Can you guys just give me a heads-up when we're ready to go? We're good? Okay. Welcome, everyone. Thank you so much for joining us today at our 2024 ICON Investor Day. Pleased to have you all with us here in person and, of course, those of you joining on the webcast as well. I think we've done one better than the New York City-Dublin Portal that's here in New York, because we of course have our Dublin-based team here in person. Those of you can't see them on the webcast, but they are here in the flesh with us today. I'm just going to go through a couple of the logistics for the agenda today. We're going to have presentations by many of our leadership team here today.
We are going to have a break just around 11:30 for 15 minutes. So those of you that are joining on the webcast, you are going to hear a music hold for the duration of those 15 minutes before we come back on live. We'll then finish off with more presentations and then have a Q&A session with the entirety of the ICON leadership team, which they'll join us here up on stage, and then we'll take live questions from the audience at that time only in the presentation. The webcast will then end at that time, and then we'll invite those of you that are here in the audience to join us for lunch and breakout sessions immediately following that Q&A session at around 1 P.M.
Of course, have to make the obligatory statements that we will be making forward-looking statements here today. Of course, please refer to our full disclosure around our forward-looking statements and of course, the basis for our financial information, and those are contained in the presentation deck that will be made available on our investor section of our website following the presentation today. With that, I'll hand it over to Steve Cutler, our CEO, to get us started.
Thank you, Kate, and a warm welcome to all of you. Great to be here in New York. As an Irish company, we have a great affiliation with this city, and I know a number of you have traveled quite some distance and had some challenges to getting here. So we do appreciate the effort that you've made to be here today, to listen to what we have to say over the course of the day. We are a healthcare intelligence organization that has a strong passion for our vision and our mission. We want to be here to help patients and move therapies, devices, drugs to market in an accelerated fashion.
And as we evolve as an organization, and we'll talk about that a lot today, we believe that we have at the very, very heart of our mission, our vision of accelerating drugs and devices and getting them to market, effectively. We've made, I believe, very significant progress over the last, particularly the last 3 years, but over the last 33 years. We're an organization that was established in Dublin, 1990, so 34 years ago now. And we believe that we've made a significant contribution to clinical development, around the world, and we believe we're well-positioned now to continue that, as we go forward. The management team is here, in the front row, and I'm gonna spend a moment or two to introduce them.
So, they are a team that I think has been done an exceptional job, certainly over the last three years and really over, for many of them, over the longer period of time. Nine of us on this team have been with Icon for more than 10 years, so we have a significant tenure there with our organization. And we have something like 200 years of clinical development. That makes me sound very old. It makes us all sound a little old. But we have something like 200 years of clinical development experience within this team. So I'm very pleased and very proud to be able to introduce you. First of all, Barry Balfe, who will talk about large pharma. Barry's here at the start. He has been with Icon a significant number.
He's over 20 years now, and we welcome him. Dermot Cunningham is our Chief Administrative Officer. Dermot is the heart and soul behind our Global Business Services group, and the success that we've had around that group is certainly, I think, one of our key differential advantages in how we've minimized or lowered our SG&A costs. So, credit to Dermot on that one. And, of course, all of the Global Business Services team. Greg Licholai is here. Greg has come to us through the union of PRA. He is our Chief Medical and Innovation Officer, and Greg and Tom work very closely together in our innovation space, and they'll be talking to you this afternoon about what we're doing around AI, machine learning, robotics, et cetera, et cetera.
Ute Berger has also come to us through our union with PRA. Ute is a medical oncologist, brings a very strong therapeutic focus and oncology focus to our business and is responsible for the preclinical services, our lab, our late stage, and our early, early phase business. She is new to our team since our last Investor Day a couple of years ago. Kate Haven, I think you all know, so I won't introduce her any. Kate, I think you, I think you know Kate well. Eimear Lyons, as well. Eimear is here in support of Brendan. Eimear is part, an important part of our finance team. Eimea r was largely responsible for the refinance we've done as we went back to investment-grade bonds, and delighted to have Eimear as part of the, of the team today.
We also have Tom O'Leary, our Chief Information Officer. Tom is again, he will talk to you this afternoon about AI and machine learning and robotics and our innovation and the, and that moving us towards that healthcare intelligence organization as well. Chris Smyth is here as well. Chris is one of our newbies. He's been here only a year or so. He came to us from one of our larger competitors and is responsible for our biotech group, and he will talk to you later on this morning about our biotech rebranding and rebooting. Brendan Brennan, I think you know. I don't think he needs too much introduction. He will talk to you later on today. As I look down there, Simon Holmes.
Simon is an Englishman who played rugby for Scotland and lives in Ireland. So he doesn't know where the hell he is, basically. But he is responsible for our M&A, and he will also be hosting a session, a breakout session, this afternoon as well. And then I have Joe Cronin, Chief Human Resources Officer. Joe has a session this afternoon talking about our culture. It's a very important aspect of what we do here at ICON, and Joe's been significantly responsible, or at least overseeing, what we believe is an industry-leading engagement and retention within our business, and he'll be able to give you some more details on that, as we go forward.
Rose Kidd, at the front here, is a long-term ICON employee and has risen through the ranks over the last 30 years. She's been with us for 30 years, so she started when she was 12. And delighted to have her as part of our operational delivery team. And Rose will be talking to you later about how we do ICON operational delivery and supporting both the biotech and the large pharma segments. So I think that's everyone. Have I missed anybody? I've got everyone. Great. So a strong management team. Arguably, I would say the best management team in the industry, but certainly unarguably the best-looking management team in the industry. So what am I looking for you to get out of today?
We believe we have a very bright future. The clinical development landscape has many more tailwinds than it does headwinds. Now, that's not to say that there are some uncertainties, and you'll all be aware and knowledgeable enough about our industry and our company to know that things can be volatile, whether it be biotech funding or interest rates or fiscal challenges or geopolitical. But overall, we believe the scientific, technological opportunities, medical opportunities that we have, combining with the technology that's now available to apply to clinical trials, gives us a very optimistic and constructive view of our market. We'll talk specifically about that in the next few slides, and we'll give you a little bit of a flavor of what we see we can do within that constructive market.
I also believe, and we also believe, that ICON is in a very strong position to benefit from those tailwinds. We're now three years into our union with PRA, and I'll talk about that in a moment. But we've positioned the company, I think, to grow at above-market rates, and we'll talk about that a bit more. We are very happy with our position at the moment, but we are not at all complacent about where we sit at the moment. We do believe we need to keep evolving. Our aspirational move towards that healthcare intelligence is very real for us.
We want to employ the technology and apply the technology and the opportunity that we have through AI and such like to improve the way that we run clinical trials, to improve the efficiency, to improve the speed, to improve the quality of what we do in the clinical trial space, and we believe we're very well positioned to do that. So we're not standing still is the message. We believe we've got ourselves into a good place, and that's what this slide is really about. Because as you all know, about 3 years ago, almost to the day, certainly within the last few weeks, we came together with PRA, and that union doubled our size and moved us from being 2 players, 2 very competent organizations within a larger clinical development, sort of number of competitors.
I think one was, one of us was five, one of us was six, to being one global leader. We continue—we, we are now, we believe we are that global leader, and we believe we can take that position and benefit from that position in the marketplace to continue our growth. You know, we had some skeptics when that union was made, and there were some who moved away from us. Many of you, most of you in this room and on the webcast, stayed with us, and we very much appreciate your support in terms of how you stuck with us and how you worked through what was an integration that I think overall has gone extremely well. It's not as though... we're not completely through it, but we're really largely through that integration now.
And so this is an important and somewhat pivotal moment, I think, for ICON, to benefit from the momentum we have, as I said, in the technology and the science and the medicine, to move our organization forward in a way that moves above market. So we, as I say, we do appreciate those of you who stuck with us, those of you who came to us, and those of you who will come to us more in the future. Because it's been a very great ride, and it's been an interesting ride, and it's been one that I think we're gonna continue to move on with over the next few years.
I'm proud to say that we delivered, we believe we delivered on all of the promises that we put forward to you when we made the union with PRA. Whether it be our cost synergies, whether it be revenue synergies, whether it be our ability to build our customer partnerships, and we'll talk about that a bit more as we go through the presentation today, how we've done that, what we've done that, what aspirations we see on the partnership side of things. In particular, we're very pleased with the way we were able to pay down the debt. I know there was some skepticism about the leverage we moved ourselves to as we took on that large union.
We were able to very effectively and very, very focused in a very focused manner, and I give credit to our finance department, but all of our operations here, all of our management team and all of our 41,000 employees, who really came together and focused very hard on moving that debt down. We're now investment grade. As I said, Eimear can talk to you more about that in the breakout sessions. We've moved ourselves back to investment grade recently, or just this morning, we released a press release, which has enabled us to move up our guidance this year on our EPS by $0.10- $0.15. So we've seen a tangible benefit on that going forward, and that's a, I think, a very important aspect of what we've been able to do.
So we've, we've delivered on the promises, and I think that's the, that's the point I want to make on this slide. We've delivered very clearly on what we said we're gonna do, and I'd like to think that you will think that in the future, as we do other sort of acquisitions and other sort of initiatives, that you'll see that we can deliver on what we promise. Having said that, and moved us to, as I say, to almost the starting line again of the marathon that I, that I, as I talked to the team about us being in, we do recognize that there are, you know, challenges ahead of us, and there are opportunities, and we have to continue to evolve our organization and address the dynamics of the market that happen to us.
Many of our customers are facing patent cliffs. Something like $100 billion over the next few years in patent cliffs is something that's gonna cause our customers some challenge. We believe there's opportunity there as much as there is challenge for us. The IRA something that means something very different to an Irish company than it does perhaps to an American one. But it... But in terms of the Inflation Reduction Act, it's something that we recognize our customers are thinking about, but we also think there's opportunity for us in the IRA and in the challenges that the IRA brings to our pharma sponsors. And so there are a number of areas there that we believe we are well-positioned, and our industry is well-positioned to be able to target.
I've alluded to the opportunities around the medical and scientific breakthroughs. I know a lot of complex drugs, a lot of complex, you know, trials being prosecuted these days. That has some challenges to us, but CAR T, cell and gene therapy, drug conjugates are all areas that our customers are developing actively, and we believe will bring significant opportunity to us in our industry. And then on the other side of the spectrum, those of you who have been in the industry as long as I have will remember the days of the large-scale clinical trials, the big osteoporosis trial, the big cardiovascular trial. We see opportunity around the obesity and the GLP-1s to go back to some of those large-scale drugs.
There's going to be a lot of money made in that space, and there's gonna be a lot of reinvestment in that space. And so that, I believe, offers us a significant opportunity to move back perhaps towards more fast-burning trials, more large-scale trials. And that's gonna be something we're very excited to be a part of. To spend a moment or two on what we think the market is doing, and where it's going. As you can see, we believe overall about a 5%-6% growth in our market. And that's made up of something like 4% of overall R&D spend growth.
If we break that down a little bit, we'd see something like 3% in the large pharma space and more like high single digits in the biotech space. I think we're all in this room encouraged by what we've seen in the first quarter in terms of biotech spending. Some increases there, some stability in that market. We're certainly seeing that as we come through and starting the year. We haven't quite seen the full picture flow through yet, and we don't anticipate that will happen through until towards the second half of this year. But we're certainly encouraged by the funding figures that we've seen and the return in terms of large pharma making acquisitions. Even the IPO market seems to be moving in the right direction.
So optimistic about that, constructive about that, but still a little cautious in terms of not quite ready to declare victory in that space just yet. The other part of that, that market growth is around about 100-200 basis points each year of market penetration. We still believe that will happen. We've seen that happen really over the last 20 years or so. More and more outsourcing happening, and we believe that's something that is gonna continue and will continue for at least another decade or so. Well, I certainly believe we're at, you know, 50%, 56%, 50%-odd, 53%, I think, is the market number now. I think we can get that closer to 70% before it'll inevitably tail off, but I think we're some way away from doing that.
And so as I look at that, that sort of market development, we, we believe we can grow faster than that, and what I'll try to give you now in the next few minutes is how we believe we're gonna be able to do that. Because we're focused, and Chris and Barry will talk about large pharma and biotech in the subsequent presentations. Barry, about large pharma, he'll give you some flavor for what we're doing in that space, what's generating our growth in that space, and Chris on our biotech reboot will spend a bit of time on that. They are fundamentally different parts of the market.
Even though we're developing drugs to the same regulations, the same standards, the same quality, ultimately, large pharma is a group that is focused more on strategic partnerships, and we'll give you a bit more information on that, around process and around efficiency and around cost and making sure that is the focus of their attention. Again, Barry will give you more on that. Biotech, on the other hand, worry less about overall sort of process and partnership and more about the drug they have or the one or two drugs that they have, the next timeline, making sure we meet that timeline, making sure we get them to market or to their next inflection point, value inflection point, as quickly and as effectively as possible. They're less worried about price and cost.
It's not that they're not worried about it, but they are more focused on execution of partner of immediate timelines. So that means we have to reflect those differences in the people that we have working on them. And again, Chris and Barry will give you more flavor of the nuances of that as we go forward. But we have a number of questions to answer. We have a number of opportunities within this space to be able to prosecute these programs in a really effective manner. So what are those, you know, the opportunities here? We have, you know, great opportunities for differentiation. We're focused on delivery of solutions to the critical issues.
That's one of the things that I'd like to think differentiates ICON as well. We understand what the problems our customers are, what they're trying to solve, how they're trying to solve, and we apply our resources and our capital and our effort onto those problems. So we'll talk about our Accellacare sites, we'll talk about how we select sites. Some of the AI and machine learning that we've already been public about with you gives us an opportunity to actually dedicate and focus and improve our performance in those key areas. For a clinical trial and for a company that's developing a drug, getting to market as effectively, efficiently, and as fast as possible is ultimately the most important thing that we can do for them.
So getting sites up and running and started, getting patients into those trials on time or even ahead of time, is the most important thing that we can do, and we focus our attention absolutely robustly and rigidly on those areas. So what are the key sort of differentiating advantages that ICON has as we prosecute those areas of the clinical trial, as we bring customers, drugs, and devices to market as effectively and efficiently as we can? You know, you'll be familiar with all of these things. The one I wanted, I guess, to point out a little bit and to expand on perhaps a little bit more than normal would be our scale advantages. We talk a lot about geographical scale, therapeutic scale, functional scale.
