With Q2 earnings on deck, below is a sampling of what I found most interesting and pertinent from Q1's earnings calls. I'm calling these out now because it provides a good backdrop of what to look for in the Q2 reports.
Book-to-bills continue to hold steady in the 1.25-1.35 range, reflecting continued steady- though modest- growth prospects for most service providers.
Biotech funding in the public markets are demonstrably slower, but private equity and VC continues to show strength, with strong RFP flows from all biopharma sectors.
Backlog burn rates continue to slow to historical norms as vaccine related work drops off and is replaced by oncology and other longer term projects.
The Russia-Ukraine conflict was mentioned by multiple companies as impacting revenue by 1-3% for the rest of the year (remember the conflict started mid-Q1).
The strong US dollar created an significant additional headwind to revenue growth for US based companies. Note that the dollar has continue to strengthen since 31-Mar.
The pricing environment remains highly favorable for service and technology providers selling into biopharma.
Multiple companies noted labor attrition has shown signs of plateauing over the past couple months. What’s funny is most companies said it was because of the great things they were doing to keep people, and the bad things competitors are doing (which means neither is likely the case and macro factors are a better explanation).
This review reminded me we desperately need more publicly traded standalone CROs, site networks, and eClinical companies!
Comments