Q3 2020 PRA Health Sciences Inc Earnings Call
Ladies and gentlemen, please stand by U S. P. R. A health Sciences third quarter Twenty-twenty earnings release call will begin momentarily.
Then please stand by your conference will begin in about two minutes. Thank you.
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Later, we will conduct a question and answer session and instructions will follow at that time if.
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As a reminder, this conference call is being recorded.
I would now like to us on the conference over to your host Mr., Chris guns, Lu Executive Vice President and General Counsel. Please go ahead.
Good morning, and thank you for joining us for the PRB Health Sciences.
Third quarter of 2020 earnings teleconference.
I would now like to turn the call over to our CEO Colin Shannon. Thank you Chris.
Good morning, and thank you for joining us this morning to discuss our third quarter financial results.
Given the continued pressure from Nicole with 19 pandemic under difficult circumstances in the world today and.
Im very pleased with our third quarter financial results.
We reported revenue and earnings that were significantly stronger than the guidance we provided in August.
Mhm Bosman revenue.
An increase of approximately 10% versus the third quarter of 2019, an increase of approximately 5% on a sequential basis and representing a netbook to bill of 1.28 for the quarter.
And quoting reimbursement revenue, we reported net new business awards of $986 million or a book to bill of 1.35.
We continue to see strength across the entire clinical research segment and quitting a strategic solutions business and a new authorizations are diversified across a number of different therapeutic areas.
Consistent with the second quarter after quarter, New authorizations included a slightly higher concentration of infectious disease studies, which was obviously influenced by the COVID-19 pandemic.
For the third quarter COVID-19 studies represented approximately 5% of total net you authorizations.
In addition, and and consistent with prior quarters with that now experienced any material COVID-19 related cancellations during the quarter.
Expectations for the remainder of Twentytwenty accordingly.
Okay 2019.
This increase in revenue benefited from an increase in billable hours, which was driven by strength across are clinical research segment.
As well as by a favorable impact of five $4 million from foreign currency exchange rate fluctuations.
The increase I, just noted was offset by a decrease in the Reimbursable portion of our revenue which continues to be impacted by the disruption created by the COVID-19 pandemic.
For the third quarter, the clinical research segment reported revenue of $732 million, where the data solutions segment and reported revenue was $64 million, an increase of 2% and 4% respectively.
During the quarter, we derived 56% of our service revenue from large pharmaceutical companies.
9% from small to mid size pharmaceutical companies.
17% from large biotechnology companies and.
And 18% from all other biotechnology companies.
Consistent with prior quarters. These concentration metrics exclude our data solutions segment and reimburse simple railroad revenue and are in line with what we have historically reported.
Total direct costs for the quarter, where $412 $1 million compared to $389 $3 million in the third quarter of 2019.
The increase in direct costs continues to be driven by increased labor costs in our clinical research segment as we continued to add staff to support current and future business needs and.
And increased data costing our data solution segment as we continue to add data assets to expand are offering and as we continue to see increases and renewal rates on our data contracts.
A $1.3 million unfavourable impact from fluctuations in foreign currency exchange rates also contributed to the increase in direct costs this quarter.
Direct costs were 51.7% of revenue for the third quarter of 2020 compared to 49.9% in the third quarter of 2019.
The increase in direct costs as a percentage of revenue continues to be driven by the impact of the COVID-19 pandemic that it's having on our business.
Selling general and administrative expenses were $115 million or 14.5% of revenue for the third quarter of 2020 compared to 12, 2% for the third quarter of 2019.
Expenditures for the third quarter, 2020 were $15.2 million compared to $20.3 million in the third quarter of 2019.
Our capital expenditures continued to reflect the investments we are making in information technology and in particular, our mobile health platform and the continued expansion of our infrastructure, which we committed to prior to the pandemic.
Our cash balance at the end of the quarter was $336.2 million of which $56.4 million was held by our foreign subsidiaries.