That's a race that many of our competitors, you know, we've run with them, and we have advantage, certainly over a number of smaller companies. What I like to think is our focus in the clinical space gives us an opportunity to scale in the technology areas and to scale up that technology through strong investment in that clinical space that allows us to bring forward these solutions that address the customers' problems that I've talked about. So that singular focus in the clinical space, we're not into the preclinical, we're not into other areas of the business. We focus in phase I - phase IV, and that's very purposeful, and we spend our capital, and we spend our resource, and we focus our scale advantages in that space.
So I bring to you that technology, technology scale and that ability to finance that technology and to try those solutions and to get the right solution and to put it in place on a scaled basis as a way to actually really improve what we do. That's what we're looking to be, and that's what we're looking to do as an organization. Again, focused on our customers' issues and our customers' problems. So in order to prosecute those trials and to make sure that we're structured in the right way to do that sort of work, we have structured the organization in this way.
You'll see on the, on your left, you'll see this, the way we've brought our large pharma together, and this is our full-service solution group, ICON Pharma Solutions, and our functional group, ICON Strategic Solutions, ISS, as we call it. And that is all under Barry, and Barry will talk later, in a moment, about some of the drivers and some of the, some of the improvements and some of the, the strategic imperatives that we're pushing forward in that large pharma space, the top 60 by R&D spend. He can talk to you more about that.
But it's very, it's very, notable that we brought that together because ultimately, as you, most of you will know, functional FSP is a, is an area that is developing, and we're seeing opportunity in that space in the industry, but it's typically done by those larger pharma companies. Very few biotechs get into functional services and provision or FSP-type work. And so we've kept our biotech separate, and Chris will talk about, again, the nuances of biotech. The 8,000 people that we have focused in the biotech space is a very significant and very and a differentiator, again, to what I think a number of our customers will talk about.
They'll talk about a biotech group, but they don't necessarily have those people absolutely focused and dedicated, particularly in the project management and the clinical space, and that's where we think we have some significant advantages. Ute will talk a bit more about our development and commercialization solutions. That's our labs, our early phase, our late phase group, and our consulting group. And she will talk to you as well about some of the therapeutic areas we're developing around that space. Underpinning all this, and I alluded to our excellent and our differentiating global business services team, not just in our support services, IT, HR, and Joe and Tom and Brendan are all very much a part of that, as you all know.
But we've also got a functional center of excellence that supports both our large pharma and both our biotech group in areas such as data management, statistics, medical writing, et cetera. And Rose will give you some more information on that later on in the morning so that you can understand where we're getting dedicated focus, but we're also making sure that we get the efficiencies of particularly functional areas where there isn't a lot of difference between how we do data management on a biotech study or how we do data management on a large pharma study. So that's a subtle but important distinction that we'll make and that Rose will help you with talking about as we go forward. So, yeah, we're also an organization that's founded on a very strong culture. I mentioned our Irish culture.
We are a very proudly Irish organization, and we are founded on those strong values of working hard, playing hard, enjoying ourselves, but doing the right thing for customers in a way that brings their, as I say, drugs and devices, and follows our vision and our mission, absolutely appropriately. No question. I know it's said at all of these meetings, but our greatest asset is our people. Our management team down here are, as I said, I think one of the best in the industry. We have over 41,000 people now across the organization. And we're focused on making sure that they develop, and they have a career path that is something that they're looking forward to, and that they continue to contribute to our organization. Our retention rate is, I believe, industry-leading now.
We're in the high eighties. It's probably as good as it's ever been in the history of our company. So I'm very proud of that, and it's something that we believe is a very important part, and I give credit to Joe and all of the management team in helping to move us forward in that respect. We're also very serious about the ESG aspect of our business. Clearly, we're not a company or a business that manufactures or has large-scale manufacturing or anything like that, so we focus on the S, on the social side of things. We're very keen to make sure we have gender equality, that we have equal opportunities for women and for other minority groups in our organization.
We are part of the EcoVadis, sort of metrics team or the score that comes out every year. We recently improved our EcoVadis score from 66 to 70. We are a gold standard on that front. Again, Dermot can provide more information to you on that as if you'd like, but we see that being an important component of what we do. Certainly, our employees are very engaged on what we do on the ESG front. So we believe, not just for our employees, but for our customers as well, that we need to be at the forefront on that space, and we certainly put some effort and investment into doing that. So, we're just to give you all, again, a little bit more on the scale and the...
And where we are, we're across the organization. We are an organization that's able to ultimately position our people in the right places to do the work that's required, and this is an ongoing and evolving aspect of our business, and we continue to evolve our organization in that front. It's important that we continually look at our organization, that we compare it with, in terms of the locations, where do people need to be? Clearly, COVID and the technology showed us that we can work from anywhere in many cases. Now... And that gives us opportunity.
We want to take advantage of that opportunity, and we will continue to take advantage of that opportunity, and that's one of the ways in which we'll continue to improve our margins over the longer term, and I'll give you a bit more on that in a moment. But the optimal location of our workforce continues to be a key focus for the management team and all of our organization, and it's something we've made some very significant progress on over the last few years, but we have more to do, and we have more opportunity, yeah, in that space. In terms of our Accellacare site networks, and Rose will spend some time on this. We understand you all believe that we have a site network, and we do, but it's much more than a site network.
What we talk about within the team here is an ecosystem, and we recently brought our teams together in terms of our site identification, our site selection, our patient recruitment services, our Accellacare site services, our home health, into one group under Rose's direction, to facilitate and support both Chris and Barry in the large pharma and the biotech space. And it's not just a site network. It's an ecosystem that allows us to select the best sites or identify the best sites, select them quickly, start them up fast, and there's a lot of focus on that at the moment. Then recruit those patients. So we're trying to look at this in a more integrated and holistic approach.
Site start-up and patient recruitment are the two largest challenges we have as an industry, and we're looking actively to solve them through our organization, and as I said, Rose will give you a little bit more information on that. The initial sort of metrics on our Accellacare are very positive. You can see up there. We get sites started up faster. We recruit about 60% faster. We have, you know, a better quality. We have more patients come through. What we're looking to do is expand that influence within our network. They're around about just under 10% of our sites at the moment. I'd like that to be 30%.
We have opportunity, certainly over the next 3-5 years, to really expand that, and that's what we'll be going, and that's what we'll be talking about. M&A, and Simon can give more information about that. As we expand that site network, as we expand that ecosystem, we get better performance, and it materially will impact our business. So we have an enterprise-wide approach that, that, that's really solutions-oriented for us. And then, again, this afternoon, you'll hear more about our AI approach. AI, of course, is the word on everybody's lips at the moment. Everyone wants to talk about AI. What we're trying to do is be very pragmatic and practical and focused in the AI space. We are gonna invest money, and we are, and we are doing that.
We've got a number of hours already spent and already taken out of our organization based on our robotics, and Tom will talk a bit more about that. We're 2 million hours last year. We're getting to 3.5 this year. We believe on track for that, and we have aspiration to move that towards 8 million hours over the next three or four years. That's taking cost out, again, as a way of continuing to improve our profitability.
We also have a number of systems that you know about, the One Search, the Cassandra, the ICONIK, that are practically helping our customers to prosecute their trials, whether it be identifying the right sites, whether it be finding which studies they should be doing in the later phases, and which endpoints they should be including in phase II, phase III, so they don't have to do some of these late-phase studies, or whether it's identifying key opinion leaders. There's a number of areas that we're practically investing in to help our customers move their projects and move their drugs along the development pipeline. But this is a very big area for us. It's an important area for us, and again, we'll spend a bit of time this afternoon on what specifically we're doing with that, with Tom and with Greg...
Strategic partnerships are a big, and it's one of the areas that I'm very proud of, that we've made significant progress with over the last three years, particularly, since our union, with PRA. We are now part of the conversation. We, our, our customer—not to be arrogant about it, but they can't afford not to have us as part of the conversation because we offer the biggest FSP, functional group, we offer very significant full service, facilities, and of course, we offer a lab, early phase, late phase, and, and our Accellacare site ecosystem. So there's a number of things there that our customers are looking for and looking for us to help. And so, and, and how do we win these?
We've gone from something like 13, I think when we first came together, 13 of the top 20, to 16 of the top 20. So we've added 3 in the last 3 years. We also have added a number outside of the top 20. So increasingly, we're talking about not just the top 20, but the top 60, and that's Barry's focus, very much in the top 50 to 60 companies by R&D spend, and their willingness to engage us in those strategic partnerships, I think, gives us huge optimism for the future. And how do we do that? It's a combination of things. There's no one thing there.
But ultimately, you have to have the things I talked about, the scale, the technological advancements, the partnership orientation, the relationships, and we have all of those things in spades, and we're making very significant, I think, progress in that space. It all provides us with a great, a great deal of confidence, I suppose, in our growth prospects, in the long-term growth prospects that we have as an organization. These are six strategic initiatives, and again, the guys will be addressing these specifically, so I won't go through these in any great detail at the moment. But just to briefly talk about it, large pharma, Barry will talk about. Our refocus in biotech, Chris will talk about specifically. The integration of our site and patient solution, that's the Accellacare site ecosystem, Rose will talk about.
Our entrance into further technology, that's what Tom and Greg will be talking about. And then our deep therapeutic expertise, Ute will be talking about. So each of these things we've identified as part of our overall strategy to drive forward our long-term growth, and I will, we will give those, we'll give you all a bit more detail on that in the subsequent presentations this morning. So where are we going in terms of our sustainable growth, our next three years or so? We see great, as I said, the market's moving in the right direction. We believe our company has significant momentum, and so we're well positioned to move forward very nicely. So on a revenue growth, we talked about 5%-6% on a market growth.
We believe we can grow at a compound annual growth rate of around about 7-10, and that's made up, obviously, of the market growth. Also, market share gains of around 1%-2%. We believe we're making market share gains based on what we're offering to the market and based on the solutions we're offering to customers. We also believe there's a. We also want to include an M&A contribution. We're back in the game on that. You've seen that over the last 6 months or so with HumanFirst and with BioTel, the imaging. We've strengthened our imaging component of our business. We've brought in our HumanFirst, the eCOA database aspect of our business. We are back in the game, and we're gonna continue to prosecute and work hard in that space.
So that's gonna give us another 1%-2%, we believe, on an annual basis. So overall, revenue growth at about 7%-10%. We feel very confident that we can deliver on that. In terms of EBITDA, we're gonna finish this year. We've made a commitment to you all to finish this year at around 21.4% for the year. So that's a significant uptake. I think we've talked about the improvement we made on an EBITDA basis, after the union and the delivery we've been. So I feel confident that we can get to 22.5% by 2027.
That's a figure that moves us up another 110 basis points or so from where we'll be this year, and we think we have a very good case to be able to do that, notwithstanding, of course, some of the puts and takes that inevitably happen. That will be made up of about 30%-35%, 30.5% on a gross margin basis, so not dramatically different. There'll be some ups and downs in that area as we see certain parts of the business move forward, others move backwards, and our ability to curtail or improve or mitigate through our AI, through our optimization of location, et cetera, et cetera, will be very much a part of that, but not a great deal of difference on the gross margin level.
On the SG&A, we believe we can continue to improve, to get down to sort of 7.5%-8%. Again, you know, I referenced the track record that our global business services group has in that space should give you absolute confidence that we can absolutely deliver on those margins and get to that 22.5 within that timeframe of 2027. On the EPS side of things, we're seeing low-to-mid-teens on a growth basis. You've seen, we just announced this morning an updated EPS guidance. We upped it to $10.10 at the midpoint to $15 based on the interest and the refinancing. But aside from that, we believe we can continue to do that. Our debt structure is optimized.
We are gonna continue to stay within the 1.5-2.5 from an Adjusted EBITDA leverage basis, and we also believe we want. We have capital market deployment. M&A will be, and I'll go to the next slide here. M&A will continue to be our focus, our priority. I make no qualms about that. That's something that we believe we want to continue to do. I talked about the 1%-2% on an M&A basis. We have a number of opportunities in the pipeline that we think can drive that. They'll be substantial, but probably not transformational. I'll put it in those terms. Our focus is on, we talked about in the past, string of pearls, where maybe they're gonna be a string of large pearls, or larger pearls.
'Cause I think we're a larger company, and obviously, to make the 1%-2%, we need to be able to bring on companies that are able to contribute that sort of level of particular revenue. We have a good track record in that space, and again, Simon will talk about that a bit more this afternoon, and I think, he, you know, he's the one who's been driving a lot of this, and you should again feel confident that we're able, we're gonna be able to deliver on that. So I did want to sort of get towards the end of the presentation here, the opening presentation here, by acknowledging, of course, the transition that was announced a couple of months ago with Brendan moving on.
We are, of course, sad to see Brendan go. He's been a terrific colleague and a terrific team member for a number of years, for 18 years, actually, with ICON the last 12 or so as a CFO. So we pay great tribute to him and the work that he's done in moving our organization to the position we're in now. We are engaged, as you'd completely expect, in a search, both externally and internally, for a new candidate.
Brendan's gonna be hard to replace, but I would say that you'll see the person who comes in will have the same sort of philosophy that we have as a management team and that Brendan brought to our finance group, and that Kate and Brendan bring to our external investor relations in terms of honesty, transparency, and being optimistic without being too over the top. And ultimately, I'd like to think that we deliver what we say we're gonna do. We do what we say we're gonna do. That's the mantra that we talk about a lot at ICON. Delivering on the statement, delivering on the promise.
So the new person who comes in will have that, will have that mandate and will have that very much that, that requirement, to deliver that. We will be able to, I think, provide you with a significant, well, a different update, an update in July, in a couple of months when we announce our quarter two. We are moving towards a shortlist of candidates. We have some very good candidates on that, on that list, and we believe that we're gonna be able to bring in someone who's gonna be able to continue Brendan's legacy going forward and continue moving ICON forward in the direction that we all, we all would foresee. I'm certainly gonna be around for the, for the longer term.
I hesitate to call myself the, the Warren Buffett of the CRO industry, but, I'm certainly committed to staying within the company and certainly for the, for the next three years or so, and certainly for that midterm foreseen timeline that we talked about. I love this... I love this company. I very much enjoy working with this management team. And we'll have some opportunity, I think, to continue to work hard and play hard as we go forward. So with that, I'll just finish off the presentation by just reiterating the messages that I put to you at the start of this presentation. We're in a good place. The market, we believe, is very solid, very strong, very constructive.
