UBS 2007 Global Life Sciences Conference. September 24, 2007

Transcription

1 UBS 2007 Global Life Sciences Conference September 24, 2007

2 Safe Harbor This presentation contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding future results and events, including, without limitation, statements regarding the Company s existing capital resources and future cash flows from operations, and statements regarding expected financial results, future growth and customer demand. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects", "intends", "appears", estimates, projects and similar expressions are intended to identify forward-looking statements. These statements involve a number of risks and uncertainties. The Company's actual future results may differ significantly from the results discussed in the forward-looking statements contained in this presentation. Important factors that might cause such a difference include, but are not limited to, risks associated with: actual operating performance; actual expense savings and other operating improvements resulting from recent restructurings; the loss, modification, or delay of contracts; the Company's dependence on certain industries and clients; the Company's ability to win new business, manage growth and costs, and attract and retain employees; the Company's ability to complete additional acquisitions and to integrate newly acquired businesses or enter into new lines of business; government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry; competition within the biopharmaceutical services industry; the potential for significant liability to clients and third parties; the potential adverse impact of health care reform; and the effects of exchange rate fluctuations and other international economic, political, and other risks. Such factors and others are discussed more fully in the section entitled Risk Factors of the Company s Annual Report on Form 10-K for the quarter and Fiscal Year ended June 30, 2007 as filed with the SEC on August 27, The forward-looking statements included in this presentation represent the Company s estimates as of the date of this presentation. The Company specifically disclaims any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing the Company s estimates or views as of any date subsequent to the date of this presentation. This presentation includes references to non-gaap financial measures. These non-gaap measures are not prepared in accordance with generally accepted accounting principles. Pro forma information is not meant to be considered superior to or a substitute for the Company s results of operations prepared in accordance with GAAP. A reconciliation of the non-gaap financial measures to the most directly comparable GAAP measures is available on certain slides of this presentation.

3 Why Invest in PAREXEL Positioned in large, growing bio/pharmaceutical outsourcing market $14B market growing at 13% annually PAREXEL s strengths play to current market dynamics globalization of trials, growth in biotech and more late-stage trials 25 year record of revenue growth executing plan to improve margins, accelerate earnings growth

4 Why Invest in PAREXEL Results are Pointing in the Right Direction Significant Potential For Margin Expansion Revenue Operating Backlog ($M) margin* ($M) $615 up 21% $ % 7.8% $1,094 up 38% $1, Fiscal year ended June * 2006 OM Pro forma results which exclude $.9 million in special or restructuring reserve charges or adjustments

5 Agenda 1. Well-positioned in growing outsourcing market 2. Leveraging key strengths 3. Clear near-term focus and long-term strategy

6 PAREXEL at a Glance; Strength in Numbers Ranking as global clinical research services company Top 3 Client base of global pharmaceutical clients Includes 29 of top 30* Client base of global biotechnology clients Includes 10 of top 10* Number of employees >6, offices in 43 countries *As ranked by revenue

7 WHAT WE DO PAREXEL Drug Development Worldwide Pre-clinical Clinical Development Phases I-IV Approval Market PAREXEL PAREXEL enables drug development Faster Lower cost Lower risk

8 Three Synergistic Business Segments PAREXEL Clinical Research Services (CRS) PAREXEL Consulting & MedCom Services (PCMS) Perceptive Informatics Inc. (PII) ~74% of revenue Entire spectrum of clinical development services ~16% of revenue Product development & medical communications expertise ~10% of revenue Leading-edge technology to support drug development

9 Therapeutic Expertise a Key Differentiator Coverage includes: CRS Oncology Pulmonology Cardiology Anti-viral / anti-infectives Neurology / CNS Musculoskeletal Hematology Genitourinary

10 PCMS Provides Value Added Services Drug development and marketing strategy PCMS Regulatory affairs Compliance Risk management Reimbursement assistance Targeted communications PCM

11 The Only Player With Dedicated Technology Division PII A Few of Our Leading-Edge Technologies Clinical Trial Management Systems (CTMS) Medical Imaging IVRS/IWRS Call Center Technology Integration Services Perceptive Informatics Decreases time and cost Increases quality, efficiency

12 A Closer Look at Our Flagship CTMS World s most widely used CTMS over 25,000 end-users Capabilities: plan studies track progress monitor costs track supplies

13 Positioned in Large, Growing Market 2006E Global Drug Development Spending Growth in Drug Development Spending 2006E-10E Total $73B Outsourced 11% 13% $16B In-house Growth in total development spending Growth in outsourced spending Big pharma under pressure accelerated outsourcing Source: Goldman Sachs January 2007

