Ken Nagy, CFA
DATA serves Complaint, Progress Continues
On June 6, 2011 DATATRAK (DATA) announced it has served a complaint for patent infringement on Medidata Solutions, Inc. for unauthorized use of DATATRAK’s intellectual property in the Medidata Rave platform. The patented technologies, as described in U.S. Patent No. 7,464,087, cover methods and systems for unifying data from a plurality of heterogeneous databases with each having business-context related data and a data access mechanism. DATATRAK’s lawsuit was filed in the United States District Court for the Northern District of Ohio.
DATATRAK International, Inc. is a global technology and services company delivering electronic clinical (eClinical) solutions to support clinical research. Its software suite and service offerings are used to collect, review, report, store and submit to regulatory agencies clinical trial data electronically. While the competition uses an integrated heterogeneous solution (information silos), DATATRAK uses a unified system. The result is seamless communication, optimized data flow and lower costs. The products within the information silos were never designed to work together and “Real time” communications per customers is more like 24 hrs…not bad, but if a patient in site #102 is having an adverse reaction and a similar patient at site #3 has the potential to suffer a similar event…the “not bad” could cost a life.
Progress Continues
DATATRAK’s unified system is clearly superior to integrated solutions. That said maybe the firm is not yet seeing explosive top–line growth right now because firm’s look at the financial power of a firm trading on the pink sheets. It is important to realize just how far DATA has come since 2008. Just three short years ago backlog was trending down, the firm was incurring losses, had a $3 million dollar balloon debt payment due, and cash flow was negative $1.8 million. Flash forward to the recently completed 2010 and the company shows backlog trending up, no balance sheet debt, a profit, and positive cash flow. As these metrics continue to improve the growth will follow. If you build it they will come. We would add shares at these levels.
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