Parexel sees Q2 revenue grow, but cuts 2011 outlook
For the three months ended December 31, 2010 Parexel’s total revenue was $364.05m, up from $337.98m in the comparable period in 2009, with income from operations leaping 51 per cent to $28.2m.
These gains were seen across all business units with its core clinical research services unit contributing $231.3m, up 4 per cent and medical communications arm generating $32, an increase of $3m.
Perceptive Informatics, Parexel’s eClinical and electronic data capture (EDC) wing, also grew, with revenue for the three month period reaching $41, up from $33m in the year earlier quarter.
However, despite the revenue and income gains, Parexel still cut its full year, fiscal 2011 earnings forecast to between $1.17 to $1.23 on sales of $1.22bn to $1.24bn, down from $1.23 to $1.31 per share and $1.27 to $1.31bn.
The firm, like many of its CRO peers, has formed collaborations with Big Pharmas in recent months. Last month it partnered with Merck & Co’s BioVentures unit in a project focused on biosimilars.
Prior to that, the CRO partnered with a number of other Big Pharmas, including GSK, Eli Lilly and Bristol-Myers Squibb (B-MS).
But, while these deals seem to provide the stability of demand that has been missed by many other CROs in recent years, their complexity comes with its own complications according to Parexel CEO Josef von Rickenbach.
Von Rickenbach said: “It has become apparent that the backlog conversion rates inherent in global complex, clinical development awards generated by strategic partnerships are different from traditional awards.”
He went on to say that: “Our improved understanding of new business dynamics from these partnerships has been reflected in our current forward looking guidance.”
The firm ended the three months to December 31, 2010 with a backlog of $3.0bn, up 30.9 per cent on the comparable period last year period, largely as a result of $496m in new business wins and a more level of cancellations than in previous quarters.