Q1 2020 Earnings Call
Well I compare see Q1 Twentytwenty earnings conference call at this time, all participants are in listen only mode. After the presentation. There will be a question answer session to ask a question. Please press Star then one on your telephone keypad must advise you. This conference is being recorded today on phase of the 20 set of April Twentytwenty or.
Now, let's turn the conference over to your space today, Jonathan Cohen. Please go ahead Sir.
Thanks, and good day, ladies and gentlemen, thank you for joining us on this call covering the quarter ended March 30, Onest 2020.
Also on the call today, we were Fios Dr., Steve Cutler under CFO Mr. Brendan Byrne.
I would like to note that this call is webcasts and that there are floods devoted to download on our website to companies face coal.
Certain statements in today's call will be forward looking statements. These statements are based on management's current expectations of information currently available.
Including current economic and industry conditions.
Actual results may differ materially from those stated or implied by forward looking statements due to the risks and uncertainties associated with the company's business and listeners are cautioned that forward looking statements are not guarantees of future performance.
Forward looking statements are only as of the date that they are made we do not undertake any obligation to update publicly any forward looking statement either as a result of new information future events or otherwise.
More information about the risks and uncertainties related to these forward looking statements may be found in FCC reports filed by the company.
This presentation includes selected non-GAAP financial measures for presentation of the most directly comparable GAAP financial measures. Please refer to the press released and headed condensed consolidated statements of operations use Scott.
On on that.
While non-GAAP financial measures are not superior to or substitute for the comparable GAAP measures. We believe certain non-GAAP information is more useful to investors for historical comparison purposes.
We will be limiting to cultivate Warner and would therefore offs participants keep the question toward each with an opportunity to ask one related follow up question.
I would now like to handover the call to our CFO Mr. Brendan Byrne.
Thank you gentlemen.
In February I am icons quarter for 29 in earnings call, we outlined our expectations that the covert 19 impacts to our quarter. One twentytwenty revenue would be in the range of $4 million to $7 million. The majority of which was associated with our Chinese operations.
Following that call we have seen a very rapid escalation into a global pandemic. Accordingly, plus we are pleased with the operational and financial momentum we brought into twentytwenty the significant disruption and uncertainty caused by cobot 19 means that we have taken decision to withdraw our full year Twentytwenty financial guidance.
My following comments will focus on our approach are on our core one performance and Steve will then headline further details in relation to our current and future operational challenges as well as the various measures we're putting in place to mitigate these risks.
In quarter, one we achieved gross business wins, all $1.027 billion and recorded $160 million worth of cancellations. Consequently, net awards in quarter, one were $867 million, resulting in a net book to bill of 1.21.
With the addition of these new awards, our backlog grew to $8.7 billion. This represented a year on year increase of 10.4%.
Revenue in quarter, one was $715.1 million. This represented year on year growth of 6% or 6.5% on a constant currency basis.
And on a constant dollar organic basis revenue growth was 5%.
Our top customer represented 11.4% of revenue for the quarter compared with 14.8% in quarter one 2019.
Our top five customers represented 39.9% of quarter, one revenue compared to 39.9% last year, our top 10 represented 52.2% compared to 53.1% last year, while our top 25 represented 69.6% compared to 71.6% last year.
Gross margin for the quarter was 29.3% compared to 29.9% in our quarter four and 29.5 in the comparable quarter last year.
Our SDMA with 12.2% of revenue in quarter, one, which compared to 11.9% last quarter and 12.1% in the comparable period last year.
Operating income for the quarter was $106.3 million a margin of 14.9% this compared to 15.9% last quarter and 15.1% in the comparable quarter last year.
The net interest expense was $1.4 million for the quarter and the effective tax rate was 12% for the quarter.
Net income attributable to the group for the quarter was $91.7 million a margin of 12.8% equating to diluted earnings per share $1.70 cents. This compares to earnings per share of $1.83 in quarter, four and the dollar and 63 in the comparable quarter last year, an increase of 4.3%.
On a comparative basis days sales outstanding were 55 days at March 31, Twentytwenty. This compares with 54 days at the end of December 19, and 59 days at the end of March 19.
Cash generation from operating activities in the quarter was strong at $142.8 million dollars.
Capital expenditure was $11.3 million in quarter. One in addition, a $175 million worth of stock was repurchased in quarter, one on an average price of $141.68.
This equated to over 1.225 million shares which is in excess of our stated goal of repurchasing 1 million shares over the course for the full year.
We do not have any immediate plans to repurchase any further shares.
At March 30, Onest Twentytwenty, the company had gross cash balances of $494 million and dash of $350 million, leaving a net cash balance of $144.4 million.
This compared to net cash of $220 million at December 31st 2019, and net cash of 128 point $600 at March 31 2019.
In addition to the significant cash profile. We currently have undrawn revolving credit facility of $150 million available to use.
Our robust cash generation and strong access to liquidity purposes in a very resilient position as we work through the challenges that Twentytwenty brings.
And with all of that said I'd now like to hand, the call over to Steve.
Thank you Brenda and good morning to all of you.
As we entered Twentytwenty the key industry drivers of a positive outsourcing land scope growth in R&D budgets and a continued strong biotech environment remained in place.
In quarter, one we booked strong levels of gross and net awards of $1.027 billion at 867 million representing book to build a 1.44 and 1.21, respectively.
Consequently, we grew our backlog year over year by 10.4% $8.7 billion with revenues expanding to 715.1 million or 6.5% on a constant currency basis.
We achieved the gross margin of 29.3% and we continued our strong SG nine performance with Sci at 12.2% of revenue.
This delivered earnings per share growth year over year of 4.3% to $1.70 cents. In addition in April we were very pleased to announce the continuation of our long term relationship with our top customer with the signing of a new multiyear services agreement.
However.
While the impact of covered non team was relatively modest in quarter. One this year. It is our expectation that we will experience a more severe downturn in our business in quarters, two and three and possibly beyond.
And it is clear the 2020 is going to be a difficult you for the CRL industry as we faced the extraordinary challenges brought about by the sudden onset of the Corona borrowers pandemic.
Our core phase two three business is the service line most impacted.
New trials are being put on hold patient enrollment has slowed and approximately two thirds of our side. So the the restricted or stopped axess all together for us CR rate, resulting in significantly fewer monitoring business.
Furthermore.
Although a small part of our business in our central laboratories sample volumes received into our facilities have been reduced by approximately 40% due to the drop off insights activity levels.
The consequences of these challenges will curtail our ability to execute in the quarters.
However, despite the obvious issues, we are proactively reviewing and implementing alternative trial monitoring approaches with customers on a study by study basis, including remote and risk based management and we are seeing significant demand for our at home services delivered through our recently acquired.
