PAREXEL International to Hire 450 Ex-GlaxoSmithKline Employees
January 7, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Boston, Mass.-based Parexel International announced late last year that it plans to hire 450 GlaxoSmithKline employees and develop its own dedicated business unit to service GSK in the U.S. The employees will primarily be research and development scientists who performed in-house drug development duties at a GSK facility in Research Triangle Park, N.C.
Overall, Parexel said it expects to have more business with big pharma in 2015, regardless of whether they face competition with one of their big clients, Pfizer . Pfizer has indicated that it has plans to add a third “alliance partner,” for CRO activities.
“Pfizer already utilizes other vendors for specialized services outside Icon and Parexel,” said Evercore ISI analyst Ross Muken in a statement. “We view it is unlikely that it proves to be a negative for either player on an absolute basis. If Pfizer adds an additional partner it is likely to be incremental to existing plans.”
Some of this revolves around an Oct. 30, 2014 earnings call reporting a soft quarter, with analysts studying Parexel’s book-to-bill, which is typically viewed as a way to determine a CRO’s partnership progress.
The book-to-bill ratio was disappointing, causing a 15 percent drop in share price. However, Parexel share prices have overall been on a climb since a low on May 2, 2014 of $43.94 per share to a high of $64.10 on Oct. 27, 2014. Currently shares are going for $57.09.
“An increase in strategic partnerships has naturally created greater volatility in this metric through the greater concentration of clients, something we’ve highlighted previously and occurred to PRXL late last year, when a 0.88x metric was followed by a strong 1.34x the next quarter,” said Citi analyst Garen Sarafian in a statement. “Further, awards outside of partnerships are cited as remaining solid, which suggests this is client specific, not broad-based.”
Much has been made of comparisons to Dublin-based Icon, one of PAREXEL’s rivals in the CRO business.
“I think it’s just normal ebbs and flows, nothing particular to be read into the relationship,” said Parexel CEO Josef von Rickenbach in a statement. “And I think if there are any changes of dynamics, they are more explained in the way I just said.” In other words, Parexel had taken in a disproportionate number of Pfizer studies that were in progress, and that a lot of those clinical studies were completed in the first half of 2014.
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