Parexel sees signs of recovery in Q2 figures
pharmafile | February 2, 2010 | News story | Research and Development |Â Â CRO, ParexelÂ
Contract research organisation Parexel International’s second-quarter net profit fell 34% to $3.5 million on restructuring and investment-impairment charges, but still managed to come in ahead of analysts’ estimates.
Service revenues for the quarter ended December 31, 2009, were $285 million, up 3%, and the company says it believes the market for its services is starting to recover after a difficult few quarters for the CRO industry as a whole.
Parexel chief executive Josef von Rickenbach said the company is currently sitting on a backlog (orders booked but not yet fulfilled) of $2.31 billion, with most of the quarter’s new wins coming from large pharmaceutical companies.
“There are promising signals in the broader market,” he told a conference call. These included the completion of most of the big pharma mergers that have put a brake on signing off of new clinical projects, and an increase in strategic outsourcing deals between pharmaceutical companies and CROs.
He also cited the return of funding for small and mid-sized biopharmaceutical companies and a “heightened focus” among its clients in moving compounds through the later stages of drug development.
Like many of its peers in the CRO sector, Parexel has been hit by high rates of cancellations and slower orders, and has taken the opportunity to cut back on costs by reducing headcount and downsizing facilities which led to charges of $14.3 million in the quarter. Another $14 million-charge is expected in the third quarter from this programme.
“We have been able to use this down cycle to better streamline and position the company, and … are ready to capitalise on improving market conditions,” said von Rickenbach.
Among Parexel’s divisions, eClinical unit Perceptive Informatics, which was boosted by the acquisition of UK firm Clinphone in 2008, was a “bright spot” and achieved revenues of $33 million in the quarter.
The division benefitted from the launch of an integrated version of its electronic data capture (EDC) and clinical trial management services (CTMS) software in June 2009, he said.
Von Rickenbach also said that Parexel’s Asia-Pacific business had done well, particularly from picking up Asian components of multiregional clinical programmes, and now accounts for 12% of the overall business from 8% a year ago.
“We continue to expect that the Asia-Pacific region will be our fastest growing region this calendar year,” said von Rickenbach.
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