Symphony Clinical research group.
The active push to develop a treatment for covered 19 is also resulting in a large number of RFP and some significant success with projects that we anticipate will start quickly.
In addition, since mid March we are seeing conditions gradually improving in China with over 70% of our sites now reopened and monitoring activities re commencing.
Our hope is in other regions will follow suit in quick order as they stabilize and recover.
Furthermore, I want to point out the impact to our business is not uniform and indeed in certain areas such as our functional solutions business. We remained positive in our outlook for 2020 and are expecting year over year revenue growth.
Well its access to third party sites is currently significantly reduce we are realizing the benefits of previous investments and acquisitions, which are in part helping to offset this impact.
Through our sought network model, we are able to provide a proven method to engage physicians and patients into clinical research programs are embedded staff also have direct access to the but to the sought patient database, which helps evaluate the patient population during the study feasibility phase increasing enrollment and making clinical trial parts.
Dissipation, a much more efficient process for the physician.
As currently restriction disease and enrollment restart this network will play a crucial part in accelerating the recruitment process for new and ongoing trials.
Our acquisition of simply clinical research is also positioned icon as the leading global provider that element alternative site visits.
With over 300 clinical trials completed across five continents.
Since the outbreak of the Cobra daunting and Dennis we have experienced tremendous interest in the service with serious inquiries for over 60 sponsors.
We have been ramping up the scale of this delivery method with staffing transferred from other areas of our clinical research services in order to enable delivery of trials using this approach across more studies.
Furthermore, whilst also euros and sponsors including icon will be placing emphasis on remote and risk based monitoring iPhone is also differentiated buys iconic platform and firecrest technology.
Iconic held analyze operational clinical and real world data enhancing the desired and delivery of our projects as well as strengthening our engagement with investigators and customers.
And firecrest enables remote management of aspects of clinical trial, such as investigator and staff training on protocol and patient education through portal and video delivery.
[noise] Firecrest is used by all of the top 20 global pharma companies with almost half a million registered users.
[noise] Nevertheless.
As we are not immune to the impact of covered non team. We are taking immediate and proactive cost reduction measures to protect jobs, maintaining our business performance and ensure that we are ready to move quickly when business conditions improve later in the year.
To address the challenges brought on by that and then it we have developed a comprehensive cost optimization strategy includes an immediate freeze on hiring in certain business units. The removal of contract software permanent employees can assume responsibilities and a reduction of our nonlabor variable spend in discretionary.
Areas, such as travel and facilities.
As a people business the majority of our costs, our employee related which also on the instead a major part of our cost optimization strategy is the implementation of a temporary salary reduction for all employees.
Since the middle of April the board and senior leadership have taken a 30% reduction in fees and salary, respectively, and our chairman cure, Larry and I have taken a 40% reduction.
The remainder of the company, we are adopting a progressive approach with the vast majority of employees, taking a single digit salary reduction.
While these measures are designed to protect jobs are realized that these actions are difficult and I would like to thank all of our start for the flexibility and understanding.
Taking these cost containment plans into account and in conjunction with our current revenue forecast.
Our quarter to outlook is for revenue to be in the range of $575 million to $625 million and earnings per share to be in the range of 90 cents to $1.30 cents.
Our balance sheet remains resilient and industry leading.
At the end of quarter, one we had a gross cash balance of $494 million $350 million, a dead and that's a net positive cash balance of $134 million.
In closing I want to make it clear that we see the significant disruption caused by this endemic as relatively short term and as we move beyond Twentytwenty, we expect global conditions to improve and the core fundamentals that have driven growth in the CRL space to re emerge.
In the medium to long term, we see increased opportunities to deploy capital more cost effectively and build our global franchise.
However for the time being we're well placed to weather the challenges of the pandemic and position ourselves for the growth opportunities that lie ahead.
Before moving to Q1 I'd like to thank the entire icon team for all their hard work and commitment during this challenging time.
Your safety and we'll be at accompanies priority.
Auto our mission is to help our customers to accelerate the development of innovative medicines end devices that save lives and improve the quality of life.
Over the years, we have helped to bring many such treatments vaccines and medical devices to market positively impacting the lives of millions of patients. This leads us will remain during the current prices as we work on a number of important cobot 19 trials on behalf of customers as well as much needed treatments for other illnesses and.
Diseases.
Thank you everyone and we're now ready for questions.
Thank you, ladies and gentlemen, I'll remind you he would like to ask a question today. Please press star and one on your telephone keypad.
If you'd like to cancer requests are stashed K. Your first question. They cost line of Ehrenreich. Please go ahead.
Great. Thanks.
James guidance that you just gave for the second quarter does it assume any sort of improvement throughout the quarter are you just extrapolating what you're currently seen when you just curious how you're thinking about things progressing throughout the second quarter.
Well first of all end I wouldn't call guidance, we specifically call with our outlook. So this is what we can foresee at the moment given were really not only when we haven't even had one full calendar month of of the significant impact March was a sort of.
A month, where the second half of it was much more significant over the first half.
And so our record more of an outlook and what we've seen going forward in terms of improvement during the quarter.
We havent modeled any of that at the moment, we're seeing a challenging quarter, we see it relative we see that we believe will follow at that at the bottom.
Of over of the challenges are at the at them at the Max of the challenges during the quarter. We don't see is of particular phased approach.
During the quarter the moment with literally just starting to come through April and start to get some initial indication. So it's very early days, but we believe.
The third quarter will be relatively flat will be relatively.
Stable in terms of bring the bottom of it.
Okay, Great and then even started abnormal cancellations are you willing that's more of the timing delay.
Or do you think this is also being a bolus or an acceleration in the back half of the year, if the environment normalizes.
Couple couple of points. There one is no we're not seeing any significant cancellations you saw our cancellation rate in Q1 was was on par and certainly is as we've gone through April we've not seen any.
Further cancellations above the normal sort of run of the mill.
Approach there we do see this being a relatively short term issue and we do see us.
Moving moving forward as we get into quarter, three in particularly quarter four and into next year that will come through we are that is that of course a seems.
So some sort of therapeutic will be developed fairly quickly and possibly a vaccine will be available within the next 12 months assa. So there are some assumptions with that but we do see that this is going to be a relatively short term issues that we need to deal with willing to work through.
But that in the longer term, we're going to be a very good position [noise].
Great. Thank you.
Thank you Sir your next question comes line of track Man. Please go ahead.
Thanks, Good morning.
Good afternoon.
One of the drilling a little bit more on the commentary related what you're seeing in terms the sites open versus closed. So it's been roughly two thirds of your sites have been impacted.
