Double-digit RFP increase at Icon encouraging for CROs

25-Apr-2011 - Last updated on 02-May-2011 at 10:55 GMT

A double digit year-on-year increase in the volume and value of RFPs received by Icon has added to evidence the market is improving.

The increase in request for proposals (RFP) marks a significant, but expected, upturn. Analysts noted an acceleration of RFPs around the turn of the financial year and comments by Icon, the first contract research organisation (CRO) to post its quarterly results, support this observation.

“Our sense is, and reports from our business development team are, the market seems to be more buoyant”, said Peter Gray, CEO of Icon, in a conference call with investors. Gray was encouraged by the strength of the RFP sector but warned against drawing too many conclusions.

It is the beginning of a new financial year so a good flow was expected, said Gray, and the increase is only a 13-week snapshot. A clearer idea of the strength of the sector will emerge as the other public CROs post their results in the coming weeks and quarters.

At Icon the increase was caused, in part, by an uptick in RFP opportunities from small pharma and biotech. In 2010 Icon may have missed biotech opportunities by being too focused on strategic deals, said Gray in an earlier conference call, and has sought to rectify this in 2011.

The business development team, which has grown despite cuts in other areas, has been “knocking on more doors and maybe...knocking a bit louder on those doors”, said Gray. Biotech funding may also have improved so it is hard to say exactly what caused the uptick in RFPs.

The role of Phase I in alliances

At higher levels within Icon and sponsors discussions about strategic partnerships continue to occur. These discussions are at various stages of development, said Gray, with at least one deal close to being finalised.

“There is one [clinical pharmacology] strategic relationship that is being finalised at present”, said Gray. Discussions with a number of other potential clinical pharmacology partners are ongoing.

Securing a clinical pharmacology strategic partnership would give the Phase I business a “solid base”. The unit, which has 250 beds, continues to post losses but is improving and the pipeline of opportunities is getting stronger.

Icon also views Phase I operations as key to strategic partnerships, even if the deal is focused on Phase II and III. Having Phase I capabilities gives a CRO the expertise and credibility to discuss drug development with sponsors, said Gray.

Similarly, the central lab unit at Icon, business at which is improving, is viewed as a strategic asset by Icon. Integration of lab and clinical data can be valuable, said Gray, and sponsors will increasingly outsource both to the same CRO.