ICON Public Limited Company (ICLR) Earnings Call Transcript & Summary

Good morning. This is Dan Brennan. I'm UBS' Pharma Services, Tools and Diagnostics analyst. Welcome to Day 3 of the UBS Global Healthcare Conference. Really pleased to be joined with me here virtually on stage with the senior management team of ICON. We have Brendan Brennan, Chief Financial Officer; and Jonathan Curtin, VP, Corporate Finance and IR. So gentlemen, thanks, and welcome.

Thanks, Don. It's a pleasure to be here, even if only virtually.

Excellent. Well, yes, so the quarter wasn't too long ago, but I think there will be a really nice conversation here about -- certainly I'll focus a bit on the near term, just to get a flavor for what if anything has changed as the dynamic with COVID is kind of a really real-time evolving event and then we'll focus on some of the bigger picture longer-term issues.

So maybe I thought to kick it off. Certainly, I think this is a question that I'm sure comes up frequently, but in terms of the percentage of sites that are being impacted that you offered and some of your peers offered or really all your peers offered at the first quarter call, I think that's probably a good barometer to see how COVID impact is changing. So I think at Q1, you discussed 65% to 70% of the sites, I think are being impacted, and you gave kind of a trend line as we head towards year-end, how that plays out. Maybe just an update, if you will, like have things really begun to change? Like are they changing in line with how you expected? Any flavor geographically for how that's evolving?

Sure, Dan. Yes, I think on the call, we did kind of specify that about 2/3 or about 66% of our sites were physically closed towards doing on-site monitoring. And of course, that doesn't mean they're closed entirely -- in entirety. They were -- obviously, we're doing a lot of remote work on about 2/3 -- or about 2/3 if you like of our sites. And so we've seen that progress nicely over time. And I think that's probably up over 70% now. But in terms of those sites reopening for normal business, if we like, yes, I think, well, the way we've looked at it is not substantially changed, if you like. We had modeled in our thinking that would probably be about 2/3 of an impact over the second quarter when we spoke on our Q1 call falling to maybe somewhere in the ballpark of 20% impacted in Q3 and then with little impact in Q4, let's say, although probably normal revenue -- year-over-year revenue growth returning maybe in early 2021. From I suppose on the update on where that is standing today, I think, yes, generally, what we're seeing is, as you would expect, positive traction. We've seen, obviously, Western Europe in the last couple of weeks really starting to open up. And North America is opening up at different speeds in different states. But generally, across the board, we're seeing a return to something like normal activity. And that's certainly been a positive. I think the other thing to say is while it is true is that they are relatively newer in terms of they're getting back to normal. What we have seen more broadly is kind of an opening up from east to west. China is pretty much back up and running as we would expect maybe at 100% capacity and a diversity of sites at this stage as are a lot of other Southeastern territories, Southeast Asian territories. We've even seen in Eastern Europe, which wasn't as negatively impacted by COVID as Western Europe was, quite close to normality in that territory at the moment. And of course, as we say, we've seen a lot of tentative early steps towards returning to real site monitoring in clinical -- in Western Europe and in the United States as well. So I think the generally, the tone is positive. I think April and May, we still see as being broadly impacted as probably the [indiscernible] point of this crisis as being the most impacted months. Certainly, the April was, and the first half of May has been, although we are seeing now light and expecting that continue opening up to have a positive effect upon June continuing significantly into Q3 and on the expectations, certainly, that there won't be any significant second wave that will impact for rolling closures, I suppose, in different countries. Into Q4, our expectation is returning to normality from here on in. So certainly, light at the end of the tunnel, moving in the right direction, very much an east to west process as we've seen it over the last couple of weeks.

Great. Thanks, Brendan. And would you say that as things opens up, it may be a bit ahead of how you guys have guided, but we'll see how it plays out. And obviously, you probably made some cushion in there. Is it -- do you think the countries and the states are kind of moving faster than maybe you expected? Or is it the pharma customers are coming back a bit faster? Or are you having more success at the sites? Or is it a little bit of everything that would contribute [Technical Difficulty]?

