Troubles at ETWC and DATA : Is the EDC Mid Tier about to be cleared out?

Troubling times for two long-term players in the Electronic Data Capture space. Veteran DataTRAK (Nasdaq:DATA) looks to be sliding toward a meltdown with it's stock hovering around $0.30. The company is actively looking for a buyer.

Meanwhile etrials (Nasdaq: ETWC) has what has been described as a "revolving door" in senior management and despite more encouraging results is still making losses and is facing pressure from shareholders to provide more value through merger or acquisition. At this stage, with dwindling reserves and ongoing losses a acquisition seems highly unlikely and/or risky.

Both companies have been in the Electronic Data Capture market for a decade or more and though they appear to have lost out in recent years to Medidata and PhaseForward are still considered to have good systems.

Are we about to witness a house-clearing of EDC old-timers? If either (or both) of these companies are forced to merge with larger entities (CROs? ClinPhone's recent acquisition comes to mind) it will create a considerable vacuum in the mid-tier of the market. You might argue that a merger/buyout could inject new life into these companies but the resulting disruption to their operation and management would likely stall them further. Remember CB Technologies? They were acquired by a CRO, where are they now?

The disappearance of ETWC and DATA from the mid tier could lead to rapid expansion of other players. Companies like TrialStat and NextTrials probably stand to gain the most but it is also likely that a nimble player from the lower tier will have its chance to move into the vacuum created by their absence.