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Several banks initiate coverage of Medpace citing customer base

Posted by on 05 June 2024
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US contract research organization (CRO) Medpace attracted the financial sector’s attention with several analysts predicting its biotech customer base in particular will help drive growth.

The Cincinnati, Ohio-headquartered trials contractor became a hot topic after Mizuho Bank, TD Cowen, Deutsche Bank Aktiengesellschaft and others issued positive opinions and initiated coverage, citing the firm’s small and mid-sized customers as key.

Several other observers – including Guggenheim Investments, Robert Baird and UBS Group – increased their full year earnings and revenue forecasts for Medpace according to analysis by the Marketbeat newswire.

In April Medpace revealed that although its revenue in the first quarter increased 17.7% year-on-year to $511 million, the total was short of expectations due to reimbursable costs being lower than anticipated.

Despite this, the CRO maintained its prediction that revenue will be in the $2.150 billion to $2.200 billion range this year, representing growth of 14.0% to 16.7% over 2023. In addition it said EBITDA would be between $415 million and $445 million for the full year.

Customer base

Medpace’s customer base includes a mix of small, medium and large drug developers – although it describes itself as the “partner of choice for small and mid-sized biopharmaceutical companies.”

According to the CRO’s annual report while no single customer represented 10% or more of net revenue in 2023, the firm derived approximately 29.5% of its net revenue from its top ten customers.

Medpace also revealed that 78% and 18% of its net revenue was derived from small and mid-sized biopharmaceutical companies, respectively.

CEO August Troendle also sees biotech as a growth opportunity thanks to the increased availability of funding.

He told analysts on Medpace’s Q1 call “We still have some clients that are struggling and so that hasn't changed, but there is a very strong also business environment with opportunities, good opportunities that are moving forward. So it remains somewhat of a mix.”

“There's always going to be clients in our client base. There's always going to be clients that are struggling for funding, but I think overall things are much better than last year and are continuing to improve. So, I think it looks good for the year in terms of opportunities, we just have to win them.”


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