The company reported total net awards of $920m for the third quarter (Q3), awards which were “broad-based across all customer segments” and “particularly strong” among its small- to mid-sized customers.
Though discussions regarding strategic relationships remain ongoing with other large pharma customers, MacDonald said on the earnings call.
The Numbers
- Total revenue of $1.11bn and $3.24bn for the three and nine months ended September 30, 2018, respectively
- Combined company net new business awards of $920.2m and $2.85bn for the three and nine months ended September 30, 2018, respectively
- Clinical solutions segment net awards of $676m and $2.08bn for the three and nine months ended September 30, 2018, respectively
- Commercial solutions segment net awards of $244.2m and $772.4m, for the three and nine months ended September 30, 2018, respectively
As per continuing investments, Syneos is augmenting its integrated offerings, expanding teams and investing in specialized technology platforms, he explained.
“We also continued to enhance our data strategy to optimize how data and digitization fuel our biopharma extrapolation model, similar to our strategy regarding technology and investigative sites,” MacDonald added.
However, an analyst commented that bookings have been growing slower than usual. Regarding this, MacDonald said, “As we transitioned into what we now believe is the number two CRO by revenue, we’ve become the new kid on the block in the big pharma. And those negotiations, discussions generate costs and MSAs [master service agreements] fully in place takes a little bit of time.”
MacDonald said he expects this area to accelerate going into 2019, with healthy markets on both the clinical and commercial side. “As we get back into our stride, if you like, momentum-wise in clinical, we’re looking at accelerating the growth from where we are at,” he said.
Filling in the gaps
Moving forward, the priority for capital deployment will be reducing debt. The next is opportunistic, MacDonald said, as the company looks to remain “nimble” in the M&A space.
“I think we’ve got some work to do in both sectors,” he said, “and as we learn more and more about the model that we have and we listen more and more to customers, we’re seeing gaps where we have the capability, but maybe not always the scale.”
MacDonald said the company is “constantly” looking at capability in Asia-Pac, an area in which it recently expanded via its acquisition of Kinapse.
Regarding the acquisition in August of this year, MacDonald said Kinapse closed several gaps in Syneos’ offering. The company also is seeing “some nice revenue synergies or opportunities to drive revenue synergies from that group,” he added. “It gives us a lot more strength in the consulting horsepower in Europe as well as a bigger footprint in Asia-Pac on the service side.”
