Icon turns profit on new business

Clinical trials group Icon turned in a first-quarter profit, after recording a loss in the same period last year, as the company won more new business from pharmaceutical firms.

Net income amounted to $7.54 million (€5.9 million), or 53 cents per share on a diluted basis, in the three months to the end of March. The company had reported a loss of $5.53 million, or 39 cents per share, for the quarter ended February 28th, 2005.

Icon has changed its financial year to coincide with the calendar year.

"Net bookings for the four months since our last reported quarter were $208 million, of which $171 million arose in the quarter, an all-time record," said John Climax, Icon's chairman. "Business flows continue to be strong and we look forward with confidence to the remainder of 2006."

Icon provides services to the pharmaceutical, biotech and medical device industries in 27 countries worldwide. The services include clinical research, biometrics, interactive technologies, laboratory work, clinical pharmacology and consulting services.

The company said in February that it was emerging from a difficult period and was embracing a turnaround as demand rose for its services. Icon has attributed the revival to pharmaceutical companies showing stronger pipelines of new drugs coming onto the market and to growing investment in biotechnology companies.

The main challenge facing Icon, though, is that companies in both the pharmaceutical and biotech sectors have been cost-cutting in recent times.

However, Icon has large cash reserves and says it should be able to fund a significant acquisition.

Icon's first-quarter revenue climbed 19 per cent to $98.5 million, while adjusted income from operations rose 82 per cent to $11 million. The company's operating margin widened to 11.2 per cent in the quarter, up from 7.3 per cent.

"They were particularly good numbers," one broker said. Shares of Icon climbed 27 cent, or 0.6 per cent, to €42.25 yesterday in Dublin. The stock is also listed in New York.