NEWTON, Mass. – Phase Forward Inc., a provider of Internet-based clinical trial data collection and management solutions, closed an $8 million second round of venture financing in early November.
The lead investor was Sprout Group, which joined existing investors Atlas Venture and North Bridge Venture Partners. Sources declined to give details on the size of each firm’s commitment.
Ron Hunt, an associate at Sprout who has worked as a consultant and venture capitalist in the pharmaceutical industry for 13 years, became the company’s fifth board member.
Phase Forward’s Internet-based solutions compete against traditional and client-server systems and allow sponsors of clinical trials to have access to trial data in real-time, thereby accelerating the delivery of new drugs and medical devices.
The deal was consistent with Sprout’s focus on investments in information technology solutions that target the pharmaceutical industry, Mr. Hunt said. Sprout also expected that Phase Forward’s products would find a strong uptaking among pharmaceutical and medical devices companies. “The industry is really ripe for an information management tool that would take the cost out for the customer,” he explained.
Phase Forward will use the funds from the latest round to expand marketing and client support services for its customers around the globe, said Shiv Tasker, the firm’s chief executive officer and president. He expects the current 10-member support staff to double by the end of 1999. Strengthening global marketing and support was important because the company’s clients – large pharmaceutical and medical device firms – often are headquartered outside the United States, and drug testing often involved people in different parts of the world, Mr. Tasker said.
Under current business conditions, the capital raised in this round should last for at least 18 to 24 months, he said.
Phase Forward’s first round of financing, led by Atlas, closed in November 1997 and brought in $4 million. Atlas is represented on the board by General Partner Richard D’Amore and North Bridge by General Partner Christopher Spray. The company used the money to build its product and launch the company, Mr. Tasker said.