In order to not only preserve the safety of the public, but maintain the integrity of the pharmaceutical, biotechnology, and medical device industries, obtaining regulatory approvals is a critical step in the process of bringing a new drug or medical device to market. Securing these approvals can be a complex, expensive, and time-consuming process, as it involves conducting clinical trials to demonstrate the safety and efficacy of a new therapy, along with submitting extensive documentation to regulatory agencies for review. In addition to the benefits for patients, this oversight is critical for the companies developing products, as it allows them to effectively bring new creations to market and generate revenue, while ensuring the credibility and reputation of the company and its products in the market.
For thirty years, Medpace Holdings has been helping these companies bring vital new products to market with a range of services to navigate the complex processes. As a clinical contract research organization (CRO), Medpace conducts clinical trials on behalf of its clients, helping them to develop, test, and ultimately obtain regulatory approval for new drugs, medical devices, and treatments. Its services include clinical research, regulatory affairs consulting, new drug application submissions, and medical writing, along with data management and post-marketing clinical support services. These services are designed to help clients launch new treatments more quickly and efficiently, while ensuring that they meet the highest standards of safety and effectiveness.
Over the years, Medpace has systematically added specialized medical, regulatory, and operational experts to broaden its offerings and industry-leadership position. And with an already wide-reaching global presence across the world, the company continues to expand its capabilities, particularly in Europe and Asia, to enable it to win larger global studies and projects in new therapeutic areas.
Dr. August Troendle, a noted medical doctor and scientist, began his career as a reviewer with the FDA. In 1992, Troendle saw an opportunity to offer a more innovative way to conduct clinical trials on behalf of biopharmaceutical sponsors. His vision for a company with expertise in specific therapeutic areas led to the founding of Medpace. The company capitalized on an unmet need in the life science sector with a model that combines the expertise of noted industry medical doctors with regulatory and operational professionals who provide therapeutic and regulatory expertise for the most difficult clinical studies.
While the CRO industry has grown primarily through mergers and acquisitions, Medpace has expanded through disciplined organic growth. Starting with a small group of industry physicians, the company has grown to over 4,800 associates across 41 countries, establishing laboratories and operations across the globe.
In 2016, Medpace completed its IPO, listing on the Nasdaq, and raising close to $174 million in the process. Since then it has gone on to deliver solid top-line and earnings growth each year as it expands its market share across more and more therapeutic areas.
Dr. Troendle has been the chief executive officer and chairman of the board of directors of Medpace since he founded the company in 1992. He was also the company president until last year. Before founding Medpace, he held senior roles at Sandoz (Novartis), where he was responsible for the clinical development of lipid-altering agents. While prior to that, he worked as a medical review officer at the FDA. Troendle also has extensive experience serving as a director for a diverse group of public and private companies, including Coherus BioSciences, Xenon Pharmaceuticals, LIB Therapeutics, CinCor Pharma, and CinRx Pharma.
Dr. Troendle is joined by now-president, Jesse Geiger, who started with the company in 2007 and has held several executive roles including corporate controller, CFO, and COO before succeeding Troendle as president. Prior to joining Medpace, he worked in senior roles for SENCORP and as director of capital markets for Cincinnati Bell after starting his career with Arthur Andersen. Like Troendle, Geiger has served as a director for several private companies, including LIB Therapeutics and CinRx Pharma.
Before a new drug can be commercialized, it must often undergo extensive pre-clinical and clinical testing and regulatory review to verify safety and efficacy. Medpace provides a comprehensive range of product development services for Phase I-IV clinical trials, which are separated into these distinct phases to thoroughly evaluate the product. The company generates its revenues by providing a full suite of services supporting the entire clinical development process across all major therapeutic areas, with particular strength in Oncology, Metabolic Disease, Cardiology, Central Nervous System, and Antiviral and Anti-infective areas.
Serving a well-diversified customer base that includes small- and mid-sized biopharmaceuticals, along with large pharmaceutical companies, Medpace’s global platform provides its customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge.
In addition to the company’s medical department which consists of therapeutic leads who provide strategic direction for study design and planning, train operational staff, work with primary investigators, provide medical monitoring and meet with regulatory agencies, a team of clinical trial managers leads all aspects of study execution. Other dedicated teams also cover feasibility research, trial start-up activities, patient recruitment, and clinical and risk-based monitoring. While regulatory affairs, data science, pharmacovigilance, and medical writing teams provide strategic, operational, and tactical guidance, along with study protocols, reports, and integrated submission documents. A comprehensive range of core, central, and bioanalytical laboratory services also provide everything from imaging to cardiovascular functions, standard and esoteric testing, along with sample analysis and screening services in a Good Laboratory Practice compliant setting.
