Another CRO heads to Wall Street as INC swings for $150M

Following a trend among the companies that do Big Pharma's heavy lifting, global CRO INC Research has filed to go public, looking to raise $150 million.

The company, headquartered in Raleigh, NC, has yet to specify how many shares it will offer and at what price, saying only that it plans to trade on the Nasdaq under "INCR." That $150 million figure could well change, too, as INC's initial filing uses it solely to calculate a registration fee. The company intends to spend its proceeds on redeeming all its outstanding notes and pay the related fees and expenses.

INC specializes in handling all manners of clinical trials for its partners in pharma and biotech, employing roughly 5,400 people in 50 countries and growing its revenues more than 10% each year.

The CRO's move toward Wall Street is part of a boomlet of IPO interest from some of the largest companies in the space, beginning with Quintiles ($Q) and its $947 million debut in 2013 and followed by Catalent ($CTLT), which raised nearly $1 billion in a July offering. PRA Health Sciences, a CRO conglomerate assembled through a series of buyouts, filed for a $375 million IPO last month.

Investor interest in the world's biggest CROs is driven by drugmakers' increasing reliance on outside researchers. The outsourcing industry is on pace to grow about 8% a year, according to Industry Standard Research, reaching $32 billion by 2018. ISR estimates that about 31% of all clinical development spending is outsourced to CROs, a number the firm expects to reach 43% in the next 5 years.

And INC believes it's poised to shine amid all that growth. The CRO expects the market for Phase II-IV services to grow at 8% to 9% per year through 2018, giving it an addressable market north of $56 billion a year.

Last year, the company grew its service revenue by 13% to $652.4 million while posting a net loss of $27.6 million, which bested the prior year's $42 million figure.

- read the filing

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