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ICON plc
Investor UpdateMarch 2006
2 www.iconclinical.comwww.iconclinical.com
Certain statements contained herein including, without limitation, statements
containing the words “believes,” “anticipates,” “intends,” “expects” and words
of similar import, constitute forward-looking statements concerning the
Company's operations, performance, financial condition and prospects.
Because such statements involve known and unknown risks and uncertainties,
actual results may differ materially from those expressed or implied by such
forward-looking statements. Given these uncertainties, prospective investors
are cautioned not to place undue reliance on such forward-looking statements.
The Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise.
Forward Looking Statements
3 www.iconclinical.comwww.iconclinical.com
Global, full service Contract Research Organisation
(CRO) providing comprehensive outsourcing
solutions and services in Phase I – IV Clinical
Research, for the Pharmaceutical, Biotech and
Medical Device industries.
ICON plc – NASDAQ: ICLR
4
Investment HighlightsInvestment Highlights
Top global CRO
Strong market fundamentals
Outstanding record of organic growth
Strong balance sheet
Growth accelerating
Margins expanding
5
Company OverviewCompany Overview
>$350 million in annualized net revenues
5 Year Net Revenue CAGR = 23%
4th Largest CRO in Phase II – IV
Global coverage - 41 locations in 27 countries
Unique operating model with focus on quality and flexibility
> 3,000 staff worldwide
Note Change of Year End to 31 December
6 www.iconclinical.comwww.iconclinical.com
Global Full Service Clinical Development
Pre-clinical Phase I Phase II Phase III Launch Phase IV
6% Drug Development and Regulatory Support
5% Phase I
13% Data Management & Statistical Consulting
2.5% Contract Staffing
2.5% Central Imaging Lab
4% Interactive Technologies
9% Central Laboratory
58% Trial Management, Monitoring & Pharmacovigilence
7
Market Environment
8
Strong Market Environment with….
Fundamental R&D Spending Growth Trend ~ 10% p.a.
Phase II / III pipelines strengthening
Increased Outsourcing
Growth c.15% p.a. since 2001*
Being accelerated by activity & funding in Biotech / Speciality
Evidence emerging that projects where CROs are engaged complete faster than “internal only” studies*
Regulatory Environment
Globalisation favouring large CROs
www.iconclinical.comwww.iconclinical.com*Source: Tufts Centre for Study of Drug Development
9
Source : Pharmaprojects
www.iconclinical.comwww.iconclinical.com
…. Improving Pipelines,….
(% growth in # of projects v prior year)
-2%
0%
2%
4%
6%
8%
10%
Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q305 Q405
Phase II Phase III
10
… while US Biotech Funding Environmentcontinues to grow, leading to…..
$16.4
$38.9
$19.5$17.9
$25.3
$30.8
$34.5
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
1999 2000 2001 2002 2003 2004 2005Source: Burrill and Company
$Bil
lio
n
Biotech fund raising ($bn)
11
…Mid-Size, Biotech and Specialty Pharma being increasingly significant customers of ICON.
www.iconclinical.comwww.iconclinical.com
Currently estimated to be more compounds in development in biotech/specialty than in all of Top 20 Pharma
58% of awards came from such companies in last quarter.
0%
10%
20%
30%
40%
50%
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005
% o
f IC
ON
re
ve
nu
es
21%26%
35%39% 40% 42%
12
As a Result, Major CROs Quarterly Net Bookings* are trending upwards …
$1.21$1.35
$1.56
$1.27$1.41
$1.17$0.98
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
Q2 '04 Q3 '04 Q4 '04 Q1' 05 Q2 '05 Q3 '05 Q4 '05
$Bil
lio
n
Source: Company Reports; Bear Stearns
* includes Quintiles, PPDI, Covance, Parexel, ICON
13
…with ICON’s Net New Business Wins growing strongly…
$140m
$122m
$101m$106m
$120m
$46m
$91m$91m
$30m
$50m
$70m
$90m
$110m
$130m
$150m
Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
1.2
1.5
1.2
1.41.3
1.6
0.6
1.2
Net Business Wins
Book to Bill Ratio
14
…leading to ICON reaching record total Backlog levels.
$568
$633
$528$509
$488
$453$464$450
$427
$200
$300
$400
$500
$600
$700
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 FY06 Q2 FY06
$ m
illio
ns
15
Strategy
16
ICON’s Broad Strategy is to ……
Capitalise on market fundamentals to drive organic growth.