We continue to manage our cash position in a financially prudent manner and we believe that our current cash position along with the borrowing capacity, we have under our credit facility provide us with more than adequate liquidity to faced a challenging economic conditions. We are currently dealing with.
If they result in business interruptions, such as an unexpected closure of our phase one clinic the slowdown in recruitment activities or limited access to sites worldwide. However, we've used our best efforts to estimate the impact the COVID-19 pandemic will have on our business and the resulting impact on our financial performance for the remainder of the year.
We anticipate that our annual effective income tax rate will be approximately 23%.
Are effective tax rate may differ from this estimate if the geographic distribution of our pretax earnings changes from what we've estimated or if there are changes in the interpretation analysis or a additional guidance as issued by regulatory agencies.
Look for that.
Eric at this point, we have not we we continue to analyze that and look at each study individually and how we think pastors are going to come through in the future, but at this point, we havent had to take any material.
Right Downs for Passthrough coming out of backlog great last one from me data solutions.
You mentioned some impact from Cove at a couple of Reprioritizations on discretionary spend you said you factored that into your guidance I'm curious if you could help us with your thinking for Fourq and data solutions from.
Both the revenue and gross profit standpoint, if possible.
Well I mean overall I, you know where we are.
Faced with the uncertainty.
As you know Q4 is the big quarter and this is where a lot of the expenditure as disgrace using up budgets at the end of the year for Ford are really getting their plans and put in place for next year. So we wanted to be a little bit more cautious and.
On the amount of forecast that we wanted to and for 2020 guidance.
I'm not sure if we do at least that number make or whether you want to give more yes, I don't we haven't given a specific number that weve looked forward, but I think from a revenue perspective, Eric my expectation would be that it was would be roughly flat with where it was last year and obviously with the increase in data costs that we've seen over the course of the year I do expect.
Margins to be.
Slightly lower than they were in the fourth quarter of last year perfect. Thanks, guys. Appreciate it.
Your next question comes from Dave Windley with Jefferies.
Hi, good morning, I apologize I jumped on late.
You Didnt cover this in too much detail, but but I'm curious about.
How you foresee your.
Your margin progression.
You know as we've discussed in prior quarters I think you have not only kept a lot of your cost structure in place, but also continued to hire to meet demand.
And your revenue.
As we see in this quarter revenue is actually able to grow year over year, but EBITDA is down year over year, and so just thinking about if theres an opportunity for your EBITDA margin to kind of catch up to the trend line that we would have expected outside of Cove. It over the next I don't know 567 quarters.
Well, there's I mean, there is a couple of things that we have I mentioned Dave.
One is the da side as you know.
Joining the pandemic that tab Wi Fi to curtail the operations to us and extend for social destined, saying so the throughput isn't anywhere near what we would normally achieve so that's obviously going to hang over until we get some level of normality back.
So we're still operating at below well below a 100% capacity.
The what we are filled but it's obviously subject is well any corporate outbreaks and we've had a we've had a couple and we have had to be quite cautious when we're thinking through Q4 in our phase one facility.
And the other part is obviously when we're doing our best to manage the the revenue recognition piece.
Our utilization is still not where we'd like it to be and there's a lot about catch up there. So we expect this to see that improving I, just we get back to more normality. So we're hoping that by mid next year, we start to plan, but at this point, we havent really looked at our planning for next year for 2021 would just.
On an eighth position moving into 2021, I will give a lot more clarity when we start really sort of thinking through how we're going to do that.
Very good and then as a follow up on.
On.
To the revenue line and thinking about your backlog burn.
That has recovered really nicely in the third quarter.
Just.
Mostly impacted for everybody in the second quarter, and then kind of climbing out of that hole, you've you've almost really gotten back to kind of where you exited 2019 fourth quarter implies that that pulls back a little bit I wondered if.
You see some specific studies or start dates or things like that that are influencing that number or is that more.
More of a cautionary position as you see the regional outbreaks of of infection and thinking about the possibility the sites might have to pull back or shutdown.
