Third Bridge Forum’s CRO Week: analysis of key market players

The Interviews focused on the following companies:

• Medpace Holdings – CRO Asset Evaluation, Competitive Analysis & Strategic Business Scalability Opportunities  
• Iqvia – Solutions Segment Breakdown & H1 2023 Growth Trajectory  
• PPD (Thermo Fisher) – Contract Research Service Assessment, Near-term Clinical Capitalisation Opportunities & Subsequent Market Positioning  
• Icon – Clinical Research Advancements & Q1 2023 Business Expectations  
• Syneos – Q4 2022 Performance Expectations, Competitive Positioning & Potential Acquisition Target  

Interview: Medpace Holdings – CRO Asset Evaluation, Competitive Analysis & Strategic Business Scalability Opportunities
Specialist: Former director at Medpace Holdings Inc

To kick off Forum’s CRO Week, we conducted an Interview on Medspace, during which a former director at the company said its decrease in book-to-bill ratio is a one-off situation. The expert noted that as competitors focus on analytical capabilities vs clinical trial management, Medspace is in a position to gain market share and strengthen its relationships with biotech companies. The specialist was also impressed by the quality of equipment displayed in Medpace’s in-house bioanalytical and imaging lab. 

At the same time, Medpace has the task of convincing clients it has the ability, personnel and communication skills to manage complex phase three studies as effectively as phase two studies. However, this is “where there is opportunity”, according to our Interview. An area of risk flagged by the specialist was smaller biotechs switching CRO vendors after being acquired by large pharma sponsors, such as Pfizer. 

Overall, specialists interviewed by Forum have noted that Medpace is one of the only CROs that has the capability to catch up with and garner market share from the incumbents. We also heard the pre-clinical space is a growth area for Medpace due to the improving funding environment. 

Interview: Iqvia – Solutions Segment Breakdown & H1 2023 Growth Trajectory 
Specialist: Former VP at Iqvia Holdings Inc

Iqvia is well positioned in the marketplace, at least relative to its competitors. The markets that the company sells into and operates into are expanding despite macro factors that are “significantly impacting other sectors”.

With Veeva’s contract with Salesforce ending in 2025, a former VP at the company said Iqvia could capitalise on this opportunity by working with Salesforce to make an orchestrated customer engagement (OCE) the Salesforce offering for pharma CRM. However, if Salesforce creates a pharma version for CRM, it would ultimately compete with OCE.

In other observations, the specialist noted that while Iqvia’s backlog could total USD 25.9bn-26bn as at end-2022, the company’s scale and global reach allows for routine absorption of cancellations without material impact. The company’s biggest headwind is the potential impact of wage inflation on bottom-line results, they added. 

We also heard Iqvia has strengthened its position in the functional service provider (FSP) space but could struggle to surpass competitor Icon due to their differing strategic goals. Nonetheless, the expert was impressed by published results from Iqvia’s decentralised trials (DCT) studies, with significant reductions across time to first patient in, protocol deviations and recruitment screening failure rates.

Interview: PPD (Thermo Fisher) – Contract Research Service Assessment, Near-term Clinical Capitalisation Opportunities & Subsequent Market Positioning
Specialist: Former director at Pharmaceutical Product Development Inc (PPD)

In this Interview on PPD, a former director highlighted PPD’s lag in the FSP space and inability to fill typical CRO study-related positions as two causes for concern. Additionally, the specialist noted that PPD’s lack of presence in APAC can be characterised as a headwind, adding that the company is not well equipped to compete with Iqvia for some time in the region.

As the lead investor in Medable and Science 37, PPD shifted to DCTs faster than competitors – but failure to meet revenue expectations is concerning. The expert also said the company’s potential move to support large pharma could be risky, noting “it could be a little bit dangerous for PPD […] they probably are more biotech-heavy than, say, Parexel, Icon, Iqvia.” 

Staffing was described as “a moderate risk” following excess pandemic-related work and “a tremendous amount of burnout”. 

Interview: Icon – Clinical Research Advancements & Q1 2023 Business Expectations
Specialist: Former EVP at Icon plc

As previously mentioned, Forum’s Interview on Icon suggested Medpace is the only mid-tier CRO able to catch up with Icon and larger CROs – but whether it can become truly global with its infrastructure remains to be seen. We also learned that no player has cracked the data code for patient recruitment, with the expert noting “data acquisitions have not transformed the Iqvias and PPDs, and Icon is not behind”. 

Although Icon might “overperform rather than underperform going forward”, the specialist does not expect “super- accelerated growth”. The company might report around “1.15-1.25” book-to-bill with minimal headwinds, according to our Interview. 

Meanwhile, the former Icon EVP estimated a 6-9 month window for customers to respond to Icon’s PRA Health Sciences acquisition, noting that 2-3 quarters of a constant book-to-bill would indicate “you’re through the cycle”. 

Interview: Syneos – Q4 2022 Performance Expectations, Competitive Positioning & Potential Acquisition Target
Specialist: Former EVP at Syneos Health Inc

Forum’s CRO Week concluded with an Interview on Syneos Health, during which a former EVP at the company attributed the considerable decline of its book-to-bill to lack of integration, substantial attrition and therapeutic talent drain – with no recovery in sight. But we heard the downmarket could “save the day” for Syneos, irrespective of the company’s book-to-bill. To compensate for the significant losses, the specialist speculated that the company has “gone into the market and bought some of that small-to-mid business to cover a portion of that large pipeline out of pharma that they’re no longer gaining access to”.

Additionally, the expert said Syneos lacks a stable clinical platform and trial management system, with a “frail” technical backbone. This is a “massive Achilles’ heel”, we were told, with Syneos lagging in the DCT space. We were also told that investing in human power in the commercial segment could be a “mistake” due to the IT infrastructure required for such a pivot.  

Given these challenges, we were told Parexel could be a natural suitor to acquire Syneos, and this could happen sooner rather than later. Parexel could integrate seamlessly and shore up large pharma relationships, our Interview revealed.