Icon has followed up an impressive set of Q3 results and plans to delist in Ireland with the announcement of a new FSP focused strategy.
The contract research organisation (CRO) launched the new service earlier today, explaining that the idea is to make the oversight, training and resourcing systems used by its DOCS staffing division available through the functional service provider (FSP) model.
DOCS president Colin Stanley said: “Functional resourcing and FSP continue to grow in popularity as sponsors look for innovative outsourcing strategies that enable them to gain efficiencies and accelerate the development of their pipelines.”
Specific details of the service have not been announced and Icon had not responded to Outsourcing-pharma.com’s request for more information at the time of publication.
Nevertheless, Icon’s efforts to emphasize this part of its offering supports the idea that although strategic deals – such as the Irish CRO's own with Pfizer - dominate the sector, they do not necessarily mean the end for functional outsourcing.
Earlier this year Tim Evans, senior analyst at Wells Fargo, said: “The FSP model is alive and well,” citing inVentiv’s acquisition of Kforce Clinical Research (KCR) as evidence.
Similarly, John Kreger, equity analyst at William Blair, said that: “There is still plenty of momentum for functional deals, particularly among the top 20 pharma segment, with Eli Lilly, Merck & Co, and Sanofi as three notable examples.”
Q3 results and listing
The FSP launch follows just days after the Icon posted a positive set of third quarter financials that saw revenues increase 18.6 per cent to $285.5m, operating margins improve thanks to recovering demand for central labs and $450m worth of new business.
Icon’s third quarter performance with generally well received. Ross Muken from ISI Group described the CRO’s performance as ‘excellent,’ particularly the new business won in the period which he said was broad-based.
William Blair’s Kreger was also impressed. He said: “Icon reported encouraging improvement in the third quarter, as revenues increased 18.6% from last year…We are encouraged that margins continue to improve and that guidance remains unchanged for 2012.”
Icon’s plan to leave the Irish Stock Exchange and proceed with full listing on the US NASDAQ exchange was also welcomed, with Muken suggesting it “will allow for more flexible share repurchases and will also allow ICLR to be included in more indices, improving liquidity and investor focus.”