BRI: Pharmaceutical Services – Annual Survey Says CRO Outlook Is Encouraging; Upgrade IQV

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Pharmaceutical Services – Annual Survey Says CRO Outlook Is Encouraging; Upgrade IQV

— David Windley, Jefferies U.S. Equity Research – Healthcare, Pharmaceutical Services 

Jefferies conducted a survey among Contract Research Organizations (CROs) and found that overall R&D spend should accelerate and that respondents increasingly prefer global CROs over smaller, private players. The results also showed an improvement in sentiment toward outsourcing as measured by satisfaction and long-term outsourcing appetite. Jefferies upgraded shares of Iqvia Holdings (IQV) in conjunction with this report, and the survey results suggest IQV has increased the sales and operational intensity of the business and focused on developing and launching integrated application platforms. The company is making traction in Orchestrated Customer Engagement (OCE) for sales and marketing, and Jefferies believes this technology-oriented business will help to drive a better multiple for shares. Jefferies EPS forecasts are above consensus estimates for 2019E and 2020E. FULL REPORT