Whether it be the scientific opportunities, whether it be the technology, whether it be the convergence of those things that bring us opportunity to do more work, to do more clinical trials, to bring more drugs and devices to market in a more efficient manner. We have many more tailwinds than we do have headwinds. We do have some headwinds. You'll all be aware of that. We have an election coming up at the end of the year. We're not sure where the IRA is going. We have some geopolitical issues, of course, around the world. That will always be the case. I've been in the industry for 30+ years, and there's always something going on in that space. Our job is to mitigate the challenges or mitigate the risks in that and take advantage of the opportunities.
I think ICON is well positioned to take advantage of those opportunities, but we know that we have to keep moving. We know we can't stand still, and so we commit to continuing to evolve as we digitalize the whole clinical development space, as we bring AI and machine learning into that space. We are committed to moving that forward to the advantage of our customers, and we believe we're, as I say, extremely well positioned to be able to do that. So with that, I'll hold up, and I will introduce Barry Balfe, who will now talk about advancing our leadership within the large pharma segment. Thank you.
Thank you, Steve. Thank you, everybody. As Steve said, I'm gonna talk for a little while about what we loosely refer to as the large pharma space, but let's expand that a little bit and talk about the top 60 companies by definition of R&D spend. Really, what we want to focus on is how we've established and how we propose to expand a leadership position in this sector. In the last 2-3 years, we really have gone through a point of inflection, both in terms of the challenges that these customers are facing, but also in terms of our ability to partner with them successfully. The rate at which we've managed to add new alliances in this space and to expand the alliances we already have into new business areas has increased.
One of the founding pillars of the deal rationale for the merger between ICON and PRA was that we would advance our position in this sector, and I'm pleased to say that is borne out by the data. We have seen in the last 18 months, in my 25 years, the most sustained and intense period of realignment or refreshing of large pharma preferred partnerships. It's particularly encouraging that ICON has come out of that period with all of the alliances we had before, many of them expanded, and a number of new alliances, where we've either replaced an incumbent or added ourselves into the mix where previously we didn't compete. We'll talk a little bit about why that is.
Steve has already alluded to the change in our organizational structure, the fact that we had a dedicated full-service outsourcing business targeted at large pharma, and the decision to align that with our FSP, or functional resourcing business. Substantially more than 90% of that FSP business is in this space. So there was a real, strong rationale for aligning those two businesses such that we could meet the needs of these accounts more holistically. Gone are the days where we talk to these customers about single studies.... overwhelmingly, this space is characterized by long-term strategic alliance partnerships that are global, that are multifunctional, that span multiple therapeutic areas, and involve increasingly the need for both FSP and for full-service solutions.
I'll talk a little bit about how that's evolved in the last 2-3 years, what the implications are for our customers, and indeed, the implications for us and our competitive position going forward. As we go through, I will try and shed some light on why we've managed to accelerate our success in this space, why we believe we can not just sustain, but accelerate that competitive advantage and that leadership position, and we'll try and finish with an example just to make some of that real in the context of one particular customer. Steve has already alluded to some of the macro dynamics across drug development. I guess I wanted to revisit them specifically in the context of these top 60 companies, and I guess with a particular focus on the top 25 or so.
If there's one theme I would ask you to take from this particular section, it's that of challenge in pharma as an opportunity for CRO. We know all about patent expiries and what that means in terms of the urgency with which our customers need to replace decreasing revenue streams. Political and regulatory pressures that either threaten pricing or indeed increase the costs of running clinical trials as they become increasingly complex and potentially more expensive, absent innovations that move the dial to the country. We know that the number of unique and total endpoints in clinical trials continue to go up, and that pharma require partners not only to execute these trials, but to optimize their portfolio delivery engines, to be able to design them better, to run them better.
That means faster, more efficiently, more flexibly, and I think agility is something we need to think more and more about, but also more predictably. At a time when cost of capital is rising, when bottom lines are under stress, it's really important that we're able to deliver predictably how long these trials take to run, how much they cost to run, and where the potential points of inflection are. But really, I wanted to revisit the point that Steve made here in terms of the innovation piece. We are in a moment where we're sitting at the confluence of two revolutions, in my opinion. We know all about the technological revolution. We think AI will perhaps have a profound impact in the relatively near term on drug discovery, on the research end of R&D.
And as Steve has already articulated, we are already seeing benefit, particularly in the areas of efficiency, in perhaps some of the more mundane applications around document AI, around resource projections, around proactive data and analytics that enable us to have better clarity around in-flight programs. But in parallel, we are also at a moment of profound change in biomedical science. We've talked equally about the cutting-edge science that's really coming to bear for the first time. We think about where we're going with mRNA and others. But we're also really unlocking the potential of science that was well understood, perhaps in the laboratory 20 years ago, but only now can be moved from the laboratory and into the clinic.
We're able to sequence hundreds of times more new molecular entities than we were at the turn of the century, and we think some of these AI and new tools will help us better match individual molecules to disease states and processes where they may be of benefit. So if I can make a somewhat simplistic analogy, if the plate size is under pressure in terms of cost, the buffet is certainly expanding, and these customers are very much in need of partners who can help them optimize their efforts to back the right horses in these races.
The other thing that I think speaks to a positioning advantage for ICON, and Chris and I work very closely on this, is that with our new scale, with our dedicated focus in both biotech and pharma, as we see sustained deal activity between large pharma companies and biotechs and other sources of investment, we are increasingly likely to be on both sides of that transaction. We had an example recently where a TL1A had started life in a large pharma, where ICON ran the phase I and phase II studies. When that was out-licensed into a biotech vehicle, we were able to go there and make a really strong argument, not only for ICON's experience with the drug class, but with the specific molecule, the ability to deploy resources who had shepherded that molecule from its early stages into phase II.
When that company was subsequently acquired by a third-party large pharma, we were able to come back again with all of the resources that had been with the molecule from the beginning and take in, at the start of a new strategic alliance partnership, a very significant bolus of work, hundreds of millions of dollars of work, based on that incumbency on both sides of the equation. So having that positioning advantage where we can really engage with molecules as they go through their life cycle is very, very significant for us. So if we take nothing else from this, it is that there is, of course, challenge. Nobody's declaring victory in the pharma industry.
There's a lot of challenge out there in terms of cost, in terms of revenue, in terms of complexity, in terms of some of these novel scientific areas that require deep study and deep expertise to meet the needs of our customers. But there is significant opportunity. In times of challenge for pharma, CROs like ICON are very much more in demand, and companies like us that can help create value at the portfolio level, at the enterprise level, we believe will continue to outperform the index. I believe that's a big part of why we've been able to add significant number of alliances in recent times. As Steve said, an additional 3 in the top 20, but substantially more than that across the top 60. I do get asked, and it is fair to say, that these alliances don't come to fruition overnight.
We know that on average, these alliances may take as much as three years to come to steady state, but we do have the advantage of knowing how these alliances are likely to progress over time. So it gives us a lot of confidence, having seen these alliances that have come on board, more or less since the union of ICON and PRA, to really make some projections for the midterm around how we return to those high single-digit revenue growth numbers that Steve talked about and sustain a competitive advantage, not just in our core clinical spaces, but also these large global alliances allow us to cross-sell across the whole enterprise as we partner with Ute and others to bring in our laboratory services, our bioanalytical services, our real-world evidence, and other areas like decentralized clinical trials. And we are able to bring those to bear very successfully.
Steve mentioned at the top that among our key strategic priorities, leadership in the large pharma space was one of them, and I guess I just wanted to highlight some of the things myself and the team are focused on in this sector. One of the advantages we have, given our scale, is the ability to invest in these partnerships on the front end, and that's human capital in terms of really dedicating significant expertise at significant scale at the beginning of a new alliance, so leading with a little cost in the anticipation that the revenue will follow. But it also means increasingly investing in the digital infrastructure that supports these large strategic partnerships. Gone are the days where you will find too many of these partnerships that are solely based on either sponsor or CRO infrastructure.
Increasingly, we see the need to deploy aspects of both and to ensure seamless data flow from external parties through both the sponsor and the CRO systems. Seamless flow of data through interoperable systems requires a level of infrastructure, of expertise, and front-ended investment to ensure that these partnerships get off the ground very quickly. And it helps us to partner with customers in a way that differentiates between those areas they may feel they have significant competence and wish to leverage their own capability, and those areas where they want to blend in the CRO infrastructure, whether that be people, process, or technology. And Rose is gonna talk very significant area around site identification, site selection, how we believe we have an industry-leading capability as one example of where we blend that into our customers.
Tom will talk more about digital innovation, so I don't propose to go too deep on that just now. But this area, if there's one defining challenge our industry faces, it is to identify not just great clinical trial investigators, but those who are the right match for a particular study at a particular moment in time. It is so important. In a world where significantly fewer than 5% of clinicians have chosen ever to be clinical trial investigators, and where fewer than half of those choose to do so more than once, it's really important that we identify the right partners for individual trials. Not only are we going to have an operational benefit as those sites outperform, not only are we going to be able to get to patients faster and bring them clinical trials, but we're also able to bring investigators work they can do.
Healthcare infrastructures are under stress. Companies like ICON, who are able to bring not just resource support to these sites, but to bring them studies with which they can excel, increases the likelihood of a significant long-term partnership with these sites and increases site performance significantly. So again, another advantage I think that ICON, and to be fair, one or two companies like us have. We've talked a little bit about the evolution in full service outsourcing versus functional outsourcing, and I guess I want to talk about a more recent trend towards blending those two, which is a significant priority for us, but perhaps a brief explainer. Project outsourcing, I guess over the last 30 years, pharma has increasingly taken individual studies or bundles of studies and outsourced them to CROs.
Over the last 10-15 years, increasingly, they have also looked at individual functions of their business that they ask ICON to execute across the totality of their business. Increasingly, I can think of very few large pharma customers in the top 60 who are not simultaneously running some of their work in-house, some of their work in FSP, and some of their work in full service. We should not think about FSP and FSO customers, full service customers. Increasingly, everybody's doing both. But if there's a single shift in the last 2-3 years, it is the degree to which that these customers are not only using both of these models, but they're seeking to blend the best of both of these models to a customized solution that is optimized for their particular needs.
We talked about how these market challenges and opportunities, affect large pharma, but the truth is they manifest differently in each of these companies, depending on what their development strategy is and how that distills into their partnership strategy, depending where they have strength and internal competence, versus where they may feel the need to lean more heavily on a company like ours. Perhaps a very crude example, a company who wants to outsource trials to ICON and perhaps a second, preferred provider. We tend to see one or two, probably increasingly two preferred providers in these large accounts, where they might look and say, "We'll give 50% of the studies to partner A, 50% of the studies to ICON, but we really like the way you do site identification feasibility.
Can we blend in an FSP model whereby you will run the site selection, the feasibility, across all of our studies, in-house or outsourced, and really blend that with the outsourcing and the insourcing models?" Similarly, we might be running an FSP, which is a range of solutions, I don't want to call them one size fits all, but which is more resource intensive, where the sponsor wants to deploy in certain aspects of ICON's full service capabilities. And it really was this trend that led us to align our full service and our FSP businesses under one business area.
There wasn't huge competitive advantage to be had in having two parts of ICON, each saying, "You should run your study this way or that way." The conversations that I want to have with heads of R&D, heads of development, is: How should you optimize your portfolio to run each study, to operate each function in a way that accelerates development, increases efficiency, agility, and predictability? We don't spend a lot of time talking about how to run $10 million studies for $9 million. This market is characterized about conversations where we say: How can we run a billion-dollar portfolio 20% faster or 30% more efficiently in partnership? And more and more, that involves blending the best of sponsor infrastructure and ICON's capabilities, hence, the idea of these blended models....
Now, it is true to say that in the full-service model, there is an increased delegation of responsibility to the CRO. Remains the largest part of our business. That's where people come to us and look for us to execute studies on their behalf. But there has been, as Steve said, you know, a migration of spend, and certainly an increase in the percentage of that market that's been FSP over the last 10 years or so. And one of the questions I get a lot is: Why can't we see that in your margin line? Why isn't the move from full service to FSP, where there's perhaps a lower delegation of responsibility, a lower ability for the CRO to create and perhaps capture value, why aren't we seeing that manifest in revenues, in margins?
The truth is, I don't believe what we're seeing is a migration from the top right to the bottom left of this slide. I think what we're seeing is a convergence towards the middle. FSPs that are increasingly adopting more elements of CRO infrastructure, where we're in a position to create and unequivocally capture some of that value, at the same time, where we're blending more functional solutions into the outsourced work that we do. Lots of people will say to us, "We want to give you these studies to run on an outsourced basis, but we're going to do an FSP for data management." That's where the advent of our centers of excellence for some of those support services are incredibly important, where we can leverage global scale without diluting our focus on this particular sector, or in Chris's case, in biotech.
So we need to think about how there's not just a capability advantage here, but also a positioning advantage for ICON. We are, by some distance, the largest CRO in the FSP space. In core clinical phase II, phase III, we're also the largest, one of perhaps two or three very large CROs. But I think we are the only, certainly the first one, to get very enthusiastic about this move towards the center ground. I think the CRO market, for too long, looked at these models as something of a threat to how business was traditionally done. At ICON, we believe our leadership position, our ability to increase our share of wallet in this sector, is predicated on our mastery, not just of both of the poles, but the ability to blend towards the center. So perhaps before we finish, I'll mention just one simple example.
This was a large pharma customer, where we weren't a particular partner of note, who had a number of regional monitoring FSP partners, and that was our start. Our entry point was joining as one of multiple, I think four or five, regional monitoring, clinical monitoring partners in quite a low-touch FSP models. And again, there's many shades of gray in that space. Over a period of three years, we moved from that relatively small acorn to being a very large global provider across a range of ancillary services. Not just sole provider across a range of FSPs, moving into the full service spaces, these blended solutions, and a range of support services. And we did it precisely by applying some of the tenets that I've just been talking about.
Instead of spending months haggling over the price per hour or month of a CRA, we were able to say, "You're buying 1,200 CRAs from me, but you're deploying them very inefficiently. Let's restructure the economics here. Allow ICON to take ownership of how they're deployed and assigned and managed, and we will underwrite savings," very, very significant savings, well north of 20%, that allows the pharma to create or to capture significant value, and also, in this case, ICON to share in that benefit. We were able to partner with this customer to point out significant inefficiencies in how they were running their study startup activities in-house. Very, very significant acceleration of site activation, more than 40% in some markets like North America.
