Robotics, automation to play a ‘fundamental role’ in Icon’s continued success: Q2 earnings call
“Fueled by strong outsourcing trends and a buoyant by a funding environment, market fundamentals remain very positive for the CRO industry,” said Steven Cutler, Icon CEO, on the company’s recent earnings call.
Cutler said there has been strong market demand across all of the contract research organization’s (CRO) business segments, citing ongoing execution of strategic plans as a contributor to a year-on-year growth of 10%.
Reported revenue for the Q2 2018 was $641.6m. Full-year 2018 revenue is expected to move from a range of $2.52bn to $2.64bn, to a range of $2.56bn to $2.64bn.
In response to strong business, Cutler said the company needs to ensure it has the staff in place “to cater for the ramp-up in operational activity levels.”
Icon’s headcount grew to 13,650 employees in the second quarter, which is an increase in staff of more than 1,300 employees year-over-year, though approximately half of these employees came in part from the Mapi acquisition in July 2017.
“We expect to grow and we expect to bring the people on at about the rate of revenue post of what we're going to pursue,” Cutler said. Additionally, he noted that the company continues to broaden its customer base and has seen new opportunities for both full service and functional services businesses during the quarter.
Icons also recently expanded its PMG network to include the DuPage network of sites. Cutler said the company is currently looking into other similar networks in North America. Next, it will look to Europe. “We've been actively looking in Europe for a network that we would be able to acquire,” he explained.
Progress is expected within the next 12 months, though Cutler hopes it will be earlier.
Robotics and process automation: A medium- to longer-term play
Icon is evaluating the potential opportunities for robotics and process automation through a series of internal projects.
“We believe that there are several areas in the clinical trial process which lend themselves to further efficiencies through the use of robotics process automation, starting with the digitalization of protocol, and the creation of data capture tools as well as testing and validation of applications,” said Cutler.
Additionally, within its global business services environment, he believes there is an application for robotics in routine tasks. Cutler cited a demonstration of how the company is improving the designation, categorization, and filing of follow-up letters to monitoring reports.
“A simple thing enough, but a robot can do this in a minute,” he said, adding that per its calculations, it takes a person six minutes.
Though the benefits are not just in terms of reduced costs: “being faster and being more up-to-date for audits gives us a quality angle as well as an efficiency angle.”
While a “longer-term play,” robotics and automation is part of the company’s strategy and an area of focus, he said.
“I fundamentally believe that the clinical trial process is too clunky and too expensive … We need to be part of the solution there, in making it more efficient, more effective,” Cutler added. “I think the robotics is just one aspect of what we can do to improve that and we have a responsibility, and I think an obligation, to do it.”
As for partnerships, Cutler said the company is looking “who’s out there.”
“But we're looking at who are the right partners and what are the right organizations and what are the right technologies,” he said, though he notes it is early in the process.
“This is not something that's necessarily going to be implemented within the next quarter or two. As I say, it's a medium- to longer-term play,” Cutler explained. “But we do believe it has a fundamental role to play in our continued success.”
The robotics and automation discussion will be expanded – with potential technology demonstrations – at the company’s Analyst Day next month.
