Cantillon: Icon continues to gain status

Provider of services to the pharmaceutical and medical devices industry remains unsung, at least here

Icon, the Dublin-based, Nasdaq-listed provider of services to the pharmaceutical and medical devices industry, has been recording steady, upward growth for some time now though it remains a relatively unsung success story from the Irish business world – at least here.

This week it reported financial results for the third quarter, showing that net revenues grew 19 per cent year on year to $339.8 million. Income from operations was $33.2 million or 9.8 per cent of revenue, compared to $20.9 million or 7.3 per cent for the same quarter last year. Net income was $27.8 million or 45 US cents per share on a diluted basis, compared with $17.7 million, or 29 cents per share last year.

As chief executive Ciaran Murray put it on the day the results were released, it has been another good quarter with the business showing, once again, record levels of performance. Icon, he added, is set for a continued growth.

The drivers of Icon’s good fortunes don’t look like going away any time soon. The pharmaceutical sector is responding to some of its better-earning products coming off patent by seeking to reduce its costs, and the outsourcing of its clinical trials activities is one obvious target, especially as this area is one where complexity just continues to grow.


The other driver of the business is the scale of the projects that the pharmaceutical, biotechnology and medical devices sectors can require from time to time. Icon is now one of the four largest contract research organisations in the world and, because of its reach, is able to accommodate the demands of these bigger programmes.

While the average research project has a value in the region of $10 million, some can have a value of up to $150 million and can take four to five years to mature. Such multi-jurisdictional trials can involve up to 5,000 patients and, given the area Icon is involved in, keeping up with developing technologies is key.

It must also mean that it is a very difficult market for new companies to muscle their way into at this late stage.

The company, founded in 1990 with eight people, listed on the Nasdaq exchange eight years later. These days it employs 800 people in Ireland, and 10,300 around the globe in 77 locations.

It is some story and the key challenge for the company is to keep abreast of the pace of change in a very complex sector. That means high-end jobs and with a lot of the backup work based in Ireland: that’s good news.