When we think of the benefit that we are in a position to create, sustaining the highest levels of quality, but increasing speed and increasing efficiency, these are the differentiators in what is sometimes characterized as a poorly differentiated market. These are the differentiators that has allowed us to insinuate ourselves into these large strategic alliance partnerships and to develop a leading position that I believe gives us great confidence for continued and accelerated growth in the medium term. Looking forward to some questions on any of that in the Q&A, but for now, I'll hand over to Chris Smyth to talk about ICON Biotech.
Great. Thanks very much, Barry, and I'm Chris Smyth, President of ICON Biotech. ICON Biotech is a separate unit within ICON that has been designed to plan and deliver clinical trials specifically for our biotech and our small to mid-size pharma customers. I'm gonna talk to you today about how we've branded and evolved the biotech unit that we have at ICON, and how that has been done in order to accelerate the growth that we've all been talking about today. So I'll talk a little bit about the market and how we see it. I'll sort of build on what Steve has already said. But I'll also talk about, you know, why do we have a different unit? What are the specific needs of this customer base?
And then, what is it that we have at ICON in order to be able to meet those needs? And as Barry did, I'll finish up with a case study that shows really nicely how we're able to partner with our customers as they grow. So here on your right, you'll see we started 2024 in terms of biopharma money being raised in that first quarter, started very strongly, one of the best quarters or first quarters that there's been for several years. We also saw that through the customer sentiment, as we were talking with our customers, they were talking more and more about increasing their R&D spend on the back of that improvement in funding. There's also a dynamic within the market.
We're all very aware that the majority of the innovation in our industry comes from biotech, and that is underpinned by just this statistic here. When you look at the pipeline of next-generation biotherapeutics since 2017, that has been growing at a very strong CAGR. So Barry and Steve both mentioned this scientific innovation, this technological innovation, and when that aligns with what we're seeing here in terms of the improved funding, I think that gives us encouragement. We're cautiously optimistic that we are going to see growth in this biotech segment. I think we've all worked in the segment enough, though, to know that you know, we need to caveat that, we need to be cautiously optimistic. You know, we're still seeing in the news every day layoffs within biotech. We're still seeing the pipeline reprioritization.
We're still reading about some project cancellations. So, you know, I would say that, you know, we'll be cautiously optimistic about that. But I do think that we are in it is a good time for the biotech market, and I think, you know, in order for us to really make sure we're serving the needs of our customers, it's really important to understand what are those needs, specifically within biotech. The first one is capabilities. It's very hard for many of these companies that my division serves. It's very hard for them to build world-class or best-in-class capabilities. They're growing rapidly. They have a relative lack of development infrastructure, and so that means they're often turning to companies like ICON Biotech in order to get that full-service clinical offering that they need.
In terms of reputation, again, many of these companies are relatively new. They haven't built the relationships and the reputation with investigators, with regulators, and other key stakeholders. So it's, again, important, or an advantage if they come to us. We're able to provide those relationships and that reputation. And then finally, the operational innovation. What we see now more and more often is companies working with more and more specialized vendors in order to put together, and deliver advanced clinical trials. In order to do that, that requires a large-scale vendor management capability, which again, many of these companies, it's frankly simply impossible for them to possess. So as well as these, these needs, what we're also seeing, is that many of our customers have very specific expectations of us.
They're looking for therapeutic expertise, particularly in advanced therapeutics and advanced and complex trial designs. They're also looking for experience and understanding of working with biotech companies, and that is why they're coming to companies like us because we're able to provide them with the capabilities, with the resources, with the reputation, and with the operational innovation that they require for their studies. So having talked about what is it that they want, what is it that we have at ICON Biotech in order to be able to serve those needs? I think we're the best of both worlds. You know, we have the white glove, high touch offering that a small CRO has, but it's in the context of a large CRO that has the resources, the wide service offering, the global reach.
Our structure, we have a very streamlined structure that allows us to be highly responsive. Our people and our processes, as Steve mentioned, we have 8,000 people focused on biotech. That's what they do. That's their passion. Dedication. Many of our customers are required to wear many hats, and that's what we do within our group, wear many hats. We have less role fragmentation, much more dedication and assignment to the projects, which matches very nicely with what our customers expect. In terms of partnership, it is really, really important that we understand what it is that our customers want, and we tailor our offering for each and every customer. So that, again, is what we do. So we've spoken about the strategic initiatives.
I'm lucky enough to be involved in this one, where we are refocusing our efforts in order to increase awareness of our biotech offering. We've always had that infrastructure, but what we are doing is signaling to our customers that we have the biotech offering, and we're there to provide the service that they're looking for. One of the ways that we've done that, and you will have seen it, is we've launched the ICON Biotech brand. As I say, that is signaling that we're in the business of serving the needs of our customers. We've also looked to increase the penetration into existing and new customers. In order to do that, we've evolved our project delivery structure. We have an entrepreneurial culture.
We have a flat structure, and with that, we're able to offer, again, exactly what our customers want. It's a good match with their streamlined processes and smaller, smaller number of people within their company. Again, many of our customers stipulate they expect therapeutic alignment. Our customers are oncology biotechs or they're ophthalmology biotechs, and we've talked a lot about the scale that we have of 8,000 people. Many of our customers worry a little bit that they might get lost within that large group. One of the ways that we've been able to adapt and ensure that they don't is by structuring our group into these therapeutic areas. And then, that means that the, the customer is only operating with and only navigating through that smaller group that has been set up in order to specifically serve their needs.
One thing I would say that underpins all of this is we're seeing much more of a need for consultative partnership, as opposed to just a transactional relationship. One of the ways that we do that really, really well at ICON is we offer scientific, medical, therapeutic insights. We engage very, very early with our customers and follow them all the way through the partnerships that we have with them. I think, you know, some of you might well be asking, "Okay, with some of these changes, some of these enhancements, do you have any proof points as to how well this is working?" What I would say is it's probably too early for proof points, but we certainly have some early reads that are showing this is positively resonating with our customers.
Many of the customers that I've spoken to over the last four or five months have said that it's refreshing to have a genuine rather than a superficial biotech offering. In the first quarter of our earnings call, Steve spoke about... We saw a step up in our win rate in the first quarter, and I believe much of that is about our ability to very clearly show our customers that we have a strong team, and we are able, and we are set up to serve their needs very, very well. So I'll just finish with this case study. It's a study or a partnership that started back in 2015 with a single phase II study.
We were able, over time, to build the partnership all the way to the point where the customer had their first asset approved in many regions around the world, and then ultimately, last year, the company was acquired by a large pharma company. This partnership was built where we served. It's a full-service partnership. We worked on 3 assets for the company, 21 studies. It involved nearly 700 of our ICON staff over the lifetime of the partnership. We built the partnership from just that single transactional delivery of the phase II study. With the operational excellence and the high quality that we delivered, the partnership grew into a preferred partnership arrangement.
In actual fact, the board of the company asked their team to involve another CRO to diversify, to ensure that all their eggs were not in one basket. The performance of the other CRO was not a match for what this company was receiving from us at ICON, and therefore, we became the exclusive partner for that company. Like I say, we then took that partnership to a point where the first product was approved. This study and all the work that we did for the company was delivered to the highest quality. When that drug was being assessed for approval, we were audited at ICON, as were four of the sites. There were zero findings, and the quality was to the point where FDA decided they didn't need to audit the biotech company themselves.
Like I say, last year, 2023, the company was acquired by a large pharma company. That large pharma company was also a customer of ours, and so this is another example, as Barry was talking about, where because we have the incumbency, both in the biotech and also in the large pharma, we were able to keep that work. It facilitated the transition of work from the pharma or from the biotech to the pharma company, but also within ICON, from my division, biotech division, to Barry's division, the large pharma division. I think, you know, certainly within biotech, that's always been a risk, for companies. If you're focused on biotech, often the asset or the company will be acquired, and you lose the work.
This is a great advantage that we have because we have that scale in both divisions, and often we have the incumbency also that is working in our favor. So with that, I will, I'll finish. You know, ICON Biotech, we are an agile, flexible, focused, fully resourced division within ICON. We operate with the autonomy and the management resources to be able to move quickly within that larger, stable, supportive ICON organization. And with all of the activities that I've spoken to you about today, I believe we are really well-positioned to accelerate our growth. Thank you.
True to ICON form, we're running and delivering on efficiency, and we're about 15 minutes ahead of schedule. So, we'll take our break now for 15 minutes. So those of you on the webcast, you'll hear music hold until 11:30 A.M. So please be back in this room to start back up at 11:30 A.M. Eastern Time. Thanks.
[Background Music]
Okay, welcome back, everyone. We're going to start the second part of our session with Rose Kidd.
Okay, so before I start, I just wanna clarify with one of the points that Steve made earlier in his opening. I was actually 14 when I joined ICON, not 12. So before the break, you would have heard from Barry Balfe on the trends we're seeing in large pharma and from Chris Smyth in what we're seeing in the biotech sector. But when we look across all of our customer segments, there are three key themes, and we've heard it numerous times this morning. That's cost, efficiency, and speed. Maybe in different orders of priority, depending on the customer, but essentially it is the same three themes. You also heard this morning that we're not a company that sits still. We're continually challenging ourselves. Complacency is not in our DNA.
We're always looking, but more in a thoughtful and measured manner, of how we can be more efficient when it comes to delivering trials. How can we be better and faster, but at the same time focused on quality? This serves to increase our competitive advantage, which is essential in driving productivity across the organization. Our company has grown significantly over the past three years, and we've really looked at how we can leverage the resources and the expertise across the organization, very much like we've done in our GBS service through a center of excellence model. What does that give us? It gives us centralization and specialization at a global scale. It has allowed us to streamline our processes and our systems, leverage technology, and also have a resource function that is agile in nature and flexible according to the customer needs.
It has allowed us to create leading world-class functions that is fit for purpose for all customer segments. A great example of this is our novel approach to our site and patient solution. This is not just about the Accellacare site network. This is more than that. It is the end-to-end, identifying the right sites, using our One Search technology, getting those sites up faster, getting the patients into trials, but not only getting them into trials, patient retention is also key, and closing the study out in a cost-efficient manner and with high quality. We've selected functions within Operations Delivery, such as clinical data science, programming, safety management, for areas that are suitable for center of excellence approach. Why these? They were areas in terms of they were ripe for innovation. Highly manual in terms of how you execute, but technology advancing at a fast rate.
We leveraged the talent that we had across the organization in specialized areas, using the expertise across the globe. When we look at our site and patient approach, it was very much around our unique relationship with the sites and therefore the really unique relationship with the sites have with their patients, making sure that we get the right sites identified for the right study and for the right customer segment. Overall, what was key here is around, you've heard it this morning, predictable enrollment and predictable duration of a study. So the COEs are hubbed across the globe for two reasons. One, business continuity, very much like we've done in GBS, but also with a culture of innovation.
As I mentioned, these are areas that were highly manual, and having specialized expertise centralized together in hubs, it was about being able to leverage what we know is out there in RPA and AI, but with the right process that was going to lend us the right return. The culture, when I talk about innovation, it's around innovation at all levels, from the ground up, where we can test a hypothesis very quickly and scale it at a global level if we're seeing the advantage. How do we know it's working? We're seeing some data, certainly across when we talk about data processing.
We heard this morning there's an increasing number of data coming into the studies from wearables, from remote patient data, from DCTs, so the volume of data we're getting into the organization is increasing. We have been able to automate what I call data ingestion into the organization by reducing that time for north of 66%. We've recently completed a study for a customer. It was a 3-year study where we had 5 vendors involved, and the ask was to ingest data daily. By being able to automate that part of the process, we've been able to reduce the cost of the data import by 57%. We talk about data processing. This is when the data comes in. It has to be cleaned. We have to speak to the investigators.
We've been able to automate that segment of execution and reduced the time to do that by 39%. A fundamental aspect of any study is being able to deliver the data to customers. I talked earlier about speed being important. Through our center of excellence, we've been able to reduce our time to delivery by just under 50%. This is really important for customers, where they talk about speed to delivery, speed to data. What does it look like when we talk about our site and patient solutions? In one of Steve's earlier slides this morning, you would have seen KMR data saying that over 30% of the sites that are open in the industry fail to recruit a single patient.
When we look at similar data across our Accellacare network, and this is across all therapeutic areas, we're seeing that reduced to 16%. When we look at a therapeutic area which is growing in terms of epidemic in the obesity space, we are seeing a 0 non-enrollment from our site perspective when it comes to obesity. And it's fair to say when we look at... Obesity is now making up circa 20%-30% of our portfolio across our Accellacare site network. Not a surprise, seeing what we're seeing in the industry. One of the other barriers to sites being able to enroll in patients is what we call the site burden. There's an enormous amount of paperwork to be done at the sites. There's a lot of transactional activity that actually has to happen.
Using our Firecrest technology, according to a recent survey with our sites, is reducing that burden by 93%. What we're doing here is we are making it more attractive for the sites to engage with ICON and reduce that study burden. The other trend across the industry, of course, is trials are getting more complex. The sites need to be trained from a compliance perspective. Firecrest, when it first launched, was a training tool for our sites. We've seen an increase in training by 29% when they use our Firecrest technology. Bringing back to the initiatives, and we've heard a lot about site and patient solutions this morning.
So it's about the ecosystem that Steve talked about, so not just about the Accellacare site network, and using the technology in the right process that we believe is going to drive site and patient enrollment across our studies. Firecrest, as I said, was first launched to enhance training at the sites. We have now added elements into our Firecrest technology around accelerating site startup, making it easier for the sites. So on the right-hand side, you see site access, making it easier for the sites to work with ICON in terms of site activation, document exchange. Recognizing patients no longer, in some cases, want to come to the clinic, they want to be seen at home, or indeed, we have hybrid models of trials where we are collecting data remotely, making it easier to capture that data in real time.
What we have done here is we have integrated Firecrest technology, the site-facing portal, with the ICON digital platform, which is our patient-facing portal, and you will hear more from Tom later in the investment we're making in our digital portal from a patient perspective. This is the ecosystem that we've talked about. As we link sites with document exchange, as we link patients with technologies directly into the portal system, it means we're getting our data in real time. Coming back to some of the earlier points around where do we want to put our investment in terms of technology? Get the data in faster by auto ingestion, clean the data faster, and deliver the data faster to our customers.
