We all know that the pharmaceutical industry is huge in the U.S. The whole reason why there are so many young biotechnology companies working on new drug treatments is that there is a big payoff if they discover a winner.

I've always had a difficult time picking early-stage pharmaceutical or biotech stocks, partly because I don't understand the science, but also because it is difficult for these companies to deliver a sustainable track record of success to stockholders.

Many of these kinds of stocks can be one-time wonders. In many cases, it is pure chance that stock market speculators own the right one at the right time.

So, I've been thinking for quite a while about how to play this massive sector of the U.S. economy and I've come across an interesting company serving the pharmaceutical industry. It isn't a drug discovery company, but rather it helps drug discovery companies manage what their doing.

The company is called Phase Forward Inc. (NASDAQ/PFWD) and it sells data management solutions to drug companies so they can better manage clinical trials and drug safety issues. The company sells solutions for electronic data capture (EDC), clinical data management (CDM), and adverse event reporting (AER) to help pharmaceutical, biotechnology, and medical device companies bring drugs to market faster and more safely.

Phase Forward's services have been used in over 10,000 clinical trials involving more than one million clinical trial study participants at over 220 organizations and regulatory agencies worldwide. The company works with some of the biggest, most well-known pharmaceutical companies and it also boasts a solid track record of success.

The company's revenues for its latest quarter, the third quarter of 2005, grew 17% to $22.2 million. Net income during the quarter was $2.2 million, or $0.06 per diluted share, compared to a net loss of $95,000, or $0.00 per share, during the third quarter of 2004.

I really like discovering small companies when their businesses turn from operating losses to bottom-line profits. Phase Forward, it would seem, is an alternative way to play the high-risk, super speculative biotech market. It isn't fancy, but the business just seems to work.