Irish contract clinical research group Icon reported net profits of $9.3 million in the second quarter of 2006, a rise of nearly 60%.
The Dublin-based firm said that second quarter net revenues increased by 25% to $107 million, in line with the historic average growth rate at the company over the last five years, and the first time that quarterly revenues had breached the $100 million barrier.
One of the high points in the results statement is the performance of Icon’s central laboratory business which, while accounting for only around 8% of the business, made its first contribution to the bottom line by posting its first profit, a quarter ahead of schedule.
Revenues for central laboratory came in at $11.5 million, nearly $5.5 million ahead of the equivalent quarter of 2005, with an operating margin of around 3.5%.
On a conference call, Peter Gray, Icon’s chief executive, said the company had not ‘waved a magic wand’ to achieve the dramatic improvement in performance at the unit over the last few quarters.
“High bookings in the past, typically $10-$11 million a quarter, have been slow to translate into revenue,” he said. This is finally starting to occur, he added, noting that bookings in the second quarter were $21 million and the backlog at the unit has swelled from $28 million to more than $90 million over the last few years. Total backlog at Icon rose 46% to $772 million, with net new business of $166 million, up 64%.
Dr John Climax, Icon’s chairman, said: “With our backlog at record levels, continuing good business flow and the Central Laboratory reaching profit earlier than forecast, we are upgrading our guidance for the rest of the year.” Icon has now raised its forecast for revenue to $425 to $440 million for 2006, with earnings per share in the $2.70-$2.80 range.
Developments in the quarter included the opening of new offices in Poland, Lithuania and China, a record 400 new hirings and the launch of Icon’s new oncology solution offering. This programme, launched last month as the American Society of Clinical Oncology, aims to combine Icon’s core competencies in clinical and central laboratory with in-house research the company has conducted in the areas of biomarkers.
Also expected to drive the business over the coming quarters will be the scheduled acquisition of Ovation Research Group, a patient registries, outcomes research and health economics firm that will help Icon satisfy the growing demand in the marketplace for long-term safety studies.