Expand geographic footprint
Cross-sell our services to grow sales further and increase margins
Pursue acquisitions to enhance depth and scale of current operations and to add additional complementary services
17
Cross-sell to leverage client relationships and capture more of the project spend.
Strategic ProductDevelopment /
Consulting 6%
Strategic ProductDevelopment /
Consulting 6%
Clinical Trial ManagementPhase II – IV
58%
Clinical Trial ManagementPhase II – IV
58%
Phase I5%
Phase I5%
Central Laboratory
9%
Central Laboratory
9%
IVRS4%
IVRS4%
Contract Staff2.5%
Contract Staff2.5%
Central Imaging Lab2.5%
Central Imaging Lab2.5%
Data Management &
Biostatistics13%
Data Management &
Biostatistics13%
18
Examples of some detailed strategic initiatives
Creating Therapeutic Specialist Groups (TAGs) in key therapeutic areas to leverage our experience and build further scale e.g. Oncology
Recent offices opened in Warsaw, Milan, Santiago, Beijing, San Diego
Investing in Operations in Japan – significant opportunity for growth over next 10 years
Creation of Data Management Operation in India – now 50 people and growing
Partnership with Medidata Solutions in EDC – gaining traction
Developing specialised Phase IV Division
19
Financial Performance
20
Recent Financial Performance ($millions, except EPS)
FY ’06 FY ’05 FY ’06 FY ’05
Net Revenue 88.1 79.5 174.0 157.8
Direct Costs 48.7 43.7 96.0 86.1
SG & A 26.8 25.5 53.6 48.9
D & A 3.5 3.3 6.9 6.4_____ _____ _____ _____
Operating Income 9.0 7.0 17.4 16.5
Net Income 7.0 5.8 13.3 13.1_____ _____ _____ _____
EPS 49c 41c 94c 93c
Weighted Average no. of Shares
14.3 14.1 14.2 14.1
3 mths to Nov 6 Mths to Nov
21 www.iconclinical.comwww.iconclinical.com
$116
$157
$226
$297
$327
$390
$0
$100
$200
$300
$400
FY2001 FY2002 FY2003 FY2004 FY2005 2006(E)
Mil
lio
ns
Net Revenue CAGR of 29% over last 4 Years, and strong growth forecast for 2006….
CAGR 29%
22
$296m
$279m
$262m
$252m$248m
$224m
$238m$241m
Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
… underpinned by strengthened forecast of value of Backlog to be earned in the next 12 months. (US$, & % of Forecasts)
76%
71%70%71%70%
67%
70%
66%
23 www.iconclinical.comwww.iconclinical.com
$0.92
$1.16
$1.50
$1.88$1.70
$2.25
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
FY2001 FY2002 FY2003 FY2004 FY2005 2006 (E)*
Earnings Per Share Growth
* Calendar Year guidance issued January 10, 2006
(E)
24
Improving Margins
25
8.8%
7.3%
8.6%
9.7%10.2%
Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
Quarterly Operating margins have been improving….
26
12.2%
10.2%
11.7%
12.7% 12.8%
Q2 2005 Q3 2005 Q4 2005 Q1 FY2006 Q2 FY2006
… driven by expanding Clinical margins as revenue growth has accelerated. These should continue to improve through 2006
27
Simultaneously, Lab losses are reducing, with breakeven forecast by end 2006, and profits in 2007….
-$0.3
$0.0
-$0.5
-$0.9
-$1.2
-$1.6
-$2.1
-$1.8-$1.9
($2)
($1)
($0)
Q2 05 Q3 05 Q4 05 Q1 FY06 Q2 FY06 Q1 06(E) Q2 06(E) Q3 06(E) Q4 06(E)
$ m
illio
ns
Lab Losses
28
…As Lab revenues grow …. $Millions
$8.1
$7.2
$6.1
$6.4$6.5$6.5
$5
$6
$7
$8
$9
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06
$ m
illio
ns
29 www.iconclinical.comwww.iconclinical.com
…driven by strong Lab net new business wins…
Net Business Wins Book to Bill Ratio
$10.8$12.0
$4.9
$11.3
$6.9
$9.3
$11.8
$21.6
$18.6
$12.9
$0
$5
$10
$15
$20
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06
$ m
illi
on
s
1.9
1.51.4
1.9
2.6
1.1
3.5
1.6
0.7
1.8
30
Investment HighlightsInvestment Highlights
Top global CRO
Strong market fundamentals
Outstanding record of organic growth
Strong balance sheet
Growth accelerating
Margins expanding