At some point.
How is that if you went from March beginning in March to beginning the April to where you are today, how is that trended at any given point and just to confirm what earn was going after you are assuming it stays where it is through the end of the second quarter. That's what your outlook assumes.
Yes.
Jack in terms this amended this train opponents incredibly quickly.
So so really.
We talk about about two thirds of besides being impacted when I say impacted that's a month.
A number of things CRM is not able to get access to recruitment on hold or pause.
The inability to into sort of exit due to do.
So what do visits.
It on certain dividends, so it's a but there's a variety of different things there that that come into that sort of two thirds of two thirds of sites and really it I want to say happened overnight, but certainly within.
Sort of I'd say three to four weeks that happened and to be honest, we're not seeing at least in the last couple of weeks any further.
Challenge is there any further diminution of the of our ability to exercise so about a third of them remain open twos.
And we bring doing remote monitoring builds on on many of the sites that we can actually go to physically but that number tend to have very quickly and it hasn't it hasn't at this stage anyway further diminished and so we're hopeful and importantly, we expect that thats going to be around the numbers from here it should start.
To to improve it should start to come back to file as and I think it'll be into a fairly staged and fragmented manner. These sites start to open up as the country's open up and as the states that they've been open up some will happen relatively quickly others will be much slower others will have.
Priorities on either doing covert draw the doing other things. So it's not just whether the sites open up with this country's open up it's the priorities within the sites on what those clinical trials are we are highly.
Involved in oncology saw in for quality trials, and we believe ontology draw the likely to be a priority as they reengaged and as the sites Reengaged. So thats the to some extent advantage, but the bottom line is.
We believe where we've hit the bottom with the bottom pretty quickly and it's a slow uptick from here over the next six to nine months.
Great and then.
It does seem like the biggest impact is on the monitoring and recruitment, but theres, obviously other aspects of clinical trials as well I was just curious you could talk a little bit about any success, you're having at maybe reallocating.
Where you're focusing the resources of your sea Ray is you know as some of these sites are close just what are some of the things you're working on.
Sure.
You're right the monitoring of our studies is the major impact on this at the moment.
That's that's significant but we I think the one of the benefits we have as a business with that different service areas is the ability to transfer resources across so for instance, some preclinical research groups of people who visit patients.
In an album environment.
The people within our clinical business, who have nursing qualifications and a qualified to do that work.
How are you able to potentially transfer and have been what we have been looking at doing that as we've seen as a lot of inquiries lot of interest coming in on that business. The other part of that business is RFS fee, which hasn't at this stage being impacted any any significant way and we have in fact.
A requirement for people in that business and that and they are hence we are able to transfer a number of people from our phase two phase three business in the clinical space across two hour.
Docs FSP business, so so the ability and the and the collaboration in the flexibility of resource management and deployment is certainly an advantage that we have aware actively looking at.
And how we at how we do the Insulza that we can.
Minimize that lack of or maximize utilization of our resources right across the business.
Thank you Steve.
Thank you Sir your next question comes line as Elizabeth Anderson. Please go ahead.
Hi, guys can mining and thanks to the update.
Question about how sponsors are reacting to sort of more digital solutions. I mean, you mentioned satellite I'm sure Center. That's early early conversations that how how are people are people looking at it more like in terms of for ongoing trials is it sort of things that they can convert are there particular areas that you're seeing more interest in.
Details you can provide that would be helpful.
Yeah. This is it's Steve it's early days for that we're all sort of just running around sort of make sure that we get in the basic stuff done. This I think there's a lot of talk around how the have a pandemic will impact the clinical trial process.
In the in the longer term and I think what we we could all see certainly more remote monitoring.
No not margin has been gone for water, there's nothing terribly knew about that I think they will it will certainly help to accelerate that within some customers. We certainly see some more interest on the virtual trial, but this is not the time to be setting up virtual.
Trials or hybrid trial. This is it's more discussion in Nevada talk about it but.
We need a more stable environment I think in order to actually move that full with others I do think there's no doubt that thats going to.
Thats going to happen going forward, and we'll see more digital opportunities and virtual hybrid type trials it'll accelerate the conversation I think and I certainly see that happening however been around this industry long enough to know that.
Things don't happen always as fast as pets, we'd like to or we think they will happen. So at the moment everyone's telling you how things are going to be never going to an assignment, it's all going to be different.
That will that will inevitably to some extent be true, but as we get through this I think those conversations will increase people will be more ready to pilot and to move forward, but I don't see at essentially a dramatic change in the digitalization of clinical trials at this point, there's not enough not in the immediate future.
Yeah.
Okay. That's helpful. And then if we think about it sounds like the RFP is that you guys have seen in the last few weeks and now you know obviously the funding market for biotech US is largely close but you know they've raised a lot of money are you seeing any sort of like significant mix shift I mean, obviously Amtrak cobot RFP is our way up but in terms of vast FDR book of business.
[music].
We don't give our quarter, one and remember quarter one was.
Moderately normal until the last two to three weeks I suppose opened in terms of quarter. One hour RFP dollars were up in so the high single digit numbers or was it was a good I was very pleased.
With that dolorosa availability it was across the spectrum large pharma smaller pharma. So we saw so we're seeing plenty of opportunity and that that.
Continued at least in the in the in the last few weeks, we haven't seen a significant drop off in opportunities there was a little bit of a slowdown in decision, making towards the end of the quarter with everybody.
Sort of taking stock of what that we're doing and I think that that may well be the case in quarter, two as well, but overall opportunities only on a year on year basis, we're actually.
Following the trend that they have over the last few years.
Okay.
That's helpful. Thank you.
Thank you hear next question comes lineup Dave Windley. Please go ahead.
Hi, Good afternoon gentlemen, thank you for taking my questions. Hooker you are healthy and say sounds like you are I wanted to try to get a little more precision so.
Steve in your comments about our sites impacted you said two thirds when when you call a site impacted is that mean that it's basically totally inaccessible or is there a way to think about kind of partial accessibility and an ability to move forward.
Just wondering kind of definitionally around that and then.
In terms of your ability to pivot to digital remote risk based type solutions are you able to put.
As a percentage on that like the number of visits that you've been able to switch to onto some type of digital remote access that mitigates the knee overall downside to visit activity.
Yeah, Thanks that hope you're at Bureau, well as well and it's a challenging time for everyone, but here on the growth trying to stay side in terms of of saw its impacted.
This is a every site a little different to be honest, we did the why I'm looking at that number is that we talked about the 65% to serve our impacted in some wide. So it does that is certainly not totally Unix inaccessible thats not the case what that means is.
