In a conference call with Wall Street analysts last week, Parexel chief Josef von Rickenbach outlined some of the company’s recent quarterly earnings and future outlook. ClinPage has this news brief with a few financial results.

Elaborating on the press release, von Rickenbach said the dynamics in the contract research organization (CRO) industry were healthy. “The overall market conditions are favorable at this time, and demand for our services is strong,” he said. Part of the reason for the good quarterly numbers was that the company’s work on many trials proceeded faster than expected. “This resulted in a faster burn rate on certain contracts,” he said. “We are pleased with this result.”

Ougrowing Peers

He added that while the industry as a whole is growing at a percentage rate in the mid-teens, “our company is clearly growing substantially above that.”

There was a note of vindication in his remarks, partly due to more than half the company revenues coming from outside the Americas. “Unlike some of our competitors, who are only now focusing on building an international presence, this has been our focus for the last 15 years,” von Rickenbach said. But one of the not-so-minor footnotes for Wall Street was that the growth of the U.S. market is also improving and edging toward profitability.

Talking Tech

Asked which segment of the sponsor community contributed to the financial results for the end of 2007, von Rickenbach said: “We had a pretty good mix in terms of client segments. In this quarter, specifically, it was probably a little more driven by large pharmas. This is not a trend. It’s a one-off thing in this quarter. We have good traction with small companies and emerging companies as well.”

Technology, in sheer financial terms, was slightly less important during the period, with the company’s Perceptive Informatics division contributing about a tenth of revenues. But von Rickenbach hinted the company would be investing in its own offerings and might be interested in acquiring more. “Scale is important,” he said on that point. There were no other clues on what the company might buy.

Competitive Advantage?

But von Rickenbach said that one Parexel strategic emphasis is to continue to infuse its CRO offering with technology. The company’s Perceptive Informatics division has the top clinical trial management system (CTMS), called Impact, and other systems for interactive voice response (IVR) and medical imaging, which ClinPage recently addressed in this story. “We believe technology is an integral and pivotal component of our business,” he said. “We are seeing more technologies incorporated into our services overall. We are making a big effort to incorporate all those great technologies into our offerings.”

That statement is both boring and fascinating. The company’s investments in technology are not news. And yet some large CROs in Parexel’s peer group continue to wrestle with technology and on occasion regard it as a risk to top-line growth. Rightly or not, some competitors of all sizes are apprehensive about clinical trial software or worried about needing to share significant slices of project revenues with firms specializing in electronic data capture or other activities. Over the course of a year, the sheer number of different applications that one CRO may be asked to use by all of its customers is large. So some CRO wariness about technology is justified.

Of course, a few competing CROs do have their own large, experienced technology divisions. But Parexel seems to be trying to distinguish itself by combining traditional CRO activities and technology. To a greater degree than competitors, the company seems to be more explicitly staking its future on the synthesis of service and software.