Yet another CRO giant has taken a revenue hit due to a customer demand dip. Irish clinical research organization Icon reported third-quarter revenue of $2.03 billion, underperforming analyst expectations of $2.142 billion.
“Our revenue shortfall was attributable to more material headwinds from two large customers undergoing budget cuts and changes in their development model, lower than anticipated vaccine-related activity and ongoing cautiousness from biotech customers resulting in award and study delays,” Icon CEO Steve Cutler, Ph.D., said in an Oct. 23 release.
Icon is a multinational company headquartered in Dublin with more than 41,150 employees across 45 countries. The Q3 performance led Icon to lower its 2024 revenue forecast by 3% to a new range of $8.26 billion to $8.30 billion.
“These headwinds seem poised to continue over at least the next couple quarters, meaning numbers for 2025 and 2026 are heading significantly lower,” analysts from William Blair wrote in an Oct. 23 note to clients.
Icon executives called the current CRO market “mixed” in an Oct. 24 call with investors. Demand from large pharmas is overall positive, execs explained, and customers are still preferring to partner with big, scaled CROs.
Now, Icon is “taking decisive action to realign our resources to forecasted activity,” Cutler said in the release. In the Oct. 24 call with investors, Cutler said the company is “looking at where we have an excess of people in certain areas” and “taking fairly decisive actions.”
Icon’s fellow CRO Charles River saw a revenue skid of its own in the second quarter, which led the company to lay off 3% of its workforce. Charles River attributed the decline to a drop in demand, a trend that CEO James Foster warned at the time could continue throughout the rest of the year.