Quintiles CEO Tom Pike told investors last week that the company is seeing “very strong demand from the larger pharmaceutical firms because their pipelines are full right now,” and at the same time, small biotech, with their plethora of funding, are starting to come calling.
For the first half of 2014, Quintiles found nearly 61% of its net new business coming from the top 20 pharma companies, compared to about 46% the same period last year. In addition, the company’s biotech and emerging pharma bookings in the first half of this year were more than double the bookings in the first half of 2013.
The comments came as Quintiles announced nearly 10% revenue growth for Q2, which was buttressed by more than 15% growth in the company’s Integrated Healthcare Services segment.
Analysts seemed largely positive on the company’s quarter, with Citi Research VP Garen Sarafian increasing his expectations for the company for the rest of the year, which is “supported by Quintiles’ strong and steady backlog performance, its position as the world’s largest CRO, and continued favorable outsourcing trends.”
Pike stressed that Quintiles has a leg up on its competitors in their quest to bring in more of the smaller biotech partners. “We can bring a value proposition to the small biotechs that I don't think anybody else can match,” Pike said.
He noted that the company is negotiating a sole-source deal with a small biotech “that's very well funded,” as well as “another one that's deeply underway.”
Pike also told investors that he believes larger biopharma companies are probably going to stick with multiple partners, though they may try to keep the number of partners down to a minimum.
“I think in terms of large biopharma, they're going to tend to play with multiple players, but they are tending to continue to focus on a few players,” Pike said. “There are some things that are happening, for instance, some guidance that some of our customers are getting around risk-based monitoring, that you don't want to have a whole lot of CROs.
“How can you manage risk-based monitoring effectively with a whole lot of CROs that are causing them to think not only for efficiency reasons, but also to support regulator interest of having a lesser set of CROs, which, I think, plays favorably to the leaders in the industry.”
As far as the latest quarter was concerned, Quintiles said it found “strength” in its core clinical services in North America and Asia, for its new Novella business and Phase I early clinical development services.
“The bookings reflect strength for commercial services in North America and Japan, as well as continued strength in our observational real-world late phase business,” Pike said.
As for the rest of this year and the future, Quintiles’ pipeline of opportunities “remains at historical highs, which means our strong sales teams continue to generate and see a lot of opportunities,” Pike said. Underlying this, biotech funding “continues to be strong with 92% growth in funding for the first half of 2014 compared with the same period in the prior year…we continue to focus our efforts on providing emerging and midsized pharma with access to our broad range of solutions and expertise.”