System. GSK is PFWD's largest customer, accounting for 12% of revenues in 2008. GSK has initiated almost 600 Clinical Trials on InForm since 2005. Good news because it eliminates the threat of uncertainty. This contract was up for renewal in August, so the announcement eliminates near-term uncertainty surrounding a timely renewal announcement. The renewal was largely expected because GSK is very happy with PFWD, and they recently announced a multi-year hosting agreement with GSK in December, 2008. The big question was whether or not the love fest would expand to include Clarix, the IVR/IRT system bought by PhaseForward last year. Unfortunately, it did not, GSK has their own internally developed system that they will continue with for the foreseeable future. Management's tone regarding Clarix cross selling timing at the analyst day last week was a precursor to this announcement, in our view...Downgrading to Neutral on lack of near-term catalysts, caution on macro environment, and valuation. Based on management's comments at the Analyst day, combined with no expansion at GSK, it's unlikely we'll see upside to numbers this year."

To see more analyst ratings on PFWD Click Here.

Phase Forward Incorporated is a provider of integrated enterprise-level software products, services and hosted solutions for use in the global clinical trial and drug safety monitoring activities.

Related Categories

Downgrades

Stocks Mentioned

Related Entities

• Piper Jaffray

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?