More CROs expected to go public, Parexel CFO says

By Zachary Brennan contact

- Last updated on GMT

 Among the potential CROs that could go public include PRA Health Sciences, PPD and INC Research
Among the potential CROs that could go public include PRA Health Sciences, PPD and INC Research

Related tags: Pra health sciences, Contract research organization, Corporation

Parexel’s future course may depend on  the outlook of competing CROs (contract research organizations), a couple of which could potentially go public in the near future, Ingo Bank, SVP and CFO of Parexel, said Wednesday at the Baird 2014 Healthcare Conference.

Although Bank didn’t reveal which companies he thought would lead the way, he seemed optimistic about the potential to see how more competitors are performing and what the potential market is like moving forward. Among the potential CROs that could go public include PRA Health Sciences, PPD and INC Research.

In addition to his prediction on CRO IPOs, Bank also said he believes pharma and biotech companies will accelerate their outsourcing rates to between 70-80% “based on a few clients already at that level and a few that are below that level​.”

The comments came as Bank described how he anticipates Parexel will grow its CRS (clinical research services) business, which he said is a function of growing market share and the degree to which the companies accelerate outsourcing.

M&A

Meanwhile, Bank stressed Parexel’s interest in new acquisitions, noting, “M&A is going to be a big part of the story going forward​.”

Although he didn’t reveal where or what types of companies Parexel is eyeing, he did mention that the company is seeing strong interest coming out of Europe in terms of strategic partnerships and “a lot of work coming out of Asia​.”

He added that the company is still seeing a high demand from small and medium biotech companies, noting that “strategic partnerships is basically the model that’s proven to be successful​.”

Bank also explained how IT will play into the game plans of “all successful CROs​.” He said CROs will have to have IT-enabled services “to integrate data, help with collection and summarizing and submitting proposals to the FDA​…it’s evolving, [and there’s a] huge opportunity out there​. If you look at what mobile devices will do, how patients and companies will collect data, we will see big changes – overall, we’re looking for not just technology but a service component as well​.”

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