icon plc 28th annual j.p. morgan healthcare conference january 2010
TRANSCRIPT
ICON plc28th Annual J.P. Morgan Healthcare ConferenceJanuary 2010
Forward Looking Statements
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.
This presentation includes selected non-GAAP financial measures. For a presentation
of the most directly comparable GAAP financial measures, please refer to the Quarter
3 2009 press release consolidated income statement headed Consolidated Income
Statements (Unaudited) (US GAAP)
Global Service Offering
Global Full Service Clinical Development
ICONs Global Footprint
Operating from 68 offices in 38 Countries
ICON Plc Staff Growth 1990 - Today
ICON Plc – Staff Educational Qualifications
Drugs in Development by Indication (#compounds)
ICON Backlog by Indication (Revenue)
Drugs in Development by Indication
Source – R&D Directions 9th Annual Report
ICON Phase II-IV Clinical Research
• Full range of Trial Management Services
• >5000 staff working on circa 400 studies with circa 100,000 patients in over 10,000 sites.
ICON Phase II-IV Clinical Research
• Electronic Data Capture (EDC)• Medidata Rave/Phase Forward/ Oracle Clinical RDC / Sponsor
systems• Deployed on c.280 current studies.• 2009 c.160 wins v’s 2005 c.17 wins
• Interactive voice response systems (IVRS)• Patient enrolment, randomisation and management in 850 projects
over 50,000 sites.
Technology in Trial Management
ICON Laboratories
• Capabilities in:• Bio analytical Lab• Bio-marker Lab• Global Central Lab
• Global Lab footprint in key global regions, including the US, UK, Singapore, India and Ireland.
• All ICON laboratories are either GCP or GLP as well as CAP accredited.
• Our BA labs have over 1,500 assays developed in support of over 2500 studies.
ICON Laboratories
ICON Early Phase Testing
• Capacity in excess of 200 beds in the US and UK
• ICON is collaborating with the Central Manchester University Hospitals Foundation to develop a purpose-built translational medicine facility which will be open in 2010.
ICON Early Phase Testing
ICON Medical Imaging
• Market Leading positions in Oncology and CEC based on own proprietary Imaging Management Platform
• Provides world class solutions in the development of imaging biomarkers that support drug development
• Over 100 FDA submissions
ICON Medical Imaging
DOCS (Contract Staffing)
Core Services:
• Functional Resourcing
• Flexible Resourcing Services
• Permanent Recruitment Support
• Training & Development Programs
DOCS (Contract Staffing)
Market Environment
Opportunities…. but also Risks
No of Compounds in Development
* Source :Pharmaprojects
Each 3% Increase in Outsourcing Penetration Drives a 9% Increase in the CRO Market
$26
$74 $74
$36$36$24
R&DSpend
CROMarket
R&DSpend
CROMarket
Bil
lio
ns
Development
Research
Market Penetration
32.4%
Market Penetration
35.4%
9%
Total Biotech Funding ($ Millions)
* Source :Burrell and Co
CRO Market Size 1996 – 2012 (E)
ICON in this Market Environment
New Business Wins and Net Book to Bill Ratio (NB:B)
Net Business Wins
ICLR NB:B (12 Mth Avg.)
Peer NB:B (12 Mth Avg.)
Gross Business Wins Source: Jefferies & Co.
Analysis of Backlog by client type Q3 09
Total Backlog Level ($ Millions)
+6% YoY
Value of backlog forecast to be earned in next 4 quarters
Coverage of next 4 quarters from Backlog
Opportunities…. but also Risks
Strategy
• Build Deep Strategic Relationships
• Create Stronger differentiation across our services
• Retain a flexible business model to respond to
differing client outsourcing strategies
• Build scale in early phase development
• Build scale in post approval business (Phase IV)
• Enter new/grow position in selected markets
ICON’s Strategy
Quality
Quality and Delivery remains our Key Focus.
35
2007 20082009
(to End Sept)
Regulatory Audits 3 3 9
ICON Internal Audits 863 870 836
Client & ISO Audits 255 219 194
Total 1121 1092 1039
We live Quality internally
Financial Performance
CAGR 28%
Net Revenue CAGR of 28% since 2005
* Guidance range issued October 21st 2009
Mill
ions
EBITDA Margin Progression
EBIT Margin Progression
(9 Mths to Sept.)
CAGR 37%
Earnings Per Share Growth
* Guidance range issued October 21st 2009
FCF
Free Cash Flow
* Estimate assumes DSO of approx 60 days. Historic periods FCF exclude Dublin Campus construction costs
Return on Equity
Summary Balance Sheet and Cash Flow($ millions)
9 Mths endedSept 31, 09
Full Year endedDec 31, 08
Cash $173.0 $101.1
Debt $28.0 $105.4
Net Cash/Debt $145.0 ($4.3)
Total assets $922.1 $867.3
Total Liabilities $381.3 $410.9
Shareholder’s equity $540.8 $456.4
Cashflow from operations $198.4 $81.3
Capital expenditures $26.0 $67.9
ICON
S&P 500 Nasdaq Composite
ICON Plc Historic Share Price Performane
• Top Global Clinical CRO - #4
• Deep customer relationships
• Quality of staff
• Experienced Management team
• Excellent Reputation
• Solid market fundamentals
• Outstanding record of growth
• Strong balance sheet
Investment Case Summary