The the CR rise can visit on site.
All we're not able to do risk based remote monitoring or they.
Right.
Okay.
Okay.
No.
We want to start we want to get study started no question about that they will be an element of catch up as well as be some work that we can do that will catch up.
There'll be some work across that we won't be able to catch up on as well. So it's not it's not exclusively with just delaying revenue some of it probably won't happen or at least not enough in the short term, but there's certainly at a large component of work I think we'll be able to.
To catch up as well that.
We certainly is a huge amount of activity around the code space.
I'm actually really encouraged about the speed at which these trials are getting up we had I was talking to a customer the other day, who submitted a.
And then and I, Andy and three weeks later, we think we'll get a first patient. So this is three weeks after the submission of a line, which is unheard of in my experience anyway. So.
It probably testing a little bit some of the norms of.
The regulatory process.
Not suggesting that we're going to get Sina studies up in three weeks in.
On a regular price in the future, but I do think we're looking hard at what we do as an industry to get study started and perhaps challenging some of those excepted sort of timelines and it may well be an opportune, we talk about digital technology and virtual trials. It may well be an opportunity I think to get things moving a little faster in a more norm.
Bill setting.
In the future so that I think is.
I have some optimism around I.
I think we can handle the move back into the sites I don't think thats going to cause is too much time as we get Lexus.
Okay. That's helpful. And then just secondly can can you comment on on the impact on your M&A pipeline from from covered disruption.
Yeah. Thanks on 700 here and I think obviously the focus of the organization is weathering the storm at the moment, we've done a lot of M&A and we're very confident obviously businesses like Symphony has been a great bonus to is over the last couple of weeks on but certainly we'll be looking on being a little more coupled with our balance sheet over there.
Couple of months, we've done some significant buyback in the first quarter I did mentioned in my prepared comments, we're also going to be holding enough the moment.
So I think it will be it'll be one where we will be focusing internally.
And really making sure that our balance sheet remains a very good price over the next couple of months.
Say next couple of quarters.
That's where the focus will be.
Okay. Thank you.
I would just always is that I think blend is absolutely right. The focus at the moment is on cash conservation and making sure we get through these immediately but in the longer term as I said in my comments will we do think there'll be some opportunities and we got to make it by so we're in a position to take advantage of those those properties typically crises.
Provide opportunity, we're very aware of that and we want to be able to benefit from that but it's a more longer term.
Opportunity I think.
Understood. Thanks.
Thank you Sir your next question comes line of Stephen back Sir. Please go ahead.
Hey, Thanks for all the information. This morning, so you touched on us a little bit and obviously the business is quite hard to model over the near term, but when you look at Q2 revenue with the outlook you guys gave her down somewhere between 10% to 17% year over year and off your previous trajectory, obviously by more than not and I think what a lot of people are trying to figure out as weather delays.
Man and the associated revenue over the next couple of quarters is being lost or replaced with lower cost services are kind of simply shifted out for the right. So I'd love to get your perspective on that and anything you can say by the balance between you know what feels like it's likely to be.
Last versus or coupled with recoverable at this point would be really helpful. Thank you.
Thanks, Stephen I'm I picked up on the as well as Brendan here I mean is there any effects that we are seeing at the moment is more on the delay side of things the book of business in the backlog that we have as we said we haven't seen significant constellations off the back of this so it really is about the access diversity of our sites and getting our series back to those sites.
And I'm really ramping up in the trials none of the trials are going away. The activity levels are good for what we see coming through the door and from an RFP perspective, it's pretty solid as well so we'd be hopeful that this is delayed because of that issue.
Not as time goes by we will burn show our backlog.
And get back on course, certainly as we get back into the back ended the year. So we don't see any kind of give me devaluation of our business and we don't see significant shift away from in terms of profit profile of our business lighter and as Steve said, you know our FSP business is doing well during the course of this year and there are certain parts of our businesses.
Like the and the in home monitoring and the home.
Nurse business that will be doing well during the course of this years that may shifting a little bit, but overall, we don't see any long term shifts scenario inherent profitability level.
Thanks, and then just as we think about you know at some point will potentially be out of sort of this lockdown situation that we're in it essentially the economy is going to be in what is more of a normal recessionary environment. I guess what are the key metrics that you guys are watching.
Demand side there there's anything you know what's different about your business. This time versus the last recession that we had.
Any change even doing there to recession proof your business would be great to hear about thank you.
Yes.
When we look at our metrics seriously.
Hey, very regular basis right across the operational group. So yes. It is all of the normal operational metrics, where we're looking at randomization rights.
CRD days on side contacts with investigators.
Lastly, the metric around the sites availability is going to be one that we'll be watching very closely and as I've said you know I think we've seen.
The bottom of that certainly over the last week or two it hasn't got any worse, so I'm not sure I want to core.
Victory on that just yet, but we're certainly seeing I'd like to think some hope or at least at experiencing some hope that that number is only going to get better going forward to be fewer thoughts to impacted I suppose but those are the.
So things on a fun then it can talk obviously on a on a financial basis, but from an operational point of view, we measure them a multitude of key metrics across our business and those are all of those things will be relevant as weak as we swing back into into action. Brendan you want to work on the on talk about the financial stuff.
I think from the financial side, obviously, we put in a number of cost containment and measures that were you know that are going to.
Actually two two houses focused very much in the balance sheet in the next couple of months to make sure that our cash collections are solid and make sure our balance sheet position is very solid as Steve said industry, leading balance sheet and we want to maintain that they could use of it on the back end of this hopefully the passing of this dynamic.
And we'll be looking at those metrics. Every every day you save every month, you know and making sure that we know when when we can.
When we can invest back in the organization that we are ready to do that and so would it be careful management on the day by day. This is Steve says.
Thank you, Matt I'll take this termite opportunity to remind all participants just stick to one question at this time, if there is opportunity for most side of the question is sort of put down at the end. Your next question today comes from the line of type Hudson. Please go ahead.
[noise] Hey, thanks, Steve if we think about getting back up and running can you talk to how much of a differentiated stacie set ownership is on your part just competitively versus some of your peers and then yes, we think about the checklist that can be required to get some of the sites up and running you know how to think about things like FDIC sign off in terms of changing protocol is kind of mid trial.
And you know agreeing on costs with no splitting cost with sponsors can you talk if somebody other things beyond just habitation seem to have underpinning to travel centers that are required to get touch up more.
Sure Targa your I'm very I do believe outside network is going to be significant advantage for us.
As we get a project back up and running as we come as we come through this year. These are Steve just sorry that we have our own folks in integrated sites embedded and ER and who we have very strong alliances with an who do recruit beta and as you start up better faster.