Yes. I think what we have seen, Dan, is certainly our pharma partners really starting to get back on the horse, if you like, in terms of really wanting to revamp their monitoring processes and site processes. So we've seen that significantly. And I think their first order of business is trying to get their existing portfolio of business back to normal. I think that's certainly a big piece and maybe the second priority they have is obviously if they are themselves involved in a COVID vaccine or treatment, they're obviously super interested in getting those projects ramped and up to scale. And obviously, have a reason to race to winter really to try to get a vaccine or additional treatments out on to the markets. So definitely, that's their major areas of concern. But certainly, we've seen in the last couple of weeks, certainly positive signs from our pharma partners in that regard. And as states -- different states around the world are dealing with this very, very differently, as we know. But in most countries, I think there's very, very few as we look across, I suppose, we color code nearly every territory we're in now, and we say, they're either semi open, open or still in lockdown. There are very few of those kind of red lockdown areas left on the global map at this stage. So definitely, that's pointing in the right direction from that perspective. I suppose besides, so the last piece of the puzzle, if you like, in terms of what's going to help us get back to normality or something, let's call it the new normal, I think that will be managed and certainly, we will be working with our sites to ensure that there is a good revamp of trials. Some of the trials, of course, as we've mentioned before, are not hugely impacted. I mean, if you're on an oncology trial, the monitoring has been remote certainly for the last couple of weeks, but we wouldn't see there any kind of issues in terms of getting those patients back in the normal course. These are very serious diseases and we need to continue to focus on making sure those clinical trials are ongoing, and that's -- the site's interest is huge in that obviously as well. So they're very keen to get back up and running. And on some of the smaller -- where it's more discretional for the patient, where the complaints maybe isn't as life-threatening, there is -- it will take a little while, I think, for people to get comfortable with coming back to hospital and doctor sites. And that's something we're going to be watching very, very carefully as we go through the summer to make sure that the actual patients themselves are returning to visits and that the trial conduct is allowed to continue in the normal course. So there are some of the elements that we're working at. I think positive is really right across the board, but summary is a focus to still remain particularly around sites and patients and making sure that they do ramp back as we expect.

Great. Thank you, Brendan. And I forgot to mention, for those who are on the webcast or on the call, if you want to pose a question, I think there's a spot on the webcast to do so. I have it open, so I would see that. So feel free to pose that now. Happy to try to get that asked. So we did a bunch of calls with like some site, like some private site networks and this is a question you get as well, but in term the ability to, as you get back up and running to make up for what was delayed. I guess, there is -- how quickly can you really accelerate trials. Is there a slack in the system? You need patients, you need monitors. You need -- there's a lot of issues why maybe that prevent you from catching up. But I'm just wondering, could you speak to that level? Maybe we're underestimating. I mean, we spoke to one expect who felt there is an ability to catch up. So how -- like what have you assumed? I know you pulled your full year guidance, but you did give some pacing expectations? What have you assumed in the ability to catch up for what was delayed during this period? And what are the factors that kind of underpin that?

Yes. I think what we see is, certainly, if you look at it from an overall revenue perspective, and I think you do have to do it from that perspective, what we would look to do, obviously, is to really make sure that ongoing trials are revamped appropriately over the next couple of weeks this last month and ensure that really the kind of -- trials that are in maintenance phase or in start-up, get back on track. And I think that will be the focus of our pharma partners in terms of sequential revenue growth would be substantial, albeit it will probably just be returning to something that looks a bit more like normal as we get back to the fourth quarter of this year in terms of the run rate from where we were in Q1. So I think really, what this -- the end of this year is around how much of those existing trials that were in maintenance stage, can we catch up to your point on in terms of the activity, and I think there is some ability to do that. I think it's also fair to say, as you look across the portfolio, the mix of work is obviously, there has been a kind of this period of quiet for effectively new clinical trials haven't started for the best part of nearly a quarter at this stage. It's getting those ramps faster that would probably be difficult. For example, is there anything different about that allows them to be faster in the recruitment of a complicated oncology trial now with comorbidities, but that's different now than it would have been before the COVID pandemic. The quick answer is no. So those are going to take a bit of time. And I think as a consequence of that, you're going to probably see more of a sequential impact to the overall book of business. While you can catch up on some studies and kind of get back to maintenance there, maybe that just fills some of the gap of some of the start-up work that should have been ongoing for the last quarter and obviously has been delayed. The speed of start-up is probably one of the areas that, as an industry, is one of the biggest time consumers in terms of patient recruitment. So that's one where we constantly are looking at ingenious and different and new ways to data or sites or site partnership or collaborating with data partners to ensure that we're doing that efficiently but the speed to that piece would the piece that would be difficult to significantly speed up. So I think, yes, the ability to catch up to some extend on ongoing trials in terms of the overall book of business I think it's again how we would see it is trying to normalize the book before the end of this year Q4 would maybe returning to something that looks more like normal year-over-year growth, probably more like in Q1 2021.

And kind of when you take a big picture view with what's going on with COVID like as we get into 2021, obviously, we'll see how this plays out in the back half of the year. I mean folks expect there'll be a vaccine, so I imagine COVID normalizes. But do you feel like the industry is in a better position, given that maybe the value of kind of R&D, of kind of clinical trials, maybe that's been -- the perception has gone up, maybe there's more dollars being put at it and then we'll get to the whole virtual remote monitoring in a minute in terms of what impact that has. But just from an aggregate dollar basis, do you feel like we'll be in a better position as you look out like say like '21, '22 than we were previously?