The center of excellence continues to evolve, and while technology continues to evolve at a fast pace, we believe we are well positioned to partner with companies where RPA is going to help us, where AI is going to help us. Our approach has been very much around innovation at incremental process, rather than large scale transformation. It was about having the right technology to meet the pain points that we're seeing in the industry. It is allowing us to accelerate and deliver our studies faster and to higher quality by reducing the risk of human error. As we continue to execute more complex trials, and as we see the emergence of the obesity trials, where the data is coming in faster, our ability to process, to clean, to ingest, is gonna become even more important. We are well placed to execute at speed and at a competitive price.
Now, I'm gonna hand over to Ute.
So I would like to talk with you today about the therapeutic trends that we see, and subsequently, the increased need for a large global scale provider that can offer really comprehensive solutions in order to accommodate it. The scale and the breadth of ICON's therapeutic expertise is really driving the market leadership in key areas that we see. So when we look at the current market, it isn't a surprise for you that oncology continues to dominate the trials, followed by CNS and infectious diseases. When we look at the cell and gene therapy market, still a very active market, where we see about 2000 active trials going on.
You heard from my colleagues earlier today, we all see an increase in complexity of the trials that we do, and part of the complexity is caused by more complex molecular entities. But part of the complexity is also the significant increase in rare diseases that we see across a multitude of therapeutic areas. With the therapeutic, the scientific, and the strategic expertise that we have, and with the close relationship that our therapeutic experts have with the KOLs, with the early engagement that they do with specifically the biotech companies. I mean, as you heard from Chris earlier today, I mean, a lot of the science that happens, a lot of first in human studies that we see are happening in the biotech space.
The ability of that team also to have regular interactions with regulatory authorities, to talk about innovative endpoints, and other items, really enables us to identify very early on, where is the market going in terms of therapeutic development? And a good example is you heard that earlier, the obesity research that is currently going on with GLP-1 and other molecules developed in the space. So the innovative solutions that we can offer in terms of digital biomarkers, clinical endpoints, and digital health technology through our HumanFirst acquisition, really helps us to optimize trial designs and accelerate time to market, and that is really so very important to our clients. I mean, every month that you can get earlier to the market is a is a win.
The access to real world data and the ability that we have to tokenize patient data really drive effective outcomes and integrated solutions for commercial strategies very early on. Let's have a look what ICON's experience across all of these therapeutic areas looks like. The overall clinical trial experience that we have is what you actually expect a market leader to have. It reflects the R&D pipeline in terms of therapeutic areas, indications, as well as mechanism of actions. There is a significant need for patients, and specifically when we talk about oncology subpopulations, when we talk about rare diseases in neurology, there is a significant challenge to identify those patients.
But even if you identify these patients, as you have heard from Rose and others, it is important to ensure that you work with the sites and the patients to finally enroll them in clinical trials. In the specific rare disease area, I mean, if you, you know, sometimes sites could have one patient a year with that specific indication. If you miss to enroll that specific patient, you lose significant time. There's also, you know, a competition for patients and sites in areas like obesity, where you think there's a lot of patients available that can be actually enrolled in clinical trials. But it is important, also to optimize your trial design for these patients, because these patients have a choice. Sites have a choice which trials they would like to participate, as well as patients.
So it is important to minimize the burden for the individual patients, but also for the sites, and that is along the lines that Rose outlined earlier with how we can help sites to decrease that burden. Also, the complexity in the trial execution has increased, and we see an increased need in biomarker assessments. We see an increase in central pathology. We see an increase in central imaging and cardiac safety. So we have to basically accommodate all of these complexities and that needs kind of really a global provider to accommodate that.
So while we don't really have an impact on the study outcome, and you know, it's out of our control if the study meets the primary endpoint and the drug comes to market, ICON still contributed to about 60% of the 55 drugs that have been approved by the FDA in 2023, so a significant contribution to the drugs that came to the market. We talked about the complexity of trials, and I would like to address some unique nuances and challenges in complex therapeutic areas. I would like to take the cell and gene therapy, where we have conducted about 150 programs over the last five years, to walk you through a couple of nuances and challenges that we have seen and provided support to our customers.
The regulatory environment in cell and gene therapy is extremely, it's extremely challenging. It's constantly evolving down to the global country level, so you have to have, you have to have constant interactions with local authorities across the globe in different countries, really, in order to understand these requirements and help your client to get their protocols through. When we talk about product strategy and logistics, cell and gene therapy are the have the most challenging supply chain that we have ever seen in human history. So these are living therapies that are transported under extreme timeline and, timeline pressures. So if there is anything that goes wrong during that whole supply chain, think about there's a patient at the end waiting for this therapy to arrive.
If something goes wrong in the supply chain, that has an impact on patients' lives, and that's why it is overall so important. We talked about cell and gene therapy before, and I would like to discuss a case study that shows how we're building partnerships and how we are managing portfolios from early phase through the commercialization. We started to work with a company that had no experience in cell and gene therapy about 5 years ago, and we started to work on their first cell therapy study. You see, over the course of 5 years, we expanded the relationships to two cell therapy assets, and we expanded the overall trials to about 13 studies that we did. We completed both BLA submissions for both of the assets, and our client got two market authorizations for two assets....
We are still working with this client, client also on the long-term follow-up safety for those patients. So overall, ICON contributed to 4 out of the 6 FDA-approved CAR T-cell therapies, clearly showing our expertise in the market. So I talked during my presentation around integrated and comprehensive solutions that drive over our clinical development, and we are at the forefront of clinical research. So we constantly need to think about advancement, if that's in technology that you heard earlier today and will hear later today, but it's also around solutions and services that we can provide. With a shift overall towards personalized and precision medicine, there is a necessity of developing biomarkers, specific biomarkers for clinical trials, that we can accommodate in our central lab as well as in our BioA lab.
We also increased our capabilities in the clinical imaging and cardiac safety space over the last couple of months with the acquisition of BioTel, to accommodate also the increased needs that our clients have in that specific space. The ability to select digital biomarkers, clinical endpoints, and other digital health technology through our HumanFirst acquisition really enables us to understand and optimize trial designs and help our clients to simplify these trial designs and get them a drug earlier to the market. The ability also to tokenize our patients helps us to collect additional data, patient safety data, and this is extremely important also when you think about the most recent FDA regulation that came out, where specifically patients with CAR T-cell therapies need lifelong observations.
So you need to understand how you enable to follow up these patients for the rest of their life, of their life. So we are really excited about the advancements, that we made in the last couple of years, and we are looking forward to enhance our capabilities and solutions that we can provide in the future to enable our growth. And with that, I hand it over to our CFO, Brendan Brennan.
Hello, everyone. It's great to see you here today. Thank you for attending our conference. It's always nice to be in New York with the sun shining and such a beautiful view out the window. This is a bittersweet day for me, obviously. It's wonderful to be here. It's wonderful to represent ICON again, but as you know, you guys, I'm moving on to a different role. But I think one of the things we're gonna talk about and look about when we look at these slides that are coming now, is what a good place ICON is in as we look to the future. And that's really what we're here to talk about today, how we're positioned as an organization to move into the future. And I feel that really...
I'm not sure there's ever been a point in my career in ICON when we've been in a better place, either in the market terms, in the fundamental market that we have to work with, or in our ability to innovate and bring really a lot of energy to how clinical research is being developed and continues to evolve. So that's really some of the big pieces I want to leave you with today. In the financial section, we're gonna have a think and talk about why do we feel that's the case. And I certainly am gonna talk a lot about, or a little bit at least, about the history of our financial performance, which I think is one of the big pieces here. It's well ingrained in the organization. It's well ingrained in the organization.
We have a lot of practices and processes that we really use on a day-to-day basis, and it isn't just the finance team, and it isn't just the GBS team, it's across the organization. We've a real sense of financial responsibility in the company, and that was given to us by our founders, who were very financially, and as I've mentioned to you guys over the years, very conservative folks. So that mindset is very much part of our DNA and will continue as a strong element of how we run this business into the future. We've seen, obviously, a good performance from our cash flow perspective. That gives us opportunity, as it did in the past.
When we were back looking at being an acquirer in this space, it was the solidity of our balance sheet and our ability to get cash flows out that gave us the opportunity to do the PRA deal, to put ourselves in a different position. That's exactly where we find ourselves now today. Two years on from, two and a half, three years on from doing the integration, we feel that we are now back to a place where our financial balance sheet gives us a differentiated ability to move in our marketplace, and as Steve said, really pick up some of those bigger pearls as we go forward. And of course, one of the big things, and I think it's been well-received so far today, is our midterm guidance, and I'll talk about that at the end.
But you'll see again from the fundamentals of how we've built over time. How we are looking at those different percentages, whether it's revenue growth, whether it's EBITDA growth, whether it's EPS growth, very fundamental plans. And any of you who know us and worked with us over the years will know we do not say things we feel we cannot do. So we feel that these are actionable, operational targets. They are supported by solid strategy, and that's really the big piece I want to bring out here. You've heard my colleagues talking about that earlier today. You've heard about our positioning in large pharma as well as biotech.
You've heard about how we leverage science and technology to get the benefits, and I think that's what we continue to see, a strategy that really supports that very, very solid financial performance map as we go forward. You'll, you'll all be familiar, or maybe not familiar, but you'll all have been aware of our financial performance over the years. As I looked at this graphic, yesterday, obviously, I've been around for a chunk of that period, and certainly took over in, as CFO at the end of 2011. I did note to my colleagues that I thought, you know, the... that it's really taken off like a rocket since, since 2011. Funny enough, they didn't think it was important as COVID pandemic, but, you know, they tell, you know, but, we, we agreed to disagree on that particular point.
But it's been a performance, seriously, and, folks, it's been a performance period that has been exemplary. I think, again, we built in a lot of those financial disciplines into how we act as an organization, and we continue to look to the future with a huge ambition about that line and the, both the bars and the lines continuing up as we go forward. And I think that's really there for us to do. Looking at the granularity of that underneath in the P&L account then, and the different elements of revenue, Adjusted EBITDA, earnings per share and free cash flow. Obviously, doing the deal brought us to a different position in the marketplace, more than double the size of the company.
And we've seen that, being very, very well delivered in terms of our integration, over time, so 13.4% of a CAGR. But as we, as we know, again, as we look out and we talk about our guidance for 2024, that story continues. And we look to grow at in or around that 6% mark as we come into 2024, an accelerated rate from where we were in 2022 and 2023. And again, that gives us good visibility to the next step of our journey, which is about getting back into the high single digits, as we'll talk to more in a few moments.
Our CAGR, I think, around EBITDA, is probably one of the most exceptional, and sometimes, I don't know, and we, we've chatted about this a lot over time with all of you guys, I wouldn't say overlooked, but maybe in context of what we've done on that one over the course of an integration of two very large organizations, something that we can all be very, very proud of. And obviously, we've seen that grow very substantially ahead of revenue, even in the context of doing the integration. And where we are now in 2024 is we'll see an EBITDA in dollar terms, that's nearly 200% of what we did in 2021.
That's a pretty exceptional position to be in as an organization, and again, I think fundamentally speaks to our ability not only to grow at our market pace, but continue to leverage our operating and EBITDA perspective and be able to develop that over time. So pretty, pretty extraordinary history, but with, with good signs of that continuing. And again, we'll talk a little bit more about our EBITDA expansion plans as we move forward. Our earnings per share has been a very solid piece of that as well. Of course, that's been impacted by our interest environment that we've seen over the last number of years. We did a deal where we brought our, obviously, multiples up significantly in a period of time where interest rates also went up significantly, and obviously, that was a drag factor.
But where we are now is on the different edge of the interest curve and having got our debt very much back in control and not such a significant burden on our, on our EPS growth. So we'll continue to see good growth, and of course, in 2024, you're seeing high-teens growth on our earnings growth this year, of course, with a very substantial job done around our interest. And of course, as Steve mentioned earlier on, we have Eimear Lyons with us here today, who's very, very fundamental in terms of actually moving the dial to get us to that position. So $110 million of interest savings year-over-year from 2023 to 2024. Finally, on this, you know, it's very true.
It's a truism that the P&L on the balance sheet's fine, but everybody who knows finances will look immediately at the cash flow statement, right? Did you get what you said you did on your P&L into cash and into the bank? It's an extraordinarily important metric that we all look at. And obviously, during, you know, we've over the period, certainly seen very, very significant CAGR growth, as well. Made our 2023 numbers a real return to form in that and started off 2024, importantly, in a really good position from cash generation as well. So that very strong position in 2023 rolling into 2024, we expect that to be maintained, and we expect to do well in excess of $1 billion as we come into 2024 from a cash generation perspective.
A very good, well-embedded mindset around financial performance in this organization, very minded to the future as well in terms of our ability to continue to grow. This is the long-term picture on our SG&A percentage. I'll let you just soak that in for a moment. We started talking about this in 2009, 15 years ago, and how, as an organization, we felt we were moving to a new plateau of scale that would really allow us to leverage our SG&A base, particularly over that period of time. I suppose when we started talking about it, we had certain principles in our mind about centralization, standardization, about using, you know, enterprise-wide technologies to allow us to really move the dial in terms of what we could do here.
And that's where we started that conversation, but it has been an evolution. It has absolutely been an evolution. We started talking about this, as I said, all those years ago, and we were really just really chipping at the iceberg at that point in time.... This has been a core fundamental element of the embedded part of our organization, about how we think about the future of the company. No one in our organization ever comes in thinking, "I don't have to have a return on investment," or, "I don't have to think about the financial implications of what I'm doing." Everyone thinks about that all of the time, and it's because it's embedded that it's successful. You know, it's not about one or two of the executives in the organization talking to people about this.
It's a thing that people expect us to do to be able to continue to use our scale to advantage ourselves from a leverage perspective. We'll see that continue. As we go into 2024, you're gonna see that number drop below 9% for the full year 2024, and it's part of the ambition that we're gonna talk to in terms of our overall financial performance expectations as we go forward as well. This is something that's very embedded into the organization and something that we feel that we've got a good roadmap and a good visibility to that roadmap as to how we take that percentage down even from those numbers.