Who recruit faster new have ultimately better better quality in terms of protocol volatile or few of protocol Vod isn't the inquiry so.
I think it's going to be an important advantage for us, particularly early on as we as we get back to are they going to be ready to go and very much accessible as they are at the moment where of course local guidelines will allow them to be so.
Having said that I don't want to overstate that because there's still a relatively small part of our overall patient recruitment.
Service, so it'll have an IND.
<unk> as an important impact on out on our business, but I wouldn't I don't want to overstate. It in terms of the materiality of it in terms of the regulators and the sign off of a protocol changes interested you know I've been very encouraged by the interactions weve seen with with the FDA.
Certainly through our Acro the CRL Association, we've got a lot of engagement from from the am I and the FDI in terms of of how we document protocol changes how we.
How we communicate that how and what within one what those.
Those changes are so I think the regulators have put up some guidance and have also and I think I think we talked about sponsors moving on and in terms of their attitude towards digitalization of trials I think we'll see the regulator is also seeing that this is going to be an important component of the trials going forward and.
Adjusting the guidance in their outlook in the viewpoints to make sure that they are embracing embracing that that's.
Again at the end of the day, you've got to do that draws and they need to be rigorous and the data needs to be and so we have to have the auditing groups and all that make sure we catch up with that if we don't want to be in a situation in a year or two where we're submitting these trials for approval under a questions around the data I don't think we'll meet with because we're very deciduous away I think all industries that Doug.
Commencing those sorts of the so to changes in making sure that were very clear on what's being done and why it's been done and what would the circumstances et cetera et cetera. So I.
I think the regulators have been extremely accommodating in under the circumstances and also very fast moving out of the circumstances in terms of of our customers and costs and Ginger again, we're having a number of discussions clearly.
On a range of all of our projects around the cost implications of the of the pandemic, what's happening clearly were withdrawn and.
Minimize their their cost overruns try to work proactively with them to to help to make sure that we don't blow their budgets out but there are there are cost implications all in a number of cases and we have to reflect that we're having good discussions and negotiations around and then how thats how that's being.
Three that's an ongoing process and of course every project a little different every customer a little different.
But we are engaging with them on that and it's it's a they certainly understand the challenges were all on the.
To make that to make that will.
Yes, I'll follow up I appreciate you talking about the number again down from our corporate related work can you just maybe help us put some context on how much you think public related vaccine in therapy or could be a tailwind potentially this this year and then how should we think about central lab coming back in the context. It. Thanks.
Yeah.
You know.
I think I see good code would work such as we're seeing it.
We'll be of will be a tailwind will be a but I think it'll be relatively modest the benefit of course is that this is vaccine. We ended the urgency that I see around getting these studies up and running is.
Quite frankly incredible and.
No not surprising given that the challenges we're facing but it really is moving fast. So I think it will be a tailwind for us to you.
As a tight again to be too bullish on it because it's still a relatively small component of our work on the trials need to get going.
No. We what we've seen is is really rapid.
Start up and ability to recruit having said that.
There are some trials that have recruited very quickly and we're starting to see the lab samples come through so.
So so there's no doubt that they are going to help us and the work there is going to be a positive how much is how much I find it hard for us at the moment to forecast.
The materiality of that or even put in put a number on that it will be it'll be a certainly a wind going into right direction and we can certainly do with all of whom as many of those sort of wins as we can you turn to central lab I think I quoted to you better 40% reduction from a run rate in February.
Samples you know I think I think again that will that will come back slowly I don't think we're going to get much lower than that it might be possible minus 5%, but I don't think we're going to go too much lower than that some of the as indicated some of the covered work as it ramps will be very we'll start to ameliorate or attenuate some of that downturn.
And we were engaged in some of those trials. So this possible sort of attenuation upside there but.
I think would I think 40 to 40% to 50% is probably the Nadia and will slowly move back up I think it'll probably take most of the year to get back out to a normal run rate.
But I do think it'll get better and that will be I believe some catch up there as well samples will have been taken that havent been sent.
Some examples of course as well so what will be catch up but there will be I think the opportunity to for some catch up revenue in the lab space. In addition.
Thank you.
Thank you and your next question today comes line of Robert Chains. Please go ahead.
Thanks for the questions I guess, Steve you know clearly you've shared your view that you think this or the company thinks this could be somewhat short lived deal recovery over the next six to nine months I guess, maybe just to dig in a little bit more on what informs that view as you sit here today appreciating obviously the to extremely fluid.
Situation, and then just related to that as far as sites being able to come back online.
Given the drop in patient visits that we've seen globally. How are you thinking about clinical trials being prioritize relative to just routine patient visits, which clearly we'll have a backlog as well.
Yeah.
Well what informed our view this is a relatively short term I think there's a couple of things Robert.
I think there's no doubt, though this has been the world's being a little bit surprised.
There's been some some governments et cetera, being caught out little bit some.
Two three months ago thought this was going to be a much.
Not much less of an issue than it is that it's turned out to be so so I think that's one area. I think we are full ward and clearly there's a possibility that the virus comes back returns.
In the fall in the northern Hemisphere, which which would cause if it does there will certainly be some some further challenges and however, I don't think will quite.
To be quiet the impact that we've had over the last month and a half also so I think that I think the the preparedness. So the understanding of what we need to do I think is it will be much more available to much more in place.
For the full I think Thats a positive I do think from what I've seen around not so much of vaccines, which I think might take a little longer but around the theres. The therapeutics I think we'll have made some progress in the next three to six months in terms of therapeutics that can be deployed, particularly obviously for the high risk patients in patients who are.
Good.
Severe enough in a much more serious situation I think that will help us.
So so there and then I think as I said the whole.
Community willingness to address and to move into the move from we have it faster than we've moved as it as a global community. This time will be there now once you go overlay.
Potential for the flew to be an issue in the fall as well and you add this and all the rest of whether there's a vaccine going to be available I think that probably challenge that we challenging for for the full but there'll be some I think some experiments that some some phase three trials certainly ongoing out there, which will perhaps help a little bit as Walter.
That's the sort of does it sort of information that sort of informs my view that I think.
We will be moving forward, we will be getting better, but I don't think we're going to be back to normal in quarter four.
But I do think we're going to be certainly on the open up and as we get into quarter. One of the first part of next year, we will return I think to a much more normal cadence.
Thats certainly my expectation in terms of the priority for clinical trials facades.
No.
I see it you know this this might actually even help in some ways that the understanding that we need treatments for things like per the 19 and many other diseases as well.
Could push sites to be more thats more involved in in clinical trials as I said I think the regulators have seen.