It's a great question, Dan. And I think it's an interesting one from the perspective of has the speed of pharma companies be -- and I think it really much depends upon the ability to develop a successful vaccine about how efficient or productive our additional investment might come in to this industry over the next couple of years. I think people certainly in how I've been dealing with or perceiving it are not seeing or certainly seeing the pharma industry and the drug development industry has a much more -- in a much more positive light, obviously, over the last couple of months. And I think all that you have to do is look at your Facebook account, your LinkedIn account and you're seeing the positive stories about any of the drugs that are in development here. And people really need that now, and that's changed their mindset about it. So it's an interesting point around from an investment curve perspective as well, whether this is perceived as a better bet in terms of safety and economic efficiency as we go forward. So that's an interesting point. I would hope certainly that it will have a positive impact upon how investors make decisions. And overall, a perception in the broader world, if you'd like, of the great work that we do in drug development. So I'd hope that certainly is something that will have a positive impact on 2021 and 2022. But I think to the point I made at the beginning, it will very much depend on our ability to produce vaccines in mass scale that will have a significant impact on people's health.

Okay. And then maybe talking about remote and then virtual, but remote, in particular. So I think you said at the onset, roughly of the sites that were impacted, I think, roughly 2/3 were remote monitoring. So is that getting better as we sit here today? And then I definitely want to think through what the impact is from a dollar basis, both from revenues and profitability to the extent remote monitoring becomes more of the norm going forward. So maybe you can address the first question tactically, and then we can get into the second part more structurally.

Yes. No, absolutely. So yes, as I said, I think we said 2/3 of our sites, we're close to physical monitoring. Of that 2/3, a further 2/3 could engage in remote monitoring. Certainly, we've seen that increase to over 70% now. And depending on the level of data access we can have at those sites, they can be more efficient or less efficient. And generally, we would see a remote monitoring visit being probably worth about 50% of physical visit. That's in situations where you don't have absolute access to the source data that you're verifying. So if you -- I mean, you'll have some access, but if you could have actually access -- direct access to the systems in that particular instance, actually, the remote monitoring visit is as productive as the physical visit. So it is very interesting from that perspective about actually being able to really conduct clinical monitoring in a much more remote way as we go forward and being no less productive than we are today. And that's certainly, I think, 1 of the big learnings for us as an industry and something that ICON has been speaking about a lot when we talked about our remote monitoring and our risk-based monitoring for a long time now, it's been an area we've been pushing very hard. But I really do think this pandemic has given everybody a new sense of value, particularly to those types of monitoring. And I think that is something where we would look to have really all of our sites, if possible, certainly having some level of remote monitoring capabilities as we go forward with as much -- with as many of those really being as deep as we can get so that really we could make that remote monitoring as efficient and as valuable as a full physical monitoring visit. So it's certainly -- I think it certainly has opened the eyes of sites. I think it certainly opened the eyes of pharma companies and COOs in terms of what could be done in a more remote way as we go forward. I think very, very interesting for what it might do. I think your second part of your question was around rent revenue and margin profiles if we move more towards remote monitoring. I think there is a chance and opportunity to maybe shake up off the back of this the shape of the trial. How much monitoring is required? What kind of activity levels need to be done at site? What kind of data really needs to go through the whole SDV type process? So it is a very interesting time to ask those questions. I suppose ICON as an organization, we've always been focused on being as efficient as we possibly can for our customers. And so I suppose to some extent, we really welcome the idea of actually being doing it more remotely, questioning all of those pieces and making sure that, obviously, the structure and the product that we produce is still of good nature, but also that it can be as efficient as possible. So does that mean maybe at some point in the future, trial sizes in terms of the dollar commitment is smaller from a pharma partners perspective? Perhaps. Does it also mean if we could do these things more remotely, we could save on our cost base? Absolutely. So there could be smaller trials with higher-margin profiles as we go forward but I think, for us, the big piece will always be about being as effective and as efficient and getting as many trials done for our customers as possible. So I think we would -- we certainly would welcome that in terms of how the industry might change as a consequence of this.

I mean all else equal, is there -- so it sounds like it's more of a modest margin benefit. And obviously, it's going to take years to play out kind of the evolution, but this wouldn't be something that it could really drive a kind of more significant cost savings, presumably, CRAs are pretty expensive, all the travel costs and things like that. Just wondering if we look out like 2, 3 years, as this potentially becomes a bigger part of the industry, if this is an important margin lever for ICON?

