North Carolina-based Fortrea saw revenue grow in the third quarter - its second quarter as an independent clinical research organization (CRO) - driven by growth of its clinical trial and services divisions.
Revenue for Q3 was $776.4 million, up from $762.3 million in 2022 when Fortrea was still part of Lab Corp. The contribution from trial services was $711.7 million – up 2.1% - with the remainder coming from the firm’s enabling services unit.
In addition, Fortrea reported a backlog – a measure of anticipated service from contracted work that has not been completed - of $7,129 million and book-to-bill ratio – roughly a measure of supply and demand - for the quarter was 1.24x.
CEO Tom Pike cited Fortrea’s financial performance as evidence the newly founded CRO is attracting drug industry interest.
“Customers are responding positively to the Fortrea team and the improvements we have made, as our normalizing book-to-bill ratio demonstrates. Our transformation continues and we must make selective investments, exit transition services agreements with our former parent and make the necessary changes to meet industry expectations of cost structure.
He added, “We are building our pipeline of opportunities and shaping our organization to meet what’s next and needed in clinical development, advancing our mission of bringing life-changing treatments to patients faster.”
This shaping process has seen Fortrea expand its clinical pharmacology division through investments at sites in the UK and US and team up with artificial intelligence (AI) developer Medidata in a deal design to help its trial recruitment activities.
More recently, Fortrea agreed a long-term collaboration with Evinova, the new AstraZeneca digital clinical trial technology services unit.
For the full year Fortrea expects revenue to be in the $3,075 million to $3,130 million range, an increase of between 0.7 and 1.1% of that generated as part of Lab Corp in 2022.