Yes, Dave I think we have certainly been conservative in how we think the pandemic is going to impact Q4, specifically is cone spoke about the impact it could have on our phase one business I think there's a there's a couple of things there from a from a pass through perspective.
I'm I'm, assuming given everything that's going on in the fact that we're heading into the holiday period that my past years are going to be relatively flat with where they were in Q3.
And also as I noted in Eric's question before.
With what we're seeing in how conservative we've been with data solutions. We have we're not showing any growth. There. So I think you know.
Based on lease my calculations, I think will be flat.
With Q3, or maybe up a 10th of a point or maybe slightly more than that so no I don't show the burn rate deteriorating from where it was in Q3.
Okay. Thank you.
Your next question comes from Robert Jones with Goldman Sachs.
Great. Thanks. Thanks for the question I guess, just just looking at bookings it looks like pharma bookings were up pretty meaningfully year over year.
The buyer biotech obviously was not it might be definition, all about whats in what bucket, but just curious if you could maybe touch on what you're seeing in those two those two cohorts I know theres been clear focus to pivot to biotech. So just want to understand the trends you're seeing within the pharma client base versus the biotech client base.
I think the trends have been the same I think you know some.
Some of what you're seeing particularly this quarter is and I think we referenced last quarter as we are starting to see some.
Some strength in our strategic solutions business, which I think collyn referred to.
In his prepared remarks, so obviously that business is pharma based so.
Think you are seeing a little bit of a shift up in farmer, that's being driven by our strategic solutions business.
Got it no. That's helpful. And then I guess, maybe just looking at Covidien I know you saw step 100% of bookings that were coming from Covidien I'm just curious as you sit here today any.
Any change in thoughts as far as how you're viewing the covert opportunity as you look out into next year.
We are we're seeing that as we're learning how to get through the pandemic and manage our site.
We do see pathways that where were able to keep on top of the work I mean, and so obviously I keep going back to phase one because obviously one of the impacts there is getting volunteers and today and to the studies.
I am, particularly and the Netherlands, where the close the borders and we got a lot of volunteers coming from the surrounding countries that are not allowed node and also that can impact the pace of workflow and so just really making sure that we can keep this the sites active and support them as best we can and what with our cloud.
Things to make sure they're getting information and not when we do get access to say is that we are able to quickly get the data and.
As expeditiously as possible. So you know as we're doing our planning for next year, we are going to know a lot more of the effect as we start to approach and go through this win.
The cold weather piece.
We're seeing obviously the closed down in Europe.
Yes, Casey is reaching over 100000, a day in the U.S. is alarming and I think you know as nice certainly not going to go away quickly.
We do see light at the end of the tunnel where are the vaccines are going to have obviously come stronger at the beginning of the year and.
Maybe by mid year, we got a.
Better visibility into what we can do but I think we're handling things pretty pretty strongly and add we're certainly seeing a lot of work still flowing through.
Okay, great. Thank you.
Your next question comes from the line of Donald Hooker with.
Keybanc.
Great. So.
I just wanted to jump back on the data solutions segment. Thank you I know you guys have put a lot of money into that.
Just stepping back make sure how.
How do you now add up a few years with Symphony health the acquisition here in a couple of other acquisitions. What do you think your your market share is big.
Big picture there in terms of what you are trying to penetrate with that business to help us sort of think about the upside potential. So is there like a tam that you're focused on that you can share with us in a bit of you there.
We still feel that we have a very small market share in lots of opportunity to grow which is I think gives us that opportunity to grow beyond the industry standards and.
Tom will be moving in through rebuilding and in fact book just provided a couple of more senior people to the team and the last quarter that it just continue to strengthening what we're doing.
Obviously.
Getting more face to face time with clients, whether it be more beneficial.
You know the zoom conferencing can only work for so long.
And especially when you're.
Declining so I'm not sure what's happening next year and they don't know what data they need et cetera.
It is quite difficult to go through that but I do see there's an awful lot of opportunity there and you know we still using the data and other parts of our business, which is very important in the way, we conduct and run the business using.