Obviously, when we came together as an organization and the two, two, large legacy businesses came together, we were thinking about numerous factors, but we were also thinking about the balance in our organization. As we look at this slide, particularly, we can see an extremely well-balanced organization from the large pharma, which represent on this particular slide, top 20, which is that light blue section, to all other customers. And again, that very, very balanced portfolio is something that we're very proud of. In that period of time, of course, the other thing to note, perhaps, is not only has our biotech part of our organization and mid-size part of our organization remained very strong, but we actually have seen a reduction in the total part of that sphere that relates to emerging biopharmas coming down to 10%.
So it's still a very good and important part of our business. Chris spoke about how biotech is gonna be somewhere we're continuing to look at. We've all seen the data around strong biotech funding in the first part of the year, and we really do expect to take the advantage of that growth as we move forward. But you can see from this slide, a very well-balanced portfolio from a customer size perspective. And it gives us a really, a good sense of insulation as we go forward, that we can take those challenges, and we can move with them, as we have done over the last number of years. One of the other big pieces, and I think this really is...
You know, I mean, there are those of you who've been around long enough to probably remember days when we were sitting in Dublin, doing investor days like this, and probably would've said, biggest customer on that screen was probably around probably about a third of the business, truth be told. When you were sitting there then, did you ever think we'd be looking at this graphic today, which shows that no one is over 10% of the business? And in fact, the largest growth elements of our business, you can see here in the light blue, and the purple sections here, those customers who are outside the top 10, actually growing at a much more significant rate. So a very much diversified, de-risked platform of customers as we go forward.
And that broad experience that we've had around not only doing well in that biotech space, but expanding our relationships in the large pharma groups, has certainly stood to our benefit in terms of our diversification as a business, and as I said, it's a million miles away from the company we were in the past in terms of risk and risk exposure. This is a section we're gonna have maybe talk a bit, little bit more around in the breakout session as well. So as you guys know, and I suppose people will have really focused on, obviously, our PRA acquisition back in 2021, but you can see a very, very substantial part of our DNA over time has been in acquiring and integrating, importantly, integrating, companies. And that's been a big part of the engine of ICON. This is really important to us.
It's something that, Simon and Jeremy, later on today, will be talking to our actual process. We feel our process is differentiated. We feel that we actually have now a much slicker, better ability to quickly identify the areas that need to be integrated quickly, those areas that need to be invested in, and those areas that need to be championed and brought out into our larger organizations when we bring in companies into our infrastructure. So this is really as we go forward, and we think about our capital and our capital deployment, and being back in terms of investment grade, and having the ability to go into the largest, deepest investment-grade bond market in the world, obviously from cash generation or funding access perspective.
We really are very focused on how we do that from an M&A perspective, and we've a very, very long period of knowledge and ability to be able to execute on that and execute well, importantly, to ensure that we're creating value for our shareholders, our customers, as we go through that. This will be, again, a bit of a, bit of a glory lap, this one in terms of our, our finance organization and our, our organization, generally speaking.
This is where we were on the day we did the deal, 4.1x on our debt-to-EBITDA leverage, and we've obviously brought that down into that range that Steve referenced earlier on, of 1.5x-2.5x, which is very much where we expect to be able to quite comfortably operate as we go forward, while continuing to do those large M&A deals that we talked about. It was a very much a focused period, and we obviously have been able to get back to investment-grade status during that period of time. I think it was, you know, very interesting as an organization, if you think about it critically.
We were a company that was a cash-positive company up until the point we did the deal, or the most significant deal of our history, I should say, which was the PRA acquisition. That gives you some mindset of our ability not only to be conservative, but also to know when we need, from a strategic perspective, to take a little bit of risk, to go there, but also to be mindful about how we get back to a place where we are happy with as an organization.
Again, I think that speaks to the culture of financial responsibility in this organization, and that laser-like focus was something that was hugely important to us, and I think to a lot of shareholders during that period, to, in order to, for us to really get back to a position where we can continue to be, and continue to expand as one of the real strong players in this industry. This is a little more detail, and I'll, I'll let Eimear speak to some of this when we get to the breakout session and the Q&A session. But we did an extraordinarily good job on that bond raise, and full credit goes to her and the team in terms of that job.
Not only actually repricing that, the Term Loan B earlier in the year, but doing the bond raise, where, as you can see, we were over 7.5 times oversubscribed on a $2 billion bond. It's a really, really significant achievement. That level of demand is a result of a good strategy and a good communication around this bond piece, but also, it allowed us to actually get pricing that was probably at two notches better than we were actually given by S&P and Moody's, such was that level of demand. So the pricing there on the screen is really an outperformance in terms of our investment-grade status.
As we can see, it kind of comes down to a blended rate of just under 6%, but also importantly, and we'll talk about it again, but very much allowed us to get to that $110 million of interest savings year-over-year, which went above our expectations even when we came into this process. As I said, and Steve spoke to this at the beginning of the presentation as well, this allows us to be back to where we want to be, to be able to access that deep bond market, to be able to think about ourselves from a capital deployment perspective in a way that will grow our ancillary businesses through M&A, and that is our primary use of our better leveraged position now.
We've spoken about here this morning, site and patient, and how important that is to us as an organization. That's growing strongly organically, but we do think there's opportunity from an M&A perspective to continue to expand. Our late-phase and real-world evidence business, again, has been a very good growth story for us and an area where we feel that there's great opportunity in that marketplace, growing at above actually the marketplace levels of growth, as we go forward. Our lab services, of course, we're competitive in that space as well, and we want to continue to grow there, which you guys all know, very good space, limited number of competitive options. Also, an area where there's very good margin profiles, so we look to continue to grow there.
Finally, of course, looking at our scientific, therapeutic, and even indeed, geographical depth in niche areas to make sure that we are keeping our eyes to every part of the marketplace and really in a very good place to grow. The other piece I'll just comment quickly on this slide is around our capital deployment from a capital expenditure perspective. You're going to see in the breakout sessions after lunch a lot around the technology investments we've been doing, and I think they're going to be really interesting to you guys. I think it's going to give you an opportunity to dive into those a little bit more, to talk to Tom, to have an opportunity to really kind of understand our entire infrastructure and platforms from an IT perspective.
That's certainly an area that we're going to continue to invest in strongly as a company, and we do expect to be spending in around the $150 million-$250 million mark per year on our continued investment in technology. Our GBS piece is something that we will continue to look at as well. I've mentioned this on numerous occasions. I've had plenty of conversations with you over the years. One of the things I want to kind of emphasize from this particular slide, and indeed, the next one, is our evolution in that process. This is, you know, we started out looking at locations, process, standardization. We are now at a point where we're much, much more sophisticated in that group. We can think about it from a technology use perspective.
We can get better leverage, and we will continue to do that over time. So this is the, if you like, the fundamental start, and where we are today. The future of this journey is around elements that we've talked about in the past: the use of robotics, the taking out of hours out of people's time, to be able to focus on more value creation. And that's something that we've been very serious about right across the organization, not just in SG&A, but as we mentioned, right across the organization. And we've set gold ambition- or bold ambitions for the future in terms of where we think those savings can get to. And certainly, that's a very fundamental part of how we feel as an organization, we can continue to leverage our SG&A, but it's an evolution.
It's an evolution of systems, it's an evolution of machine learning, it's an evolution of bringing AI into the processes, again, to be able to focus on really ensuring we're moving the dial. That brings us, I suppose, to where we... I suppose, if, if you like, the meat and potatoes of, of today, of what we wanted to talk to you guys about, which is our, our midterm and longer-term financial growth plans here. Strong, strong fundamentals, really good, strong, strong core market growth, aided by market share gains and M&A contribution. 22.5%, which as we said, and I've spoken about, we feel we have a very fundamental plan on how we get there. Getting to 7.5%-8% on SG&A, but also maintaining good gross margin profile as we go forward.
And finally, then, of course, that all dropping down now with our optimized capital structure and good tax rates to ensure that we continue to grow in those solid, low, mid-teen range. Finally, from me, just before we go to kind of wrapping up. This is, obviously, the new updated guidance for today. You guys will be very familiar with most of our key assumptions here and our growth rates, which we feel, again, are very solid and very doable. But obviously, the addition today is the additional 10 cents from the piece around interest. And you'll see on the bullets below the significant update there as being the total interest expense now in the range of $200 million-$210 million.
Before we move to Q&A, I just wanted to take a moment to really kind of look at what we're talking about today. A very fundamentally solid marketplace, a company that's extraordinarily well-positioned. As I said, probably in my experience, the best position we have ever been in to continue to capitalize and grow in that marketplace. And a company very much focused, and you're going to see a lot more about this in the afternoon, on innovation and the ability to grow and delivering that growth to both our customers and our shareholders as we go forward. And with that, we'll hand over to Q&A. Thank you very much.
Okay, so we just need one minute to get set up here. I'll invite all of my colleagues from the ICON team to come join us on stage. If we could just have a hand with the chairs up at the top. We will have mics in the audience. I will have one, and my colleague Peter McNally will also have a mic. Please wait until you have a mic to ask your question so that everyone on the webcast, obviously, can hear the question being asked as well. So just give us one minute, and we'll get started. Is that the only live one?
No, it's live.
Hello? Okay. Dave Windley, Jefferies.
Hi. Thanks. Lots of good stuff this morning, so thank you for the presentations. I have a multi-parter on, on, the market outlook. So, focusing on outsourcing penetration, we can get there a couple of ways. One would be kind of what I will call same store or same client outsourcing more of their portfolio. The other way would be higher percentage outsourcing biotech growing faster and kind of mix shifting toward higher outsourcing clients. As your thought process around outsourcing, as you incorporate 1%-2% of your growth from outsourcing, what are the drivers of that, 1%-2%? So that's number one. Thanks.
Okay, I'll start with that one, Dave. I think as we see the penetration, it's really around our large pharma segment. I'll ask Barry to talk about this in a moment, but we... You know, as we look at our large pharma segment, there's they clearly have significant clinical development capabilities that we believe we can do more of, as opposed to the biotechs and, to some extent, the mid-sized pharma companies who have less. And so there's... They have to outsource. They're already in that situation. So I would see the majority of that penetration, and traditionally it's come from larger pharma customers. And it waxes and wanes a little bit. Sometimes, I think we've seen in the last couple of years, it's moved more towards the functional.
We see some companies coming more towards the full service. As Barry said, that blended opportunity, that hybrid solution, I think, is something that we're seeing more of. So I'd put it more in the large pharma space, but, Barry, why don't you make a comment on that one?
Yeah, I agree. I think there's a couple of different poles in there, particularly in-
... relatively volatile times, I think there's a certain attraction to converting to variable headcount from in-house headcount in the FSP context, which is obviously one way of growing that penetration. And across the large alliances, we certainly see increased demand for some of the ancillary services, which traditionally perhaps we weren't seeing as high demand at the same level of scale. So we certainly see increased penetration over the period as Steve has described.
Great. Now focusing on the 5%-6%, kind of the base of R&D growth, I think you talked about large. I think you're defining large as maybe even up to the top 60, and you talked about that large being a 3% growth, which sounds adequately conservative. There are a couple things I'm thinking about. In the nearer term, clinical trial starts are kind of indisputably down, and what are you thinking about that? And then two, you also commented about 190 drugs losing exclusivity. I think that's in the neighborhood of $125 billion-$150 billion of sales headwind.
Yep.
How is that, and how are those two things incorporated into your thoughts about R&D growth in the short and medium term?
Yeah, I think I'll take it again. Barry might want to comment. You know, we see, we've certainly seen the first quarter numbers in terms of clinical trial starts down, Dave. I don't know that we've particularly think that that's a, you know, a major trend at this stage. If you look at the year-to-year, 2022, 2023 starts are about the same. Certainly, quarter one's down a little bit and, you know, whether that trend continues, we'll see. But I'm not sure we're ready to suggest that's a long-term trend at this point. Barry, do you want to make a comment on that?
No, I think you've covered it. Obviously, we look at trial starts as one of a number of factors. We also look at the nature, scale, duration, and cost of the trials. Obviously, for us, there's a significant difference there in terms of what types of trials customers are running, what services they're partnering with us in relation to those trials for, and obviously, what share of that market that we can capture. So as Steve says, nothing I'd be calling out as a particularly significant trend in the immediate term.
Anne, go ahead.
Thanks. Ann Hynes from Mizuho Securities. Can you actually... ICON Biotech, can you break out what the revenue is right now, and within your 7%-10% growth algorithm, what you expect that to grow?
Yeah, we're not specific about our biotech revenues, Anne. It's a significant part of our business, in the vicinity of, what is it? 21%-ish. I'm trying to, I'm trying to think exactly. So it's, it's, you know, it's a significant part. We believe there's... It, it's, it's probably growing at a, at a reasonable rate, market-type rate. But we do believe, based on what Chris has said and, and the, the opportunity we have for reboot and rebrand, to move that up into the, low, certainly low double digits, even higher at this point. We do believe that the market is going to grow faster, as we, as we've said. We believe we have a good, a, a good offering and, and that we're ready to, you know, to move that one forward.
Do you want to add to that? No? Okay.
I mean, as Steve had said earlier, Anne, in terms of our expectations around market growth, there's obviously that difference between large pharma and biotech, and obviously, in terms of how we think about our businesses growing, in terms of taking market share, those would be in advance of the baseline market growth. So, large pharma in and around sort of that 3%, and we expect biotech to look more like high single digits in terms of that R&D growth over the midterm period. So, that would be sort of market share gains on top of that. Okay. Elizabeth.
Hi, Elizabeth Anderson from Evercore ISI. I, I think over time, we've been sort of conditioned to think about the almost, like, cap of your gross margins being about 30%. I noticed obviously today we're sort of starting to talk about edging that up a little bit. Can you talk about, is that really a function of sort of mix in the move more into some of the technology services? Can you... And can you help us kind of understand that opportunity?
Again, I'll start, and Brendan might want to jump in. Yeah, we do see some potential upside in the gross margin, but it's probably more limited than it is in the SG&A place. And the genesis of that improvement, and there are puts and takes, as we said, as the business mix changes, is around the AI and is around our ability to right-position, right-locate the marketplace. So the AI, the machine learning, those technological advances that we're bringing to our company is not just in the global business service area. That's where we'll get significant benefit, of course. But we can apply this to our COGS as well, and to our ability to prosecute clinical trials as well.
