Parexel says outsourcing trends helped company grow in 2006, will target small pharmas in 2007

By Jennifer Lanning Drey

Eugene, Ore., Sept. 11 - Parexel International Inc. said trends toward increased outsourcing helped the company achieve 13% year-over-year growth in fiscal 2006.

"We're currently operating in a favorable outsourcing market environment," said Josef von Rickenbach, the company's chief executive officer, at the Bear Stearns health care conference on Monday.

In particular, Parexel has seen large pharmaceutical companies being driven toward additional outsourcing, which the company believes is due to declining research and development productivity and an unprecedented level of patent expirations, von Rickenbach said.

In the future, Parexel plans to also target small to mid-sized companies that may be seeking opportunities to outsource development work in order to retain their intellectual properties through clinical development, von Rickenbach said.

"Penetrating the small pharma biotech space is a primary focus for us and promises a significant upside in terms of new business opportunities going forward," he said.

The company is also focused on diversifying its customer base, von Rickenbach said.

Parexel's top 20 clients now represent 49% of its total revenue, compared to 60% in fiscal 2003, he said.

"Improving our future performance in medical marketing calls for greater customer diversification," he said.

Under new management, Parexel's medical marketing business is working to develop new products and services, including internet platforms, he said.

Parexel is a Waltham, Mass.-based biopharmaceutical outsourcing company that provides contract research, medical marketing and consulting services.

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