By Siddhi Mahatole (Reuters) -IQVIA Holdings on Tuesday narrowed its annual profit forecast, trimming the upper end of its outlook, as it expects cancellations of research contracts from pharmaceutical clients to persist into the second half of this year. Drugmakers and biotech companies have been cancelling orders given to contract research firms in response to […]
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IQVIA narrows annual profit forecast amid continued research contract cancellations
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By Siddhi Mahatole
(Reuters) -IQVIA Holdings on Tuesday narrowed its annual profit forecast, trimming the upper end of its outlook, as it expects cancellations of research contracts from pharmaceutical clients to persist into the second half of this year.
Drugmakers and biotech companies have been cancelling orders given to contract research firms in response to the President Trump administration’s drug price negotiation program, proposed federal research budget cuts and tariffs.
Despite these challenges, contract research firms like IQVIA are showing signs of recovery, as Wall Street analysts point to a rebound in biotech and pharmaceutical spending following a cautious stretch driven by tighter sector financing.
“The climate overall has improved – that’s undeniable in our sector,” said CEO Ari Bousbib.
Bousbib addressed concerns about pricing pressure, describing it “a little overdone”.
He added that pricing has stabilized to normal levels and that the sector is healthier overall in terms of market dynamics.
IQVIA now expects annual adjusted profit per share between $11.85 and $11.95, compared with an earlier forecast of between $11.75 and $12.05.
The Durham, North Carolina-based company forecast its annual revenue to be between $16.15 billion and $16.25 billion, compared with its prior range of $16.1 billion and $16.3 billion. The forecast includes a $100 million impact from the wind-down of COVID-19 pandemic-related work.
Quarterly sales at its research and development solutions unit was $2.26 billion, above expectations of $2.23 billion, driven by improving trends in customer demand.
“We certainly see encouraging signs of improving R&DS trends, while TAS is more a matter of comparables vs. a demand slowdown,” Leerink Partners analyst Michael Cherny said.
Shares were up 1.6% in early trading, while the stock has gained over 12.3% year-to-date.
IQVIA said it expects fourth-quarter adjusted profit between $3.35 and $3.45 per share, compared to estimates of $3.39 per share.
On an adjusted basis, it reported a profit of $3 per share for the quarter ending September 30, above expectations of $2.97 per share.
(Reporting by Siddhi Mahatole in Bengaluru; Editing by Vijay Kishore)