Evidenced based support for all of our decision, making so lots of things that we are we initially as strategically acquired somebody for spelling intact, and we continue to monitor that carefully while looking to build the.
That business more strongly in the future.
Thank you for that and then maybe one other question.
Was declared luggage are presenting information here, but maybe a little bit deeper into the weeds in prior quarters, you had talked about some opportunities in the government space and I think some of them might my sense was that was.
Fairly material and you had sort of impact in impacted your gross margin your margins actually put some money into that area I understand that stuff was pause.
With the COVID-19, operating potentially winding down over the next 12 months hopefully.
Are we going to see that come back and can you maybe scope that for us.
Well I mean, it's going to be difficult for us to scope. The snowbelt, yes. It did actually come back in with that actually do a small press release, just to I know in stock and the investment paid off and we did that again first award and.
Difficult to determine exactly how much is going to be because it sounds as a bucket of dollars.
But the most important thing that will really flagging is that our investment paid off and that we are now moving forward and we have no experience.
Achieves approvals labels that we wanted and we continue to look to support the government and our endeavors to do the clinical research. So we feel nicely positioned note to move that one forward.
Okay. Thank you.
Your next question comes from Patrick Donnelly with Citi.
Thanks. This is jesse on for Patrick.
You mentioned pending decisions were still high in the quarter. So just wondering if you could give us some more color on how our fees for decision, making is has trended for noncovered work and if some of those decisions were.
That were delayed in the first half of 2020 were partially responsible for the strong focus in Threeq you and then as it relates to Fourq. Two have you seen any additional delays so far in the first few weeks of the quarter or.
Is it possible for for some of those delayed decisions to Roland for Q and maybe what you see.
Other sequential uptick in Fourq you bookings.
I mean, I think what you were seeing and I think we commented about this on the last call and part of the reason that we did as I think they are just rolling through as they normally would roll through I think we are seeing that we're there's still.
A little bit of a delay on the client side on making a decision.
But the levels that that are that are coming out of the quarter with respect to those pending decisions are in line with where they were in Q2.
Coming out of that quarter. So I don't I don't think we anticipate any big bolus or a cause of the numbers that you've seen I think it's been normal business.
Again, we commented on that last quarter, because we wanted to show the strength in our Q2 bookings that it wasn't just all everything dropping through from Q1.
So we're seeing the normal amount of activity RFP volume has been high.
And it's just taken a little bit longer for our clients to make decisions on.
On moving forward on some things.
Okay got it and then just one on cash flow it looks like free cash flow was really strong in the quarter. So just wondering if you saw any.
Pull forward dynamics as it relates to receivables or if you could just kind of speak to any any work you are doing around working capital.
And then just how we should expect that to trend into Fourq and 2021.
Yes, no I think our DSO.
Did beat our internal target by it was only by two days.
So there was nothing specific that came through we had a big bolus or payments I think when you. When you look at the increase versus the prior year I think 2019, I believe our Q3 Dsos roughly 27 days and then we did have a couple of client issues there with new systems date implemented some.
From my expectation going forward is that we would be somewhere in that kind of 15 to 20 day range by the end of the year remember Q4 is typically a very high cash collection quarter as.
Clients tennis.
Spend their budget and make sure they're making payments so.
So I don't I don't anticipate anything out of the ordinary and I would expect that our dsos should be pretty good at the end of the year.
Okay, great. Thanks.
Your next question comes from Jack Meehan with.
Research.
Thank you good morning.
Alan you you've highlighted pays one a couple of times. So far I was wondering if you could help quantify for us how much of a drag was that in the quarter and just any commentary on how that recovered versus twoq you.
And then if you look at your sites around the world just some color around where there may or may not be some exposure for shutdowns.
Yes, Jack we don't.
Mds is part of the clinical research segments. So we havent broken that out separately, but I will tell you.
Year over year from a revenue perspective that business was down.
Was obviously is down as much as it was in Q2, thus why EPS.
Was was significantly higher.