Moved very quickly to adjust the protocols and they've been very flexible on that I think I think the the timelines.
Let the three weeks line data first patient that won't happen on a regular basis, but I think were challenging some of the norm, saying and I think the administrative processes around clinical trials to be challenged a little bit I think that may well be a net positive in the more medium to long term in terms of trials.
It will insights in the priority of trials clinical research as a care option is something we've been pushing particularly through our sort at work for a long time, there I think through a number of organization to do the same thing and so we see that as something that really is perhaps even going to to get a tailwind or get a push along from this pandemic I've never heard.
So let's talk about clinical trials in the new drugs and the development process and I think.
In the public's imagination, the public understanding of what we do as little as an organization as an industry is going to be enhanced by this whole this whole process and that and say they will have some long term benefits.
Okay, great. Thank you.
Thank you Sir your next question Snake comes line of John Kreger. Please go ahead.
Hi, Thanks very much.
Steve Congrats on the Pfizer and now are you able to elaborate at all on any interesting sort of changes of scope or structure of that relationship or should we view. It is pretty much kind of steady as she goes versus the old contract and do you have any other kind of significant renewals to do we should be thinking about.
For the remainder of here.
Hey, John.
No. There is there's nothing in particular that we that we changed in terms of the fundamentals. There is some areas of of discussion, but really it was a very collegial and.
Very positive.
Negotiation with Basel, So no major changes.
To that and as I think about it no I don't think there any.
Significant alliance agreements that are up.
Discussion on negotiation, specifically anyway for the remainder of the.
That said that's good news and then one quick follow up you mentioned, China showing at least some signs of opening up are there any lessons you can take away from that as you watch that play out as to what you might see later in the year and western Europe or the U.S.
Okay.
Yeah, when we look at how China restarting the to open up, albeit relatively slowly in the and some of the other Asian countries as well and we you know we do take some solus from.
How thats, how thats moving forward and we believe that it can be.
Broadly applied.
You know obviously John is a relatively small part of our business, so I hesitate to draw too much from.
From one particular country, but given that it was the epicenter of the initiation the depart the start of the hope endemic in the fact that it does seem to be moving on now it gives us again hope that this is a relatively short term.
Issues that we believe we can we can get through this I bought into the year.
I'm, a little care I want to be a little careful about lessons learned from improved.
From China, John just got back to your previous question on the on the.
Alliance I think I think the.
The other areas in the labs, where we've been seeing some some opportunities and certainly we've been able to.
Agree in a couple of significant opportunities alliance partnerships for our lab operations up Central lab, and our biological lab in the last six months on.
Tend to think of it about critical of course is it's a large part of our business, but our lab operations.
I've been able to secure a couple of partnerships recently and Thats.
I think is puts them in a good good position to really build that build that business.
Great. Thank you.
Thank you and your next question stay comes line of Patrick Tonight. Please go ahead.
Great. Thanks, So maybe just on the biotech funding environment I know you mentioned a couple of times, obviously has been a bit of a pause here given the disruption new raises have been pretty minimal when you look out to the other side of this and even maybe the mid term view 21 years like that.
Your opinion change in terms of what the growth rate could be actually overall market given a little bit of pull back and that funding or do you think things come back pretty quickly and we're in a pretty normalized market for next year.
Correct.
Yes gone so.
They're not bring to have a crack at that one.
No I think you know we know we've seen a pretty stable environment for funding perspective, and the guy that we've seen there have been well funded as they came into this year. It's some good science that there as well, which is always the underlying piece in terms of what our biotechs deserve to get from that or not and as we go out and I think your question has a good one in terms of the longer term.
We still think there's there's opportunity there it's been it's been it's been a really strong part of our marketplace I suppose the fundamentals of this you know pandemic that we're saying don't wait change the fundamentals of drug development.
So we do see that there is continuing.
Yes.
Well I have been a lot of innovation lot of creativity, and we'd expect that that the good signs and decent funding levels as well as the fact that folks are still looking.
For you.
Fashion and putting out there assay persist.
I think a persistent might pick up.
This year as Ive been hurt global economy, probably will vary as we think were 2021, we'd be very very hopeful that we'll see anup bounce back quite well.
Great and then Brent Amir another quick one obviously dsos are going to big focus for you guys I assume this external shock changes things a little bit, but what's your perspective on the focus there as we go through a few customer.
Yes, so there isn't where we still very focused.
As an element of our business and.
We saw a decent progress I mean, we didn't see any great demonstration to it as we came into the first quarter and I see even as we started off Q2 cash collections remain robust results.
So we're not seeing any particular issues there yet that said, we're going to be keeping a close focused on it as we go through the months and quarters ahead.
But at the moment as still looks like we're in a very solid position.
Okay. Thank you.
Tim.
Yeah.
Thank you and our next question Sneakers, Atlanta Sandy Draper.
Thank you very much for squeezing me entity ended the call.
And I got you guys are are doing well over there all things considered my question is on the expense side I mean, it's an area.
Probably.
It's done a great job there Brendan and when you think about unit.
Turn costs could.
Proposal.
And what.
Hi, guys environment are there specific areas you think you made a at being able to pick up more.
Now what we thought we really need to spend here, but we realized we can live without yes are we can do it differently and we do you think this changes maybe longer term, how you think about the cost structure, the business and or basically once things come back on due to all those cost so you're pulling out all have to ramp back up in line, if not faster than the revenue. Thanks.
It's a good question Sandy we you know as we're pretty tight cost monitors on on a good day.
This is obviously been very challenging period, and we are thinking about our cost base from that perspective than have looked at the leverage that we really high we have we take that down is that.
Thanks chunk of that is or around.
Remuneration salaries and buy something I think that will bump back up that said however.
Well its own environment in this kind of.
As much work environments goes good.
Absolutely necessary, so we'll be looking at our cost base as it does ramp up some of it certainly will come back ended no question about that.
We'd like to see that coming sooner rather than later.
With hopefully a recovery in the general business environment.
Certainly we'll be looking at all cost lines and actually ran at asking the question can we do things more virtually do we need as much travel I think their questions that we constantly ask ourselves and I. Suppose this environments is a test it all businesses in the world as to what are they can be more gradual and how they operate so that's certainly something will will bear in mind as we go.
I appreciate that that was really my only question everything else been asked and answered thanks guys. Thanks.
Okay.
Thank you on our next question say consign upon haven't Donna. Please go ahead.
Hi.
Thank you.
But again and.
During the cold call late so I apologize. If this has been asked him. So I'll try to after a couple of questions from field I guess can you talk to us about how remote monitoring activities impact RCR on revenue and profitability.
