CRO giant Parexel ($PRXL) has posted new growth figures showing it looks to grow by 10% to 12% each year, spurred by both ongoing ops and growth from recent buys.
The Boston-based biopharma R&D services provider’s chairman and CEO, Josef H. von Rickenbach, told investors and analysts at a recent investor day in New York that he expects the company to thrive in a changing environment.
“Several paradigm shifts in the biopharmaceutical marketplace--changing biopharmaceutical pipelines, the increasing importance of payers, advances in information technology, and virtualization of biopharmaceutical companies--provide us with major new market opportunities.
“Our strategy extends our competencies into new markets, including market access and commercialization, that are large and growing faster than our traditional clinical business.”
Mark Goldberg, president and COO of the CRO, said Parexel will grow the core business via its strategic partnerships while also enhancing service offerings to small and midsized companies.
The company said its 10% to 12% annual revenue growth will see around 7% to 8% of this coming from ongoing operations, with around 3 to 4% growth coming from its acquisitions.
Ingo Bank, SVP and CFO of Parexel, said: “In recent years, we have seen strong growth in new business and backlog but also a delay in converting backlog into revenue. This has been caused by a trend toward smaller, more complex clinical trials, particularly those in oncology, which take longer to start and complete.
“We believe that during the latter part of fiscal year 2017, the prolongation of trials will have reached steady state, at which point revenue growth should start to align more closely with backlog growth. The long-term driver of our revenue growth expectations remains our encouraging new business performance.”
Parexel also gained a boost when it signed an extended preferred partnership deal with Pfizer ($PFE) last month. Financial details of the pact were not however disclosed.
But it’s not all been rosy for the CRO, as Parexel has been forced to make a series of cuts over the past year, which has seen it cut 850 jobs across its global businesses--a move that has saved the company around $40 million.
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