As IQVIA released its first-quarter financials Tuesday morning, the CRO-analytics firm outlined just how hard its R&D business had been hit by the COVID-19 pandemic.
It revealed that 80% of its clinical research sites “are inaccessible due to limitations on the ability to travel to and access sites.” Last week, rival CRO Icon said 65% of its global sites were “impacted in some way by the pandemic,” and as more companies report this week and next, expect to see the same pattern.
But IQVIA, formerly Quintiles and IMS Health, is projecting this hit will ease, seeing this go down to 70% through the second quarter, and 35% in Q3 still inaccessible, but reckons that “all sites [will be] open and accessible by the beginning of the fourth quarter.” That, they note, also depends on what the pandemic looks like by then.
It adds that, with the exception of China, most of its offices are closed and “substantially all of IQVIA's employees are working remotely,” which is also hitting its business.
Given this, it’s had to rethink the full-year guidance it gave just two months’ back, which saw it guide full-year 2020 sales as between $11.7 billion and $12 billion; now, that’s down to $10. 6 billion to $10.9 billion.
It sees Q2 as its hardest-hit quarter; sales for Q1 were up 3.7% at a constant currency base, hitting $2.75 billion over the year-ago period.
Ari Bousbib, chairman and CEO of IQVIA, said: “Our team continues to execute well under these unprecedented circumstances. We have accelerated and expanded a variety of cost containment actions to counter the pressures on the top line. Importantly, we have quickly activated business continuity plans, including remote delivery capabilities in technology and analytics, remote monitoring and virtual trials in R&DS and virtual commercial activity with clients wherever possible.
“Despite restrictions placed on in-person access to clients, R&DS business development activity remained strong and the team added to our already industry-leading backlog. Demand for our technology and analytics offerings also remains strong and the TAS business benefits from a large portion of recurring revenue that we have built up over time.”
He added that he “anticipates an acceleration of business momentum when the crisis subsides as delayed trial activities will still need to be performed.”
This month, a report out by analysts at Moody’s said that both IQVIA and Parexel are “operating with elevated financial leverage and are more weakly positioned at their current ratings, with limited cushion to absorb earnings declines.”
It said in its financials that it continues to “maintain strong liquidity,” with cash and cash equivalents just under $1 billion at the end of March, and the company “had available borrowing capacity of $1.4 billion under its $1.5 billion revolving credit facility.”
IQVIA’s stock was flat on Tuesday trading on the news.