But it was down year over year and as Colin indicated that's really due to the fact that we're having to social distance within.
The clinic, so our capacity is getting slightly constrained there.
But we don't break that out separately. Unfortunately.
Okay.
And just a follow up you know what the cash flow in the quarter and it seems like the business back on its feet better after the pandemic now in leverage is below two times again.
What's the appetite for doing more deals do you think you know is there any caution in the current environment from doing something if you wanted to do it.
Actually we are always looking for opportunities to take advantage of any anything.
Anything that can help us grow our business.
One of the areas I'd like to move into is a real world evidence late phase I type of work I have it.
Finding an appropriate asset is always a difficult par and but that would certainly be very helpful. For us, particularly we have all of the data resources that we could utilize and help.
Grow that business even faster.
As an area that we continue to look for.
Other than not we do get am.
Our visibility into a lot of things that but.
This has been it's been tough enough. This year, just trying to keep focused on what we're doing and and making sure. We keep on top of what flow and keeping supporting our clients. So yes, you're right maybe next year when the GAAP catch your breath, we can start to look at the you know our.
Strategy about is there any other opportunities out there moving.
Moving forward with particularly and this changing environment.
Thank you Don.
Your next question comes from Dan Brennan.
Great. Thanks, Thanks for taking the questions and maybe just wondering if you. If you look at the third quarter in totality from where you were originally set your guidance you.
You mentioned you did come in above that how would you characterize the areas that you kind of get better than what you expected and kind of why why did they come in ahead of the original plan.
We as I think has as I said in my prepared notes, we did pretty well across the business in terms of performance I think you know.
When we were heading into.
Q3, when we issued our guidance you know there was still some uncertainty on site accessibility and ability to enroll patients and.
And stuff like that and you know as Colin indicated you know through the use of our mobile health platform and some other things that we're doing internally we were we've been able to.
At work with our clients to move the studies forward as a result, it obviously generated more revenue.
Most of the improvement I think you'll see through the analysis was revenue generated so I think it was you know some opening up in the world on on.
From the impact of the COVID-19 pandemic helped us in the third quarter and you know as we I think we said in our call. We were we were cautious about our Q3 guidance because there was a lot of uncertainty there.
And we'd met Ed mentioned as well the our strategic solutions Division has been stronger this year because.
The last couple of years has been quite tough as base.
Moved a lot of the labor force to sell lower cost countries, and we saw that being slightly the vast again and this coming year. So we saw that some of the day the vacancies up and.
They have been hiring a lot and placing them within a strategic solutions division. So that's been a help as well.
Great. Thank you and then.
I mean, if you call your Crystal ball like Mike I think you mentioned, how you, possibly think about things evolving in 2021, but like what would you view appears that kind of pushed out the timing for which they expect anything to get back to normal and Miss a very fluid situation, but what will be your best planning today. If you thought like is it Q2 Q3 Q4.
Is it possible to say when you think as you guys look ahead. The 21. When you think you get back to normal level of site access and patient enrollment.
When we are doing our planning we are going to be obviously looking at the ramp up and we've not even really started that process will be happening in the next day number of weeks.
And so.
So I think we'll try to give.
Pretty good understanding of how we saw things even.
With that we'd get a Q3 number were knocked out data we get will endear Q3 in Q4 number. So we I think we've been pretty good that sort of gives you an indication of what we felt was going on.
At this point, we're just not ready yet for 2000, and 2021, but looking and obviously I feel we are well positioned we have a solid backlog with a well diversified portfolio and therapeutic areas are strong and book great client mix. So we've got our own.
All of this a major things I'm looking for to be intact.
And then we're just going to put for the flow of how the what's going to happen I mean, I think it will be a there's no reason why it can be a lot stronger than than 2020, so but it's hard to say because we're we're going into a period, where we just don't know whats going to happen with us.
Cold weather on what is going to do with Revitas and am I thinking about just I want to just proceed with our caution there.
Great. Thank you Tom Thanks, Mike.
Your next question comes from Sandy Draper.
Okay.
