IT spend helps Icon win two big deals with non-strategic clients

By Nick Taylor

- Last updated on GMT

Related tags: Pharmacology

IT spend helps Icon win two big deals with non-strategic clients
New business awards at Icon soared in the first quarter after IT investments helped it win two big deals with non-strategic clients.

In the first three months of the year gross new business wins grew quarter-on-quarter by one-third to $485m (€367m), although cancellations knocked $100m off. Strategic clients accounted for some of the business but Icon also inked two big deals with sponsors with which it has small relationships.

Two large traditional wins were booked in the quarter.Both contracts span five to seven years in duration​”, Eric Coldwell, equity analyst at RW Baird, wrote. One of the contracts marks the first time Icon has done any significant clinical trial work for the client, although it has provided other services.

Icon has done clinical work for the other client but nothing on the scale of the new contract. “This is significant in just the size and the therapy it addresses​”, Ciaran Murray, CEO of Icon, told investors.

Murray attributed the wins to information technology. “The company pointed to robust clinical IT solutions, Firecrest on the front end and Iconik on the back end of trials, as a key differentiator in its ability to accelerate business wins this quarter​”, John Kreger, equity analyst at William Blair, wrote.

Investments to acquire Firecrest and build Iconik have helped Icon automate aspects of clinical trials. Having spent on these and other capabilities in recent years Murray sees no need to up IT investment in the near term but will continue to “stay abreast and ahead​” of technological developments.

I think the role of big data in clinical trials…is going to be a significant driver in the future​”, Murray said. Big data will also play a role in another area Icon is considering strengthening – genomics.

Making investments

Murray discussed genomics in relation to the clinical pharmacology business, which broke even for the first time in three years. In some quarters since then the unit has lost $2m to $3m but inking a few big deals has given it a steadier source of income.

Icon is targeting break even for the next few quarters and will then look to grow. Investments in niche capabilities, such as genomics, are planned. An analyst asked about investing in Phase I scale, possibly referring to Cetero, but Murray said he is happy with the footprint at Icon.

Performance at the central laboratory is also improving, after breaking even last year, and it booked $32m of new business in the quarter, although it also faced a $16m cancellation. To continue sales growth Icon is planning investments.

I think as we see the market grow over the next couple of years in territories where our footprint isn’t as strong in the lab, I think we will see the need to invest, particularly in Asia-Pacific​”, Murray said.

Related topics: Clinical Development, Phase III-IV

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