Normally Outsourcing-Pharma.com reports news rather than delve into financial speculation but with Pharma giant Pfizer hinting earlier this year it was looking at a strategic partner to accompany Parexel and ICON, we could not help question why one investment bank downgraded the two CROs to ‘neutral’ while simultaneously upgrading Quintiles.
Ross Muken from ISI who released the analyst opinions last week told Outsourcing-Pharma.com there has been “no major change” in the industry. However, John Kreger from William Blair & Company – an investment bank which hasn’t changed its ratings for the three companies - concurred “any Pfizer changes would impact how investors think about Icon and Parexel.”
In April, Pfizer told us that it is “exploring the option of bringing in a third alliance partner,” and at the time Muken suggested Quintiles had “a great shot” at winning the contract.
We contacted both Pfizer and Quintiles, neither of which was able to comment on this issue.
Quintiles – Bucking the broader trend?
Muken predicted there is “still top-line momentum for the Late Phase CROs overall going forward” but acknowledged there are a number of risks that exist in the industry.
These include “a pick-up in Major Pharma M&A, a slowing in biotech equity fundraising and the potential for an increasingly competitive RFP environment as several large players return to the public markets - PRA, INC and most notably PPD.”
However, his ”enthusiasm remains unabated for Quintiles” though in a note he put this down to strong book-to-bill in product development, coupled with an improving outlook for Integrated Healthcare Services (HIS), “bucking the broader trend.”