Thanks very much.
Maybe a question on.
I mean, there has been a lot of folks on either side access patient recruitment.
Colin you mentioned.
Percentage of trials that are being impacted well when I think about it is.
Site access versus patient recruitment enrollment is one of those notably more important to the recovery.
Then the other.
Yes, and enrollment is very very important.
And of course that means that patients have got to get to see the doctors you know so that's.
So it's back to the circular argument sake access to the patients to get in and get seen and get and recruit you don't I study. So that we have got to regardless of an John the whole flow and and allow the patients to be seen by the metrics that then placing them within a study.
We need access to obviously collected data in a timely fashion to make sure that we're observing everything under the protocol and capturing all the data in a timely manner, making sure that.
All of the adverse events serious adverse events reported in a timely basis et cetera. So as that does a lot of what that gets done and that we've got to make sure. They get gets maintained and we don't want itself get behind in any of the data collection Pcs and so we do have data assays in getting access.
Which is why the minute we don't allow you to get on to say, we've even doubled up in our resources to ensure that we can take advantage of being open to us and allow us to do.
To help the same space of getting it done as quickly and expeditiously as we can.
Great. That's helpful. And then maybe a related follow up probably to Mike. When you think about the you guys have done a pretty aggressive job of going.
Remote monitoring using your mobile technologies, assuming at some point, we get back to normal, but theres, probably more use of that technology, Maurice monitoring et cetera.
Yes can you walk me through sort of what you see the longer to longer term financial and tax. It is there any notable change to the revenue that maybe the revenue is lower because there's fewer fewer passengers or other things, but there is a better margin potential just what are the longer term dynamics if you.
We don't go back to the old way, but we start to see more remote monitoring virtual trials. Thanks.
Sandisk strategically we've always thought that when we can change the paradigm and reduce the timeframe to get a study done on reduced the cost impact that.
There will be more potential for more studies to get done because they otherwise change and more companies will be developed and that is.
Moving on to some more precision based medicine, our personalized medicine wherever you want to call it.
And we see that trending in the future. So we never see that there will be added production and the flow of new work.
We do think that the changes that were seeing now will accelerate and you know the studies will be more willing to embrace our using technologies to help expedite studies and get them done in a manner that will cost effective as well. So we do see this as a pandemic.
Hi, guys.
Is allowing us to change that.
Regarding our margin profile I think it's too early to say because we're actually stretched it in a year, where within a pandemic and.
I think we need a little bit more time on that because a lot of the efforts, we're making was.
On the back foot trying to just support and help our clients. So we we didn't do it with a plan to this is what we're going to do to make margin. We did it to how do we help our clients get through that clinical trials.
Great that's really helpful color. Thanks.
Your next question comes from John Kreger with William Blair.
Hi, Thanks, very much for the covered work you guys have one of late can you remind us what's the sort of duration, you're seeing on that business versus a typical Noncovered award.
Yeah, John obviously, I don't have that number off the top of my head, but obviously, we are seeing a slightly shorter duration I can certainly get that information and get it back to you.
But I don't want I don't have the exact duration of that profile right in front of me.
Okay got it thanks.
And then I realize we're early in the planning for 21, but any kind of notable partnership renewals kind of coming up in the next 12 months that we should be thinking about.
I don't think you know John.
John as you said its very early.
We've just kind of we've kicked off our process, we're sitting down with our BD teams.
If there are significant renewals will certainly be involved in that process, but at this point I don't know that I can comment on that great.
Great Great and then Mike maybe one more I think in the in the EBITDA reconciliation. It looks like you guys had a pretty big adjustment of something on the order of 45 million I think that was a benefit although I realize it wasn't in the adjusted TNL, but assuming I saw that correctly can you just maybe elaborate on what that was sure. Yes that was actually was a benefit.
And it was actually the release of our contingent liability related to our the CIA or the care innovations acquisition if.
If you recall we had a.
A large upfront payment and an earn out attached to it obviously given the change in market conditions. This was a 12 month earn out in the market conditions, obviously impacted that and as a result, we had to release that earn out liability.