So we do see ultimately that we can maintain, at least maintain, and possibly uptick a little bit on the gross margin, but the most benefit in terms of EBITDA will come at the SG&A level.
Yeah, yeah, I think that, that's right. And, you know, Elizabeth, we've always talked about the fact that when we think about margin, we're also thinking about value creation, and we're thinking about value creation for our customers. So there's always going to be that, that trade-off between top-line growth and, and gross margin expansion, and we're very serious as an organization about our top-line growth. We think we are the market leader to... You know, we really do feel that we are the CRO to chase, and we want to remain competitive. We don't want to make it easy for our competitors, so we're gonna be-- you know, we're gonna keep our pencil sharp commercially, and we're gonna use those advantages that Steve outlined from a, from a, you know, from a technology perspective, to ensure that we're delivering that value to our customers as well.
Luke.
Luke Sergott from Barclays. We'll start off on the-
I don't think that's working, that microphone. Look, is it-
Do you want me to speak up louder?
Can we hear online? Is it gonna be - are we able to hear online with ... Go.
Just go for it.
Project, project.
There we go. Easy enough. All right, so we talked about the M&A. You guys have a much larger business now, and you're adding 1-2 percentage points baked within that midterm guide. Talk about, and kind of laid out some of the areas where you'd like to focus, but those are going to be arguably a lot bigger businesses. So, you know, with the current structure of the CRO industry, you guys don't really need the global scale, and it's not like you're going to go after another CRO. So I'm just trying to think about when you're adding these technologies, you know, what the margin profile could look like. Could it be dilutive?
And then really kind of, you know, what other, you know, be more specific on those areas of technology, the type of companies you're looking at, and like, what the funnel looks like for you.
Yeah. Again, I'll start, and Brendan may want to jump in. I mean, clearly, as we're a larger company now, 1%-2% represents, as I said, those bigger pools. We do think there are opportunities out there to build the company on an M&A basis with those bigger pools. Now, it might be that we do, you know, two or three acquisitions annually to get to that 1%-2%. But we do believe there's a... Certainly, as I said, we, you know, we'll talk about it a bit more this afternoon. We do believe there's opportunity there, and there are companies there in the lab space, certainly in the site space, to actually leverage more what we have in that Accellacare ecosystem.
As I said, we're still slightly less than 10% of our patients recruited through our Accellacare ecosystem. I'd like that to be 30. So there's significant, I think, opportunity to uptick. In terms of technology, Luke, you know, we will look at technology-type companies, but my view is, and I think this, you know, is shared by our board, is that we want to be a services company that effectively implements technology rather than a technology company that sort of dances around services. We are a doing company, an executing company, a company that gets trials done, and we use the technology to apply to the trials to make us more efficient. I think that's an important distinction as we look at what sort of companies we may bring into the organization.
I don't rule out acquiring technology companies, but it's probably not a focus. We, and Tom will talk again, again about this later this afternoon, most of the really effective technology we've brought to our clinical trials has been homegrown, has been implemented ourselves: the One Search, the Cassandra, the ICONIK, and that's probably the way we'll continue to go on, on that track. You want to jump in?
Yeah, no, I think I'd add to that just a little bit in terms of, you know, what we've seen from technology usage and from independent technology companies that are in our space is that oftentimes they bring very small parts of the solution to the overall piece. We've made reference to that phrase a couple of times today, ecosystem. It's not about one technology solution that's going to move the dial for the customer. It's about the integration of that technology platform into the holistic service organization. That's what's going to move the dial, and that's really what we're focused on in terms of our blending of technology and M&A to make sure that happens.
Tom, do you want to just jump in on the technology side?
Yeah. The other point I'd make there is to remember that our ultimate deliverable is data and information in order to get the drug or device into the market. And so we have the understanding of what the regulator wants. We have done this thousands of times, and so where we see the opportunity for technology to enhance our ability to do that, to shorten the time to do it in a more feature-rich way, we'll look at that. But to date, we've been very successful in developing those capabilities internally, really focused around the delivery of data to the regulator to consider for approval of the drug or device.
Great.
Thank you. Jailendra Singh, Truist Securities. So double-clicking on the previous question, I want to ask about your real-world evidence capabilities, RWE. What kind of opportunities are you seeing there? Is there any way you can share size and growth expectation for that piece of the business? And do you need M&A to really take the advantage of growth opportunities there, or you think you have existing infrastructure to scale up that business?
Yeah, I mean, again, I'll start, and then Ute might jump in on that one more specifically. I mean, we see real-world as a significant opportunity going forward. And I'd say I think we think we're in the top three in that space. But I think there's an opportunity, particularly as we go forward, we're talking about obesity, diabetes, and some of these GLP-1s, that market is going to be, I think, growing probably faster than the phase II, phase III market in the longer term. So we see great opportunity there, and inevitably, it's an area where M&A would be part of our strategy to increase our market share and to increase our position in that market. Ute, would you like to jump in?
Yeah, and also adding some of the technology that we talked about, right? We talked about the opportunity to tokenize patient, to create additional patient safety data, and you can start doing that much earlier on in the process. So another possibility to accelerate the time to market as well.
Thanks. Good morning, Eric Coldwell with Baird. You, you mentioned in the, the Q&A here that Accellacare is about 10% of your patients. What % of the sites is it that you work with globally in a given year? It's what, 100-ish sites, give or take?
It's around 125 sites.
Yeah.
Yeah, it's. Put it this way: It's disproportionately greater on the patient side than it is on the site side. So we work with. I want to talk about 15,000 sites on a regular basis and on a sort of ongoing basis. Some obviously do more than others, but our Accellacare sites are a disproportionate influence or increase, you know, a number of our patients. They recruited about 60% faster. We have many more patients at those Accellacare sites, but the opportunity, as I talked about, is to expand that and to make that more of our offering.
We've seen you and your two largest competitors have all made moves here over the last decade. Seems like the competitive environment for deals in that space may be heating up a bit, that there's more interest out there, sponsors and also competitors.
I think that's fair to say, Eric. Yeah, I think we've seen private equity in that space bringing together, you know, clumping together groups of sites. Perhaps Simon might go comment on that in a moment. Well, you know, the cynical part of me would say that some of those site networks are just site networks clumped together without a lot of value add, and we're very conscious of that as we evaluate that space. We want site networks that really do bring, you know, incremental performance to us, not just the same old, same old. Simon, do you want to-
And-
Yeah.
Simon, first, just if I can jump in, it'll be for you. You're primarily U.S.-based with the site network today, I believe. I don't think you've done-
No, we've-
-large-
We did one deal in Europe, but, you know-
In terms of total sites-
It's sites
... it's equal?
No, no, it's not equal. What are we, what are we about? About two-thirds to one-third, three, three-quarter?
Yeah.
Certainly, the U.S. focus is the predominant group from our perspective.
So, is it a geographic focus if you find opportunities, or is it more therapeutic centric?
I would, I would say, Eric, it's probably... and Steve, it's probably more therapeutic, right?
Yeah.
Obviously, there's a number of site networks out there. The general ones were more focused on areas where they're harder to recruit patients, generally speaking. So that would tend to lead itself to more therapeutic focus than just geographic.
How much did that increase your TAM? You talk about the clinical trial market TAM, but I'm not sure that included the investigator side of the market. This opens up the whole SMO TAM for you.
That's a good question. I'm not sure. I can't put a number on that specifically, Eric, but it's, you know, it's reasonably substantial. And so do we have a number on the TAM from a site point of view? I don't have it. I'm not able to give you specifically on that one.
We don't include it specifically, Eric, because obviously things change a bit, right? When we take ownership of a site, they obviously do a lot of work with a multitude of CROs. That's not always in our best interest. We want to use it as a differentiator, of course, for ICON, so we want to give a preference, right, toward ICON. So it's... You know, I think it's a little bit difficult to say that's, you know, to size that into the total market opportunity for us as we see that today, because it does shift a bit under our ownership.
The other thing I'd add, Eric, is it's not just about M&A, right? So if you look at areas like oncology through our Accellacare network, it's partly about collaboration, finding the right networks to work with, right? So it's a combination of M&A, but also collaboration will be important.
Okay, Max.
Max Smock, William Blair. Thanks for taking my question. Just a quick one for me on obesity. It feels like you've talked a lot about it today. You had a nod last quarter, I think, in terms of your client tokenization offering and the impact that that's having in that space. And then the stat today, about 20%-30% of your network being used for obesity. In light of all that, just wondering if there's any detail you can provide around how big of an area this has become for you as a percentage of revenue, and then how you think about your opportunity and that market rate going forward.
Yeah, I would say in terms of our, the percentage of, the obesity in our clinical trial operations, it's, it's still relatively modest. I mean, the Accellacare site work is, is well ahead on, on that front at the moment. However, we're, we're increasingly seeing opportunities and RFPs coming through, but it's. I think we're yet to see that, that wave break. It's, it's more, I think, of a forward thinking and a forward opportunity from a clinical trial as, as we have new generations, new formulations, new, new, opportunities come through in the obesity space. So, yeah, it's relatively modest at this stage. Barry, I don't know if you see anything different or, or Chris, within your group?
No, I, I would totally agree. I think some of the more recent additions to the customer stable have a larger exposure to some of those GLP-1s and associated compounds. So certainly something we're looking to more in the future. And I guess I would point out the need for efficiency, particularly in that space. We're talking about high enrolling trials that tend to enroll quite quickly and at scale. Therefore, the need to get efficiencies right up front is something that you do a lot of careful planning with, as you enter into those, partnerships. But Chris?
Yep. No, I would agree entirely. It's more of an opportunity as we move forward.
Yeah. Barry, maybe just following up on that point about some of your new customers, like, having more exposure to that GLP-1 space. Have they been there over the last couple of years, or are these customers that are more kind of just now moving into that space?
I don't want to be too specific around the customer base in this area. I mean, this is a space that's evolving relatively rapidly across the market, so I guess we're probably as exposed to both ends of that market.
Appreciate it. Had to try.
It's more the former, I mean, I'll be honest, it's more the former, Max. You know, we're seeing-
Thank you
... established companies in that space who are looking to, you know, to outsource in different ways. So this is part of an increased penetration. Back to Dave's question, we're seeing established partners who are established in that therapy, who need to find ways to, you know, to develop their pipelines, and they have a lot of money to spend in that space at the moment.
Hey, Patrick Donnelly from Citi. Steve, maybe just on kind of the market growth rate, you know, it seems like your confidence has been building this year. You know, January was maybe a little softer, and then obviously, 1Q, the bookings trends were really strong. I guess today, to have the confidence that you have, I mean, is it just based on what you're seeing on the RFP flow, the bookings still? You know, are you still feeling good about that 1 to 5+ trend here in the near term? And then Brendan, quickly, just on the burn rate, given oncology is becoming a bigger and bigger piece of the pie, when you think about that long-term growth rate, how are you thinking about the burn as we go forward?
Yeah, Patrick, I think our confidence on the, you know, on the business development going forward and the, and the new business awards is based on a couple of things. RFPs, we've talked about, and we've been in a pretty good place on RFPs, both in the large pharma and the biotech space over the last several quarters. We came out of last year with a little caution, given where the biotech funding was, but as we've seen the first quarter come through, and that being a, you know, a very positive, constructive environment, certainly it looks like things are moving in the right direction, and that's given us additional confidence as well. Now, one quarter, as I've said, I don't think you'd sort of declare victory on one quarter, but the indications are positive.
Also, I think in terms of, and I'll ask Chris to comment in a moment, conversations that we've had, and it's a little anecdotal, but conversations we've had with biotechs. I was at a large biotech meeting in Florida last week, and you know, the level of confidence that we're seeing that our customers have around funding and getting funding, and their ability to raise money in the marketplace, you know, is as good as I've seen it, certainly in the last 12, 18 months or so. So that's also giving us some confidence. Do you want to comment?
Yeah. No, I mean, exactly the same. I, you know, I've been at similar conferences, and, you know, a lot of our customers are, and, you know, also talking to investors. I think the money is there, for the good science. There's a lot of good science out there, and I think, you know, a lot of this is around sentiment and, and belief. Everything has started very strongly in the first quarter. We've seen that surge in funding, and, you know, as Steve was saying earlier, we'll now look for that surge in RFPs and then ultimately in the spending, you know, perhaps towards the end of the year.
You know, with that additional RFPs, I also talked a little bit about some of the activities that we've undertaken around the sort of branding and the increased awareness of ICON Biotech, and, you know, that I think is going to allow us to sort of maintain a good win rate as well. So-
I might just actually pick up on the conversion burn rate part of the question as well. In terms of our mix of business now, what we've seen in the course of certainly this year, and we've been in the kind of low 9s, you know, ballpark, you know, 9.1-9.2, that kind of ballpark. We feel that we're very much back to a normalized mix of revenue that's coming into that from the different therapeutic areas. So, as you guys know, oncology makes up about 40% of the marketplace, and it's not far off that in our backlog as well. So, we feel that that's now normalized.
As we think about the projections as we go forward for the next couple of years, we're still very, you know, confident about being able to maintain that level of conversion. So still in that 9%-9.5% range. We feel that some of the initiatives, specifically around some of the elements that Rose spoke about earlier on, around our combination of what we're doing at sites, will allow us to be able to really kind of, you know, start faster and maintain that burn rate. So that's our position on that one, 9%-9.5%.
Thanks.
Thanks. Michael Ryskin, Bank of America. You talked through the LRP and the bridge there, and you know, the underlying market growth, M&A, but then you also had the share gains you called out 1%-2%. I think in the prior guide, it was a 1%-3% contribution, so just a little bit of a tweak there. Is that more reflective of, you know, some of your competitors are starting to get a little bit more organized? There was a lot of disruption in the industry in the last couple of years in terms of assets changing hands. So that's question one, is sort of what's the tweak there? And then second part of that is just where do you feel like you're still able to take the most share? Is it on the biotech side?
Is it some of the Accellacare and things like that? Just talk through where you feel you still are superior to the industry.
Yeah, I think, again, I'll ask the guys to comment in a moment. But, you know, I think we see the share gains coming across the industry, both in large pharma, and I think we've made some really nice progress on that in the last couple of years. Clearly, I think we've got some opportunity, maybe more opportunity in the biotech space, but I don't, you know, I don't take one or the other. I think we can work and improve share in both. Like, you know, the competitors that we're against, they're all solid competitors, and we want to have solid competitors in our business. I think it doesn't help our industry if companies don't deliver essentially. Of course, we want to deliver 20% better than they do. That's our sort of focus.
