Icon posts solid quarterly results, sees stock rise 10%

By Zachary Brennan

- Last updated on GMT

The ICON CEO, Ciaran Murray
The ICON CEO, Ciaran Murray

Related tags Revenue

Dublin-based CRO Icon saw its quarterly net revenue, backlog and income rise over the same quarter last year, all of which helped to boost its stock by about 10% on Wednesday.

The company’s position in the market has helped it to book $1.8bn of new business, to grow its backlog by 16% to $3.6bn and drive revenues by 13% to over $1.5bn.

CEO Ciaran Murray told investors Wednesday that he’s encouraged by the new clients added to the company’s roster, as well as the increased presence in the mid-market and biotech sectors, which could drive future growth and provide better balance.

The improved mix in clients comes as Icon previously relied heavily on its top client -- Pfizer, though Murray added that work with Pfizer is “stabilizing and leveling off now​.”

As far as the company’s book-to-bill, which one analyst described as “extraordinarily stable​,” Murray said: “I suppose we have a good deal of visibility with our strategic accounts and our win rate has stayed steady​.”


An increasing number of specialty and biotech drugs will be outsourced and market share will continue to shift to global CROs, Murray predicted, noting that Icon is “well positioned to capitalize on this growth​.” Murray added that an “increasingly important trend​” is the need to demonstrate product value and Icon is seeing growth in its service offering centered on this trend.

Risk-based monitoring is also become more accepted by the industry, Murray added, noting that the company is adding more long studies into its backlog -- “looking forward, we’d expect the burn rate to level off…but you can never be entirely sure​,” he said. Margins will also continue to grow in 2015 to over 16%, he added.

COO Steve Cutler added there are some opportunities in the central labs space because of the Covance-LabCorp merger, noting Icon is “optimistic in terms of what those opportunities will bring​.”

He also noted that the company is seeing “good traction in the medical device industry,” which Cutler compared to the pharma market 20 years ago.

As far as strategic partnerships go, Murray seemed to indicate that the larger deals have been made. “The larger CROs have their partners…I wouldn’t expect any massive activity that we saw a couple of years ago​,” he added.

The company is also now building a next generation informatics hub, as well as a global innovation center in Ireland, to enable faster access and better insight into drug development data.

In terms of the company’s full year 2015 revenue guidance, Icon expects it will be in the range of $1.61 to $1.675bn, representing growth of 7-11%. This includes the recently announced acquisition of MediMedia Pharma Solutions​. Earnings per share guidance is in the range of $3.45 - $3.60, an increase of 20-25%.

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