Enterprise Ireland Deloitte CEO Forum 09

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Enterprise Ireland / Deloitte CEO Forum 09 Keys
to Success in the New Business Environment ICON
plc Peter Gray November 12th, 2009
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ICON Keys to Success Agenda

• What does ICON do?
• ICON The story so far
• The keys to success so far
• The keys to success in the new business
  environment

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What does ICON do?
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ICON A Professional Services Company in field
of Human Clinical Research

• All medicines are tested in humans before being
  approved for sale
• Phase I Is it safe? - (Healthy Volunteers)
• Phase II Is it safe? - What dose works? (Sick
  patients)
• Phase III Is it safe? - Does it really work? (A
  lot of sick patients)
• Phase IV Is it safe? - does it work for another
  disease, or in a certain patient type?
• ICON manages trials for Pharma and Biotech
  companies - finding doctors / hospitals, who have
  right patients and right motivation.
• We manage them, audit them and gather, verify
  and analyse data.
• Our Central Lab analyses samples from patients in
  trials. Our Imaging Lab reviews data from X-rays,
  MRIs, PET scans etc.

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ICON The Story So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
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The Journey So Far
1990

• Revenues 0.5 million
• Staff 5

• Revenues 865m
• EPS 1.30
• Staff 6,900

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ICONs Global Footprint
68 Locations in 38 countries
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ICON Staff Growth 1990 Today
Current Dublin Staff 540
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ICON Revenue Growth 1990 2009 (E)
Current Market Cap 1,400m
Market Cap in IPO 180m
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The Keys to Success So Far
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1. Necessity was the mother offoundation

• ICP, an early Irish CRO with international
  operations, went into receivership May 1990.
• Assets sold to a US Competitor (Covance)
• Dr. Ronan Lambe and Dr. John Climax lost their
  jobs, but had Knowledge Assets
• Expertise in Commercial Clinical Research
• Good relationships in RD at some key global
  Japanese Pharma companies (Abbott, Pfizer
  Sankyo)
• Founded ICON in June 1990

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2. People Culture

• Founders had pool of experienced people to tap
  into from previous employer very valuable in
  early days
• Tapped into the Irish Diaspora as we expanded
• Wherever possible, we transfer ICON staff to lead
  new offices ensures culture/quality standards
  maintained
• Have built decentralised international management
  team ensuring we have global perspectives
• Maintaining a flat and nimble organisation
• Entrepreneurial within the confines of a heavily
  regulated market
• Encouraging financial accountability at small
  unit levels
• Corporate oversight not heavy-handed (less than
  40 people)

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3. Luck Timing

• ICON won contract worth over 1m within 6 months
  of start-up
• 1990 major company needed comparative clinical
  trial v emerging competitive product.
• Ireland was only market in the world where the
  new drug was marketed
• Impetus for globalisation of Clinical Research
  coincided with ICONs formation
• In 1990, EU, US and Japanese regulatory agencies
  meet in Paris to form ICH - International
  Conference on Harmonisation of Technical
  Requirements for Registration of Pharmaceuticals
  for Human Use
• Outsourcing of clinical development increasingly
  embraced by the pharmaceutical industry since
  early 90s
• In 1997, when revenues were only 26m, won a
  7-year global trial with Pfizer (for Lipitor)
  worth 50m
• Gave us great credibility which we leveraged
  successfully

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4. Embracing Globalisation

• Being Dublin-based meant domestic market focus
  not an option had to be international
  immediately!
• ICH made globalisation inevitable
• Focused on multinational trials
• Not an early adopter but a fast follower!
• Opened offices when demand justified it and
  launched services when we knew clients wanted
  them
• Aggressively adopted EDC (Electronic Data
  Capture) technology for clinical trials in 2004
  as clients and doctors finally embraced this
• Opened an Indian back-office in 2005 responding
  to clients cost needs
• Only twice took build-it-and-they-will-come
  decisions Sydney (1996) and Omaha (2009)

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5. Staying Focused but Seeking to Differentiate

• Absolute focus on clinical research market
• Sought only multinational trials from very early
  stage
• This limited the competition from local companies
  in each market
• Quality as a cornerstone (ISO 9000 obtained in
  1993)
• We started by providing arms and legs but
  gradually added intellect / knowledge
• Added more technical and science resources as
  market developed and clients sought scientific
  input
• Made acquisitions only to build scale and range
  of core services
• Added additional service capabilities within
  clinical research
• Increased therapeutic/geographic reach

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6. Going Public

• We went public on NASDAQ in May 1998
• We didnt need the money!
• Gave us visibility and financial credibility with
  our clients
• Put us on a par with major US competitors
• Ultimately, gave us the ability to make
  acquisitions and strategically build the company

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The Keys to Success in the new business
environment
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Headwindsbut opportunities too
Risk Averse Regulators
Patent Expiries
Health Systems Ability to Pay
Economic Environment
The Advance of Science
More Data Required by FDA
Continued Growth in Outsourcing
Cost Containment
Urgency to Get New Drugs to Market
Expand Markets for Existing Drugs
Pipeline Expansion
Focus on Core Competencies
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Keys to ICONs success in the new environment

• People Culture
• In a service business this will always be key
• Flexibility Nimbleness
• As our customers adapt to their pressures, each
  will want a unique solution we must be nimble
  enough to respond appropriately.
• Some will be only cost focused
• We must remember why we exist
• Differentiation
• Economic pressure leads to price pressure which
  leads to commoditisation differentiation is a
  protection
• Establishing more Strategic Customer
  Relationships
• Scale and scientific expertise will be important
• Financial Strength
• More Luck
• You always need a little

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Questions?