Particular, I guess I'm in for setting how alternative site visits are could impact our pass throughs are based on some of my research and consultations. It seems like remote monitoring could be a positive mix or zeros product was curious if you could confirm that.
Yeah why not.
I think the potential for us to if we do remote monitoring effectively in well is it actually is a tailwind from a profitability point of view.
There's a lot of time spent and then I think it's also a boon for customers potentially do and that they will spend less money.
Getting the data review will be out to do I would say that give us more opportunity to do more work.
I think I think that it the dare I say a win win.
I'm sorry to see Theresa.
From a profitability pottery, but also from a from a customer point of view going forward. It does it passes I don't think thats going to make a huge difference a pass throughs in terms of monitoring a pretty modest.
Major part of the past recourse.
So you got a phase I would tell us why am I have a small impact in branded maybe comment on that but I don't think thats going to ever.
Huge impact, but I'm optimistic in terms of remote monitoring and how thats going to go forward. However, the end of the diagnostic it's going to happen as I said as fast as pets everybody thinks it is it will get the conversation going we'll we'll certainly be doing some more virtual trials and some more remote monitoring, but we were already doing quite a bit of remote monitoring any.
Right.
I think it'll just moves the conversation food and accelerate the conversation rather transform the whole industry. That's that's mine it's my assessment.
Okay got it.
A follow up I guess it's.
I understand that started in the startup or activation fees could possibly be most chrome to delays on potential cancellations and so can you tell us what percentage of your studies are in the startup phase versus accrual and pass database lock out.
Oh.
And I'm sort of I can give you sort of high level ballpark.
I'm not sure why we certainly haven't seen any evidence that the studies and start up or more likely because we haven't had we had a link to cancellations which is.
On par with where we normally be so I don't we havent seen an uptick in in cancellations that happen and certainly haven't seen.
Thing related to the start up.
Of studies in terms of cancellations, you know I would I would I would say probably 20, 25% of our studies are in the start up about 50% or in 50% to 60% or in sort of ongoing recruitment and.
And enrollment.
And data plays and then there's probably 20% or instead of the final stages of database lock and report writing etcetera.
Very broad high level figures, but.
Thats, where it would be.
So we havent seen evidence that.
Studies early on in the last cycle more prone to be cancelled.
Okay. Thank you and SGN I guess, what percentage of revenue actually picked up by 10 basis points on a year over year basis. This is the first time that I see this happening in many years.
Can you can you talk about how perhaps the kogut 19 dynamic could be impacting your or would impact if any at all your ability to continue to offshore.
Right, that's DNA leverage.
I mean, we'll continue to look at that one as time goes by I mean that will I don't think this is a block to any of the cost control cases that we've done in the past that there's no. There's no real issue like one country, our north country, we better or worse from that perspective.
And to be honest as well on just the dollar amount didn't change from Q4 Q1 in terms of M&A. So yes in percentage terms you see villa mix for that we'll continue to manage our cost basis adjusting Michael.
Alright, thank you.
Thank you and your next question comes line of Dobrynin. Please go ahead [laughter].
Thanks, Rob Thanks for taking the questions.
I guess I was hoping to get a little color on how you think about.
Arms are kind of gradually throughout the year, maybe Q4, we get backed or maybe Q1 from normalcy, but if we think about the 65% BARDA impacted in some way shape or form today.
We're sitting here like December 31st I mean is that is that is that down that 5% 10 percentage. Obviously, we don't have a crystal ball, but youre better position and we are to cannot have a sense of how these assets may open up.
But I missed the first part of the question, Dan, but I think would you asking is of the sites that are impacted the 65% today, what's the sort of the logical sort of bring bring back or what but what that's what right will I come back to being is up.
Exactly yeah exactly.
Okay. So it's always out there I think the 65% is isn't that the I don't think we're going to go much below that maybe it'll play out maybe it's a 70%, but I think this I think that is pretty much than idea you know I think as we go back if we get deeper into the second quarter third for I'd like to think that by December 31 that now.
I was going to be much closer we are I would just say under 20% and.
In that in that sort of range and I'd love to think zero.
But but we're not expecting this to completely disappear.
In the sort of immediate future, we do think there'll be some impact other than I do think that those 20% of sites that are impacted if it's that number.
They'll they'll be accessible in terms of remote monitoring.
Now you have some impact in terms of slower recruitment rates et cetera, et cetera, but I think it'll be a device.
30 of sites, but still a reasonable proportion.
That will have some impact I think if we get into next year that number will I think yeah like assuming that the virus doesn't reappear and we don't at all that further lockdowns and that's a big assumption, but that's just that's what we're saying as we get the first quarter I think that will get to zero.
Got it and then and then that's a good kind of lead into my follow up question, which I think you mentioned earlier in the conversation there'll be some ability to catch up on kind of whats been delayed here, but we had.
I will conversations with some experts and I think investors alike mean 2020 volatility is just you know as extreme but a lot of people are trying to think about 21, 22, and how it looks on a normalized basis and we sort of mixed things about the ability to catch up next year and you could see actually some overage you can actually see some upside from where you might be.
Colgate and 21 versus others have suggested maybe the capacity the system just can't handle <unk>. So it's really hard to catch up.
So I'm just wondering I you know as as you look ahead further.
It could you could you comment a little bit on and I'm not expecting number but as if we think about going beyond 20, and the potential to catch up and see possibly some upside is that fair orders structural issues in the system and capacity issues and things like that that just will.
Lead to more of like just a deferral in a push out.
Yeah.
I would hesitate to say that we would be able to catch up everything that is going to.
Every every sort of reduction, but we're going to see in the next couple of quarters, but I think I think there'll be some catch up.
I think this I think the system is maybe part of the issue, but at the end of the day of data isn't collected or samples taken because patients didnt visit or you know there's not much to catch up you're just going to have the miss that that piece of data that sample.
So it's certainly won't be anything like a 100%.
And so I I'd be very careful about.
Upside or tile wins, I think I think it's more likely we'll let the catch up will help us get back to a more normal cadence and then that our normal gross.
Curve will kick it that's the way on thinking about it at the moment I don't think Theres, a huge bolus of work out there that we're going to suddenly be able to get down in.
Quarter, four or quarter, three that'll make up for the challenges we're going to see in Q2, and and Q3 I think thats that would be overstating it but I do think there is some work that will and that uptick that I think we'll see in quarter fall part of that will be.
The catch up with that we'll we'll be able to do.
Great. Thank you.
Thank you and our next question Snake US line of Eric Coldwell. Please go ahead.
Hey, Thank you so.
First one it was briefly address I think I got the answer but I want to be very specific pass through versus service level impacts both for bookings and revenue outlook. Please.
