Icon, the Dublin-based clinical trials group for pharmaceutical manufacturers globally, said that it overstated revenues by $158 million (€135.7 million) over the course of 2023 and 2024, after completing an investigation into its accounting practices and controls.
The disclosure was contained in the Nasdaq-listed company’s annual report, filed with the US Securities and Exchange Commission (SEC) in recent days.
Icon said that most of the overstated revenues were the result of errors related to “improper adjustments recorded to recognize revenue outside of normal system processes for long-term clinical services revenue contracts, errors in determining the estimated cost to complete, the assessment of realizable value, and certain manual adjustments in respect of certain long-term clinical services revenue contracts”.
The company said that it overstated its income tax expense by $13.1 million for 2024 and understated the 2023 figure by $6.6 million.
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Shares in Icon slumped by as much as almost 40 per cent on February 12th when it said it was delaying publication of its financial results while lawyers investigate if the group overstated revenues for 2023 and 2024.
[ Icon says revenue accounting issues extended into 2025Opens in new window ]
However, the stock rallied somewhat in late April when Icon confirmed that the overstatement of revenues in 2023 and 2024 was lower than the upper limit of 2 per cent it had previously indicated.
Icon shares are currently down 27 per cent so far this year.
Group revenue for 2024 was restated in the annual report as $8.19 billion, down 1.1 per cent on the previously reported figure. Revenues for 2023 were lowered by 0.8 per cent to $8.05 billion.
Net income was reduced by 6.6 per cent to $739.1 million for 2024 and by 9.5 per cent to $554.2 million for 2023, according to the report.
Revenue for last year amounted to $8.25 billion, while the company forecast that its outturn for this year will fall to between $7.85 billion and $8.15 billion.
“We have concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of December 31, 2025 due to material weaknesses, which has adversely affected our ability to report our financial results in a timely and accurate manner and could have a material adverse impact on our business and financial condition,” the report said.
In a separate statement, Icon said it was “committed to remediating the material weaknesses” and enhancing its overall internal control environment. “The company’s remediation plan includes enhancements in relation to four key areas: oversight of control environment, policies and procedures, training and internal controls over manual adjustments,” it said.
Founded in Dublin in 1990, Icon has grown to become one of the world’s leading clinical research groups, providing outsourced clinical development and commercialisation services to pharma companies. It employs 40,000 people in operations across 55 countries carrying out clinical trials of new drugs developed by pharma manufacturers.
Former chief executive Steve Cutler’s resignation last year resulted in an acceleration in a share-based remuneration plan, at a $13.1 million cost to the company. His total remuneration amounted to $19.9 million.
Cutler’s exit package includes a total of $1.1 million of salary payments up to August 2026, under his notice period entitlements, as well as $1.2 million of non-compete payments that stretch to October 2027. Some of this was accounted for in his total package for 2025. He resigned from the board on May 21st of this year.
The company is currently led by CEO Barry Balfe.