14 Agenda 1. Well-positioned in growing outsourcing market 2. Leveraging key strengths 3. Clear near-term focus and long-term strategy

15 Key Market Trends Play to Our Strengths Key Trends 1. Globalization of clinical trials 2. Growth in biotech/small pharma sector Play to our strengths PAREXEL 3. Growth in late-stage development/launch spending

16 TREND #1: GLOBALIZATION PAREXEL: Best Positioned for Globalization Factors Driving Globalization of Clinical Trials Our Strength Most Global Player Percent of revenue outside Americas Access to patients outside U.S. Satisfy regulatory requirements in multiple jurisdictions Concurrent launch in major healthcare markets PRXL KNDL ICLR PRAI CVD PPDI 66% 50% 48% 46% 37% 33%

17 TREND #1: GLOBALIZATION Our Global Footprint A Key Competitive Advantage Serving clients through 56 locations in 43 countries Globally integrated projects Efficient and rapid patient recruitment for challenging clinical trials Capacity to shift activities to lowest-cost locations

18 TREND #2: BIOTECH/SMALL PHARMA Biotech/Small Pharma Playing Larger Role Own 50% of Intellectual Property* Factors Driving Biotech/Small Pharma Growth Growth in financing biotech/small pharma sector More biotech/small pharma co s keeping IP through clinical development Limited infrastructure Our Strengths Broad, deep clinical, consulting, technology marketing offering Sales teams focused on biotech/small pharma ~ 50% of new business wins from biotech/small pharma *Frost & Sullivan 2006

19 TREND #3: GROWTH IN LATE STAGE DEVELOPMENT/LAUNCH Late-Stage R&D Gaining in Importance Wave of compounds progressing along the continuum - approaching our sweetspot Discovery Pre- Clinical Phase I Phase II Phase III Product Launch/ Marketing/ Phase IV Peak Sales Research Development Post-Approval Sweetspot Large, resource intensive trials Ph III/IV trials can involve 1,000 3,000 patients

20 Agenda 1. Well-positioned in growing outsourcing market 2. Leveraging key strengths 3. Clear near-term focus and long-term strategy

21 Near-Term Focus: Executing on Our Priorities 3. Selective acquisitions 2. Improve margins 1. Improve effectiveness of sales force

22 FOCUS #1: SALES Improving Effectiveness of Sales Force Initiatives including: New sales leadership New incentive plans Results showing: June 30 backlog $1.5B up almost 38% year-over-year

23 FOCUS #2: IMPROVE MARGINS Better Leverage U.S. Operations Recapture U.S. marketshare Results: Year-Over-Year % Increase in U.S. Revenues 25.1% 23.5% 23.9% 16.0% 13.3% 17.1% -2.9% -0.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 06 FY 07

24 FOCUS #2: IMPROVE MARGINS Other Margin Initiatives Enhance profitability of Perceptive Informatics Medical Communications new products and services Migrate certain activities to low cost locations Results starting to show: Operating Margin % 7.8% 6.6% 5.0% FY 05 FY 06 FY 07 FY 08 Forecast * Pro forma results which exclude $27.5 million in special/restructuring/impairment charges and non-recurring expenses ** Pro forma results which exclude $.9 million in special or restructuring reserve charges or adjustments

25 FOCUS #3: ACQUISITIONS Selective Acquisitions Must enhance competitive position Examples: 1. Strengthen global footprint 2. Bring complementary technology or deepen expertise in core service areas

26 FOCUS #3: ACQUISITIONS California Clinical Trials A Perfect Fit West coast provider of specialty Phase I-IV clinical research services Added 35 clinical pharmacology beds to network Purchase price $65M Advantages PAREXEL is now one of largest global Phase I providers expanded West coast footprint new expertise in ethnobridging studies expanded expertise in CNS and sleep studies

27 FY 2008 Outlook (ending 6/30/08) Continued strong revenue growth Steady improvement in margins Double-digit percentage growth in EPS

28 OUR LONGER TERM FOCUS Continue to Enhance Strategic Differentiators Global footprint Unmatched expertise + Powerful strategic differentiators + Leading-edge technology

29 Why Invest in PAREXEL Positioned in large, growing bio/pharmaceutical outsourcing market $14B market growing at 13% annually Market dynamics play to PAREXEL s strengths globalization of trials, growth in biotech and more late stage trials 25 year record of revenue growth executing plan to improve margins, accelerate earnings growth