Cost reverse just let me go to ensure I understand your question you're looking for for water well, you've got revenue down sorry, you've got revenue down tend to 17% in the second quarter is pass through or at the midpoint of that range, just like service or more or less.
Thank you know I think you can buy god given that than most of the impact is in the clinical business, where the a pass through it happens Eric you can you can model in the same lines and faster on direct equally.
Equally thank you.
A second question here.
You know tons of cost actions cost controls all the rational reasonable stuff, we never I don't think we ever got it actual number on the savings projected.
We'll be very helpful. If we add on.
No no you didn't get an actual number Eric and I'm not sure you're going to get an actual number. Unfortunately, we will come on I can't tell us your arm.
Right now.
I will be looking at it there was the reason being Eric listen we're all well here. We've given you guidance for Q2, we're very hopeful that we see you know a better recovery and we're hoping for that in Q3 in Q4, but that number might have to change if we don't see the pace of that recovery. So it is a little slow it at the moment onwards, obviously, it's baked in.
For the to the earnings guidance that we've given you for Q2 beyond that obviously, we're getting more color when we get the Q3 and.
Maybe I could ask it this way it looks like based on the guidance given if we you know if our quick math is accurate that you're calling for basically a net 40% decremental margin in Q2.
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Would we be expecting that to improve the decremental to improve as threeq to Fourq, you unfold as volumes come back and or maybe some cost actions happening in the second quarter are fully recognized into the third and fourth and and if that decremental target is to improve maybe some color on how much you think it.
Could improve.
I think it's fair to say that our expectation is that it should improve in Q3 in Q4, as we see revenue coming back in and Dot Dot Dot Dot being said I think there are cost actions, it's depending on speed.
The revenue comes back that will actually at ease up on a little bit which will probably keep the marginal flatter so probably the way to look at it Eric from your margin perspective. This is not a massive amounts of variants. So you're probably in a 2% margin range. As you go through the next couple of quarters would cost containment and managing that profile as well.
When you come unstuck.
That's very helpful and last question you have highlighted some businesses that have done.
Performed better than more stable than the in home nursing home monitoring the.
The remote monitoring of course functional service provider are there any other businesses you would call out that have actually seen upside from pandemic response and implications taking things like maybe bio stats, but I'm not sure and then Conversely would it be passed.
People to get you to talk about which businesses have been most impacted on the negative side Central lab, obviously bigger impact there than I was.
Hoping for.
Maybe thinking phase one and some other areas that are possibly in the short term have been more severely impacted but I was hoping you could go into a little more granularity on that.
Yeah, but really I meet with the upside I know youve, we sit outlined Eric where we where we see them in the symphony that the patient services. That's it again, a relatively small part of our business, but thats.
Saying a lot of activity.
Going forward, we do think decide businesses is pause is poised for some opportunity as we get back into restarting study. So I think thats an area, where we're confident is going to is going to move along nicely.
In terms of other pharmacovigilance medical monitoring this thing I'd certainly no diminution I suppose in those those parts of that clinical business.
That's the whether there is upside there I think it's a little too early to tell us we're certainly not saying, it's a dramatic upside in that in Azure that we've certainly seen plenty of work still going on there.
Yes, that's the data management haven't been impacted too much at the moment, but I again, I hesitate a there's not too many areas, where we're really seeing upside at the moment vaccine trials and no services I think you'd probably be.
We're seeing some opportunity, but that that those vaccine trial will play into of course that clinical grade, which has been impacted and thats.
We talked to I think we've talked enough about that phase one we've certainly seen some some impact again, it's a very small part of that business. So it's it's it's not hugely material, but but the the CP use that we have we have the once the view in San Antonio certainly is has been doing a very limited amount of work and some of our.
The other sites that we do early phase studies and have been fairly limited as well. So I think those are the areas that we've seen sort of.
Most impact on the other than the others on the back on the Upsizing I think the FSP businesses.
Certainly continue to two.
To expand based off some significant wins we had.
Back end of last year were actively recruiting and again as I said the ability of for us as an organization to move in shift and redeploy resources take significant resource costs out of one area and deploy them in another where we're actually earning solid revenues is is that I think a strength of our.
Organization.
The.
Thank you very much for all that it's been the longest call an icon history I think three times your enormous so Allah I'll, let it go there.
Thanks, Eric.
Uh huh.
Thank you and our final question Snake has a lot of George Hill. Please go ahead.
Thanks, guys for taking the question and I'm not going alone are called off the hook that easy.
I guess, the one thing it hasn't been touched on is can you guys talk about I guess engagement by client size up then should we should be thinking about the sites that are continuing to do business, where they think you expect to come back first would be I guess is there any correlation between client size or client funding type.
Where is it more oh therapeutic area, which we were we should see kind of the growth come back first of the business come back first.
Hi.
George It it's a little early to be calling Ah. So the correlations in that I hesitate to do that in terms of years logic lines or smaller kalonzo midsize car doing things differently certainly the.
In terms of how a larger larger pharma customers have taken a fairly conservative attitude I would say or approach in terms of EUR of of their trials.
Perhaps the the buyer takes a little less so in terms of specific instructions around.
We should manage their trials at the end of the day.
Which is the sites and the availability of the sites is a is the major determinant in terms of what we can do and what I ultimately you're going to do in terms of our trial. So I don't think it's necessarily to the correlation between.
Between client size.
In that respect in terms of therapeutic areas as I as I mentioned in my comments, where we have a significant net of oncology business and I believe that will be less impacted than.
Some of the other more.
Outside less life threatening top indications clearly the vaccines are the Covance stuff is is high priority and that's moving forward very fast.
I think oncology will and as life threatening trials as lot threatening conditions will come back faster.
Than others, and certainly will reignite in terms of recruitment retail rentals recruitment faster than the others that the wed look at it and that's two out of in fact, most of the industries in oncology. So I think those will be a priority, but we'll see the rest of income backup in the in this in the medium to longer term.
Okay. Thanks for squeezing me.
Good.
Oh, we have no further questions I'll hop back to seem kind of for closing remarks.
Thanks, Thanks, Tim So thank you everyone for listening in today is the impact of the covert pandemic continues to evolve I. Tony is focused on protecting the safety will bring all of our employees and patients and continuing to service. The important work we undertake on behalf of our customers an intern preserving the strength of our business I want to take this off.
Opportunity again to recognize our entire workforce and thank them since sealy to the tireless efforts and the ongoing resilience the showing during this very challenging period.
Thank you everyone.
Hi, Thanks to each mass speakers that does conclude today's conference. Thank you participating he may on our disconnect.
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Mm.
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