Got it thank you.
Your next question comes from Aaron.
Please.
Thanks.
Colgate related work how much.
Related work first therapeutic work and you think that there will be some sort of a reprioritization of R&D efforts heading into next year when that potentially there is a vaccine when we see that sorted.
Reprioritization R&D or cancellations associated with some of those.
Therapeutic efforts are or do you view that is less likely.
They as they its almost a point you might even split between the vaccine in the therapeutics.
You know what just expanding some of the this the studies that were doing in the vaccine work.
And adding new capabilities new capacity.
We that is a plan in place so that obviously has been executed pretty well and we're still working through obviously in some therapeutics, which is great, but it's not been a huge amount of work I mean, it was 5% of our our new.
I thought ization so.
So we're seeing obviously a strong pipeline across the board. So I don't think there's anything that I see is unusual I wouldn't normally have assaf view as in the ordinary course of business.
Okay, great. Thank you.
Again, ladies and gentlemen, if we have a question at this time. Please press the star and the number one key on your test.
Hello.
Your next question comes from the line.
Bank of America.
Hi, Thank you for the question if I heard correctly in the prepared remarks, you mentioned that there are some uncertainty in the data solutions. Those are some of the spend there is discretionary.
My understanding of this business, which strictly mistaken was that this was a subscription based business.
Having somewhat of a recurring in nature. So can you. Please help me understand this better.
Perhaps if you could share the percentage of a business that is driven by discretionary spend versus non discretionary spend and how much of this business could be recurring in nature.
Yes, sure one I don't have those percentages in front me for the break out but as we've commented in previous quarters that we've said that you know the majority of.
The business is subscription base, that's why the pandemic would have less of an impact on that business as compared to the clinical side of our business. So.
It was.
Not a significant amount that was had dropped out of the third quarter compared to where we had thought it would be but we did have some challenges there because of some of the discretionary spend as Colin referenced come through it didnt happen.
So I mean, the commentary around that was really just to.
Try to help guide.
You guys in the street to where we think data solutions is going to be from a from a revenue perspective, because you know typical to what we've seen.
At least year to date, you know that business has grown it is up.
You know what we've commented in the past on where our expectations were and we wanted to just kind.
Kind of give a broad based comment so that people understand that we're not expecting to see a lot of growth there because of the impact that some of this discretionary spends having.
Quarter revenue that we were expecting.
Okay. Thank you and.
Seems like data acquisition costs continue to grind higher and higher I suppose but some of this is related to more competition for the state assets for sure how.
How long should we expect this to happen or or is this the new norm and on while Youre at it can you give us an update on your data assets, perhaps the number of data suppliers data feeds and the total number of patient lives that are covered by your databases.
Well the patient lives recover over.
Over 300 million and the U.S. and so we actually have.
Covering other parts of the world is a little bit more sparse.
We do have some good data sources, but we are not of this anywhere near to what the scale we have in the U.S.
And.
You know, we don't disclose our data Costello as an ongoing.
Hi, discussions we have with our clients are normally multiyear agreements.
As you can imagine everybody thinks of data is more valuable than that really can be out is it.
It's not until we aggregator and we can actually you know once went once were processed at de identified linked altogether as becomes when we transformed from a broad data into information that becomes meaningful.
But that ROI data as a starting point and.
I think we are we are trying to trying to sort of change our paradigm by.
Yes.
Working more with our data providers and say what can we help them use of data west because we've all got analytic tools and our expertise and there may be other ways that we can actually get a win win rate.
Relationship, where we can actually help them utilize that data and more appropriate minus within their company. So we have been so let me start trying to stop Tom nine his head and try to get more understanding.
Understanding relationships with our with our partners.
Thank you.
I'm showing no further questions at this time I would now like to teleconference back to college.
Well, thank you everyone for participating in our call today if.
If you have any additional questions. Please feel free to contact US. We hope you have a great rest of the day and thank you.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.
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