Medpace also operates clinics that conduct studies in normal healthy volunteers, special populations, and patient populations over a spectrum of diseases. While a quality assurance team also provides services including regulatory training, internal audits, as well as third-party audits of critical vendors on behalf of customers.
To become one of the world’s leading clinical contract research organizations, Medpace’s strategy has focused on differentiating from competitors via a disciplined operating model that provides full-service Phase I-IV clinical development services, coupled with unrivaled therapeutic expertise. This combination results in the timely and cost-effective delivery of clinical development services for customers, making the company an end-to-end partner of choice for getting new products to market as efficiently as possible.
Medpace is unique in its scientifically-driven approach to clinical research, as it provides the advantage of early and ongoing insight and guidance from experts and key opinion leaders throughout trial design and execution. All project teams are led by medical, regulatory, and operational experts who are engaged throughout every study, providing guidance, and averting potential roadblocks by staying close to projects.
Furthermore, the built-in collaboration and efficiencies of working with a single vendor facilitate a streamlined strategy for executing even the most complex studies. Core clinical trial and administrative functions deliver an efficient and streamlined execution, while fully-integrated laboratory services, as well as a clinical pharmacology unit, provide a complete end-to-end offering.
Over its 30-year history, purposeful, organic growth has provided consistency in leadership, deep institutional experience, and incomparable efficiencies versus competitors. Over that time the company has systematically added specialized medical, regulatory, and operational experts, and refined and enhanced custom-built technologies and processes.
Now, with resources around the globe, Medpace can effectively navigate local languages, cultures, and processes to avoid delays and missteps, delivering seamless execution amid the complex landscape of global clinical development. From feasibility to patient recruitment, to study start-up, Medpace’s medical and operational specialists have country-specific expertise to deliver faster enrollment and obtain access to country-specific patient populations, while its regulatory experts can plan and coordinate each aspect of regulatory strategy and engagement.
In addition to maintaining a solid record of revenue growth year after year, Medpace has also improved its earnings to shareholders for the last eight years in a row. That trend has continued in 2022, with the revenue for its latest third quarter reaching $383.7 million, representing a year-over-year increase of almost 30%. While taking revenue for the nine months of 2022 to $1.07 billion.
Impressively, the company reported that net new business awards entering backlog increased 15.4% from the prior year to $470.9 million, up from $408 million in new business in the same reporting period last year. As a result, the company’s ending backlog as of September 30th was approximately $2.2 billion, an increase of 20.9% on 2021, for which Medpace projects that approximately $1.2 billion will convert to revenue in the next 12 months.
Looking ahead, following the strong quarterly results, the company increased its full-year revenue expectations to approximately $1.45 million, up 27% from 2021. While revenue for 2023 is forecasted in the range of $1.68 billion to $1.74 billion, with both estimates in-line with current consensus expectations. Furthermore, full-year earnings per share for 2022 are forecasted to improve by almost 48% to $7.32 per share, up from $4.95 in 2021.
Medpace competes primarily against other full-service CROs as well as services provided by in-house research and development departments of biopharmaceutical companies. Its major CRO competitors include Laboratory Corporation of America, ICON, Syneos Health, PAREXEL International, IQVIA, and numerous specialty and regional CROs. The industry remains fragmented, with several hundred smaller, narrowly focused service providers and only a small number of full-service companies with global capabilities.
Medpace believes it competes effectively, particularly due to its full-service operating model, deep therapeutic expertise, global presence, reliability, and speed-to-market. Furthermore, there are significant barriers to others becoming global providers that can offer a broad range of services and products. These include the cost and experience necessary to develop strong therapeutic areas, expertise and infrastructure to manage large global programs, and to prepare regulatory submissions in numerous jurisdictions.
In the company’s latest earnings report, CEO August Troendle noted the company has some concerns about the possible impact of a major financial downturn in 2023. Specifically, a prolonged period of depressed funding flows would eventually lead to a rapid escalation in project delays. However, the CEO also added that if such a negative outcome does not eventuate, the company’s current guidance would likely beat expectations.
Despite a cautious outlook still presenting a continuation of solid growth ahead, Medpace offers a compelling mix of a strong operating model, market leadership positioning, and seamless execution history that has brought it to where it is today.