And so we don't think too much about the competitors and the when we talk about gaining share. I think we have an opportunity to gain. We've talked a bit, I think, in the past about the top three, and we know who they are, we're one of them, sort of moving away a little bit from the rest, from the others, from the next sort of four to six or so, and then there's the rest. So I think we can take share from that sort of mid-tier group. I think that's clearly an opportunity for us. And of course, we'll always have a battle with the smaller companies. That's always a traditional ongoing battle. So I do think, though, that biotechs, again, are becoming more aware that organizations or companies like us-...
You know, do have the financial, you know, technology, the financial savvy, stability, scale, and technology to apply. And where we put our biotech, when we get our mind together, and as Chris has outlined on our biotech value proposition, I think it's gonna be very powerful. So I think we can really move that up and take, you know, take some away, take some share away from those smaller companies. The top two or three we'll be continuing to battle with, and we respect those companies as good competitors. But I also think there's opportunities for us, more on a project-by-project or program-by-program basis. But it really, I think, around the sort of mid-tier and smaller companies where we think we can take, we can take share. Do you guys wanna-
Yeah, I mean, just to add to that, Steve, I mean, it, it's entirely correct. I think, you know, in the past, if you look 10 years ago, a biotech might want to work with a smaller sort of boutique CRO for their U.S.-only study or whatever it might be. But, you know, what they were looking for there was just the white glove treatment, the attention to ensure that they don't get lost within a larger organization. I think there's a trend and a real drive for more complex therapeutics, more complex sort of trial designs. The need because, you know, as we segment populations, the need to go more widely than just the U.S.
And that's where I think, you know, we at ICON Biotech really come into our own with that. You know, we've got the scale, we've got the global footprint, but we have the experience, and we have 8,000 people. And within that 8,000 people, we're more likely to find individuals with the specific experience that's required. So yeah, definitely a good opportunity for us.
Thanks. Jack Meehan, Nephron Research. Brendan, I had a final test for you here. Just wanted to clarify on the EPS, CAGR you laid out, low to mid-teens. Should we be thinking 13%-16%? And I know it's May of 2024, you're not giving 2025 guidance at this point, but just as like the debt, interest expense phasing coming down, do you think you can actually be above that range next year? Thanks.
On the mid, last time I checked, mid was around 15. But, you know-
Sixteen still.
If... Yeah, well, you know, we, you know. Listen, it's a really good performance either way, and we'll be happy. And listen, if we can push it on, we will. You know, I mean, we set numbers, as you guys know, that we feel are clearly achievable, and if we can outperform them, we will. We absolutely will. So that, that's very much the focus, as we go forward. Sorry, your second part of the question was around?
Just next year, is the interest expenses coming down?
Oh, yeah. No, there's definitely, there's definitely opportunity there. There's no question about that. I think that that, that race is kind of run from our perspective. I'm very comfortable with the level of interest carry that we have in the, in the P&L account at the moment, and I think the opportunity is more actually from an M&A perspective. So we may well bring the debt levels back up, depending on cash flows and timing and size of deals, which obviously will put more of an interest burden on. But we're very focused as an organization on still getting to those mid-teen EPS growth.
So what we do from a debt perspective will have to be. We'll have to see the value from that from an M&A perspective in terms of the overall EBITDA and the ability to drive the earnings growth, and that's certainly how we've thought about it and how myself and Eimear have thought about it and when we were doing the modeling for that. So that's very much the case.
I think our interest levels for next year will depend upon Chairman Powell to some extent. As you know, we've still floating, I think, Eimear, about $1 billion of our debt. It still floats, and so, you know, we've given ourselves hopefully the opportunity to benefit from falling interest rates, dare I say, cross my fingers. Let's see where the Fed goes on that, but we have certainly that opportunity going forward.
Great. Hi. Casey Woodring from J.P. Morgan. Can you talk about what's embedded from a pricing standpoint in the medium-term guide? Maybe contextualize that with what you're seeing from a competitive pricing standpoint in the market currently, given companies like Pfizer and others have been announcing cost efficiency programs, and there's been a general sense of budget tightening in the large pharma space as of late. Thanks.
Yeah. I mean, it's public knowledge that a number of larger companies have been tightening their belts for various reasons, and that inevitably presents some challenges. On the other side of that, we've seen some increase in spending from some of our larger strategic customers, and so we talked, and Barry talked very eloquently about how we've been able to bring those companies on and actually increase the share of wallet there. So inevitably, in our business, some companies are watching their costs and are going through a period of some challenge. Others are moving upward and spending more upward. So, for us, you know, we look to continue to work with our partners, whether their spend is going up or down.
But obviously for us, we're looking to, you know, maximize the benefit from those who are going up. In terms of our pricing environment, and again, I'll let maybe Barry might want to comment in a moment. You know, we see it as being competitive. I was gonna... We talked about, is it fiercely competitive? I don't think it's fiercely competitive, but it's always, you know, it's either competitive or it's very competitive. I'd put it in the sort of mid-range at the moment, Casey. I don't think there's anything that's out there that's overly worrying us. We don't see any sort of predatory-type pricing from our competitors, you know, and we do see ourselves as a premium price, premium quality CRO.
And where we can, we're able to, you know, to get improved margins because we offer improved value, and that's ultimately what we're trying to do. So and where customers, and Barry gave a good example on the output, the outcomes from one of our strategic partners. We were able to show them that we could actually significantly improve the output and the outcomes, what we were spending, and they might have paid a little more on a unit basis, but they got a much better outcome. So overall, their cost of development was significantly improved. Do you wanna, Barry?
I think you nailed it. It's obviously a competitive space. It always has been. But those customers that have been most successful-
... in addressing the cost challenges they're facing, they're not making those macro moves on the basis of a couple of basis points here or a couple of basis points there on rates. It's about how effectively we can partner to operationalize the portfolio. So I don't want to say for a moment it isn't a competitive pricing environment, of course it is. But as Steve says, we're focused on being a partner that can make a much bigger impact on the bottom line for customers than we could ever seek to achieve through pricing alone, and that's where these large-scale alliances, that's where these multi-year transformational partnerships come into play. The challenge for us is to create value at a portfolio level, not necessarily to get too deep in the weeds on a particular rate, in a particular role, in a particular country.
Good afternoon. Up, not down. Good afternoon, Justin Bowers from DB, and a two-parter from me on strategic partnerships, one ICON-specific and the other part at an industry level. So Barry, I think, you know, since the merger, you've signed three more strategic partnerships. There's still, you know, four out there for the taking, but can you help give us a sense of what the opportunity for one of those partnerships is from, let's say, a revenue perspective as it reaches maturity or some targeted level of growth and over what time period that would-
Sure.
it would take to sort of reach maturity? And then the second part of that would be: How much of that informs your view of the market share gains in the long term, in the long-term guide that you just put out? And then part two, maybe one for-
Part three, I think.
Part three for Steve. Just any shifts. What's large pharma right now asking for in terms of the partnerships or what shifts are you seeing, whether it's in terms of number of parties are inviting to table or, you know, partnership consolidation or allocations and auxiliary services?
I'll try and cover as many of those components as I can remember. I think there's not a huge amount of value in me speculating as to the peak value of partnerships generally. They obviously vary. There's pushes and pulls there in terms of which functions a particular partner puts into an alliance versus another may not. So that's obviously a lot of variability there. I'll repeat what I said this morning. I think on average, we're talking about three years to hit peak or steady state, not that I ever want to call time on an alliance. These things change over time. And to the third part of your question, there's certainly been a shift, I would say. We're seeing fewer and fewer pharma with 10 big partners or five big partners, and probably fewer with 1, to be honest.
We have some sole provider relationships. Two seems to be the magic number, sometimes three. But I mentioned earlier on, fewer larger CROs and fewer larger partnerships with fewer larger pharma. That, that's certainly the trend we see.
Yeah, thanks. Charles Rhee with TD Cowen. I just wanted to follow up on a couple of the questions from earlier. First, on the site networks, particularly in oncology, given the importance of that therapeutic area, as you see more oncologists get rolled up into these larger group practices, you know, is that limiting their ability to participate in trials, and does that create challenges as you're building these site networks to be able to meet the needs for clients? Then secondly, on real-world evidence, you know, Steve, you talked about being a services company that uses technology versus being a technology company per se.
Is there still a value, though, maybe to own a data set that's proprietary to you, to be able to deliver kind of those kind of services to clients, or is it still better to find vendors to access the data from? Thank you.
Yes, I'll, I'll take the first question. Sorry, I'll take the second question first, and then, Rose, you might comment on the oncology network and how we're trying to develop that and what impact the roll-up of oncology physicians has. You know, in terms of our ability to... Sorry, I've forgotten the second question already. What was it?
Data.
Data.
Data, data. Beg your pardon. Owning data. Sorry, I beg your pardon. We've traditionally said we don't need to own data, and we don't want to own data. Now, having said that, we do own quite a bit of data through certainly through our Symphony network. Dermot can talk about that and the contribution that makes to our business. And so inevitably, we have a lot of data that we have, you know, ownership of, whether it be our CTMS data or our lab data, the various data sources that come in through Symphony, and we spend a significant amount of money on data there.
But it's not. I don't, we don't feel the need to run out and buy more data absent what we need to do for, to keep Symphony competitive and growing as a market entity. We do source data from a number of different places, and again, I'll ask Tom. Tom might comment on this, but around Citeline, around some of the EMR opportunities we have, and we... Data is a dynamic, you know, and the accuracy and the completeness of that takes quite some effort and resources to continue to, you know, to maintain. And so we are gonna, I think, continue to have an approach where we do partner and purchase, but we don't necessarily own, so it's not a focus for us to...
We want to get the best sources of data in order to drive toward the insights and the actions that change the way we run clinical trials. Again, back to being a services company that uses data and uses analytics to make sure we make the right decisions. But we're not committed, or we're not dying to run out there and buy sources of data, apart from what we do in the Symphony space. Did you want to comment on that?
Sure. Thanks, Steve. If you look at our Symphony business, it's a U.S. data business, and, I guess two parts. First, the core business, how we buy the data, and then we, you know, package it, sell it, as well as with our, you know, consulting services and tech services. So there's that side, but the second side is how we use the, the Symphony data to help, our, our pharma business find patients as well. So it's moving ahead from a core perspective, selling data, and also helping, ICON find patients better.
Yeah, we continually scan the market for what data is available, and where there is good data, we seek to leverage that. So vendors like Veradigm, Clinerion, Citeline, we incorporate that into the analysis that we do on a daily basis for the needs that we have.
Right.
Okay, we have one more question left.
This is Jack Wallace with Guggenheim Securities. Got a question about the FSP, hybrid engagements. This sounds like it's an opportunity for you to go ahead and grab incremental wallet share within your existing customer base, but is it also an opportunity to go, win those strategic relationships that you don't have? Is that something you can start off with out of the gate, or do you have to build into that sort of arrangement?
Oh, absolutely. There's no question. I think our, our scale and competence and track record, I think, as much as anything in that, in that FSP space, it's often the way we get into a customer to start with, and then we find a way to expand our services. Barry, maybe you'd like to comment a bit more.
Yeah, I think it's a really, really a question that's really on point. So when we talk about blended solutions, we tend to talk about it in two dimensions. You know, at the lower level of blending in a particular function, I talked about clinical and SSU. But if you think about it at the alliance level, I mentioned that in the last, you know, 18-24 months, we've seen a lot more of those alliances go up for refresh. And one of the key differentiators in what is sometimes called a poorly differentiated market is mastery of both poles and mastery of the middle. To be enthusiastic about identifying opportunities for value creation where the customer is, not where the CRO wants them to be, and that has been a very big play for us in the context of those alliance partnerships you mentioned.
Sorry, I wanted to come back to the, I think, question before about the oncology network that we didn't, we didn't address, so my apologies for that. But, Rose, could you address that?
Yeah. So I mean, it's true, clearly, we wanna diversify, we wanna partner more with oncology network sites. What we're seeing is it's less about the oncology not having time to do the research. It's more about us being able to resource from a study coordinator perspective, back to what I was talking about earlier this morning, easing the burden, making it easier for the investigators to take part in the research. So the support we offer through our study coordinator resource management, through our ability through patient concierge, patient retention, that really is making it attractive for us to branch out into that oncology network.
I just had a quick follow-up on the FSP question.
Sure, no problem.
You're standing between lunch and everybody, so...
I'll keep it quick. Just, Brendan, just thinking about the pushes and pulls to the gross margin line, thinking about the mix of engagements, full service, FSP, and then hybrid, the impact of, let's say, better execution, use of site networks, technology data, et cetera. And then also, if there's any meaningful variation within the pass-throughs that we've seen that have been a much larger percentage of revenue than they have historically. Thank you.
Yeah, I suppose there, there's a lot in that. I suppose it talks about, you know, all of the different elements that, you know, the push and pull factors in our gross margin profile. I suppose when we've looked at, you know, what we think will be the case for the next, you know, number of years, we still have a very large amount of confidence that both our pricing and our mixes of business will allow us to be in that 30-30.5 range that we talked about today. I think that, you know, we are being fairly consistent with our portfolio in terms of the scale, as it grows. So we don't particularly see, you know, significant, you know, outpaced growth in one area that can't be compensated by growth in a different area from a margin perspective.
I think one of the points that Barry made really well this morning was around the blending solution is not about, you know, everything comes down to the lower level. It's about bringing the service and value up, and that's captured in the margin profile as well as we think about that blending of those solutions. I think we're in an excellent place to be able to bring value to our customers from that perspective. I think that maintains our ability to, you know, continue to hit those 30%-30.5% margin profiles.
Okay, thanks. On behalf of the rest of the team and myself, I wanna thank everybody for their engagement today, here in person and on the webcast as well. This does end the webcast portion of our Investor Day today. Obviously, those of you staying on, here with us in New York, we'll start lunch, and then we'll be back in this room at 1:50. We'll start back up with showcasing some of our innovation and technology at ICON, which we're all very excited and enthusiastic about. So, thanks again, everyone, for your engagement and support. So thanks.
Before we hang up entirely, I do wanna thank Kate for putting her life and spirit into this for the last month.
Thank you.