Icon discusses strategic deals and ‘volatility’ in small biotech
Icon has reaffirmed its guidance for 2024 citing a growing roster of strategic deals with large pharma firms as well as signs an uptick in demand from smaller customers.
The CRO spoke about partnerships with larger companies on a call last week, with CEO Steve Cutler telling analysts one such deal with a “top 20” pharma - signed in Q4 - had created business potential in Phase I-IV studies in a number of therapeutic areas.
“Our depth of experience in longstanding and transformational large pharma partnerships was one of the key criteria for selecting Icon, as well as our collaborative approach in achieving meaningful efficiencies in their development programs,” he said.
Icon now has similar full service strategic deals with “a significant majority” of the top 20 pharma companies according to Cutler.
He suggested buying PRA in 2021 and other investments in automation helped Icon win these contracts
“We are a scale player now and our union with PRA [...] in the middle of 2021, has made a major contribution to that. I would say the people that we brought on have made a major contribution to our organization.
“And as a scale player within the clinical development space, we have the technology, we have those resources, that depth and breadth of capability, we have the platforms, the decentralized platforms, and that really gives us a ticket to the table pretty much every time now,” Cutler said.
In contrast, demand from smaller biotech customers was more muted in the final three months of 2023.
According to Cutler, who said “We did see some volatility in RFP activity across customer segments, as small biotech was somewhat muted toward the end of the year, with some companies continuing to be deliberate with their overall development spend decisions.”
RFP uptick
And while this pattern has continued into the first quarter of 2024, there are signs demand is increasing according to Cutler.
“Early in January on the RFP front, biotech was a little more muted, large pharma was strong. As we've gone into the first half of the first quarter of this year, we've probably seen the RFPs tick up and the environment sort of move up a notch.
“So we're not ready to declare victory and I'm not reporting the first quarter today, but we're seeing sort of mid-teens growth on the RFP opportunity.”
Icon reaffirmed the 2024 guidance it issued in January, predicting revenue in the $8.4 billion to $8.8 billion range.
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