Yes. No, it's certainly something we'll be looking at. I think this pandemic has just asked many questions of many industries. And I think that's certainly a big part of what we'll be thinking about, hey, can we do these things more remotely? I mean if you -- I know it goes much broader than that in terms of all of these office infrastructures that people hold around the world. I'm sure every company and every CFO who's worked [indiscernible] at least is probably asking themselves similar questions around infrastructures and levels of investment in infrastructures and whether it's all absolutely required. So certainly, I think it's given pause to ourselves as a CRO and to our -- the whole development, drug development industry around how much of this can be done in a much more efficient way, where we put less burden on the individual, the CRA being that talent to site, use those technology pieces more, maybe more can be done remotely, maybe can be done from a home-based environment where as it is, a lot of our CRAs travel significantly so that a lot of them are home-based in any event. But I think the infrastructure and the technology and how we change the dial on this is significant. And obviously, that has a play on impact -- significant play on impact into margins from a cost base perspective. But also, in real terms, a real efficiency perspective in terms of just the efficiency of the site, not having so many CRAs physically there on a daily basis is that a way of actually thinking and doing this in a much more efficient fashion. So I think we need to challenge not just, okay, now we can do this remotely, but actually challenge the structure of how we do, what we do. So that would be interesting to see how that plays out over time. I think you're right, though, Dan. I think this will play out over a couple of years rather than in the short term.

And they're important investments you need to make. I know you've got capabilities today, but are there -- is there a significant investment ahead to ramp up the ability to do this more holistically? And then I bet you to get just a connected question. Post that, we can follow-up on virtual event, but I'm just wondering on the remote side, what kind of -- how enabled you are today, what needs to happen?

Yes. No, it's an interesting question. I think what you -- obviously, it kind of comes back to what I was saying about, we obviously work with numerous different types of sites. Some of those sites are owned. We actually have our own infrastructure, as you well know, Dan, on the sites in North America and Western Europe. And they're obviously extraordinarily plugged into our environment, and we're operating on the same environment. So that is a quick fix in terms of a quick win in terms of having very, very connected ability to do monitoring there. Then we have kind of embedded sites as well, where we have our support staff, not CRAs, but our support -- clinical support staff at the physical hospital or doctor site and again, that's an investment in terms of people, but also they're working with the infrastructures and data systems that are there at site to ensure that we have a greater level of accessibility and data access at those sites. And then there are affiliate sites if you like, where we don't have either of those folks, we have a good relationship. And it's about working with that cohort of sites to ensure that, if you like, the data pipes are connected up as well as they can be. And that means some investment absolutely, over time, with those sites in terms of how we actually connect up those to make sure that -- it's easy as possible to remote monitoring as it can be. So then there is definitely investment from a technology perspective that's needed there. But I think we do have the head start from the perspective of having a lot of sites at this stage which are either own or we have embedded folks working at those sites, working on shared platforms. So that certainly is an area where we'll be looking to, particularly as we come out of this COVID crisis, really ramp up patient recruitment on those new trials as we start to get through that whole list of work that's waiting in the wings to really start to ramp-up in terms of patient recruitment. So that's certainly an area where we look to, as much as possible, speed up the recruitment on those trials in the first instance.

Okay. Well, before we go to virtual, since we have about a little under 20 minutes left, maybe I'll skip back to virtual so we have time at the end. But maybe just kind of switching gears more towards the environment. I was wondering, can you quantify like what have you provided in terms of the impact -- positive impact from COVID so far? How much has COVID trials contributed in 1Q? What are you seeing kind of what's baked in Q2? And any way to frame the potential benefit as we play out in 2020 and possibly early 2021?

Yes. I think it's a solid environment in terms of what we're seeing there from an RFP perspective, both COVID and non-COVID. Obviously, there's a lot of activity going on here. As we know, there are hundreds of compounds in development, whether they're treatments or vaccine candidates for COVID treatment. So -- yes, and we're very, very active in this space. I would want to kind of just caution a little bit here in terms of while there is a lot of activity here, and it will help because it's obviously -- these are vaccine trials and treatment trials, and we're all racing towards, as I said, winter to ensure that we have treatments and vaccines in place. So it will help us during these -- maybe these more fallow months of the summer period that we're going through in Qs 2 and 3, particularly, probably more so in Q3 as those times, trials really start to ramp-up in terms of patient headcounts. So I do see it as a help, although probably not substantial enough to really counteract any kind of imbalance as a result of the shutdown of sites. So it is something that's there to help but certainly won't act as an absolute counterbalance to that site shutdown and reopening process that we're going through at the moment. But we're seeing a decent amount of activity i.e. it's probably for me too soon to quantify that feet down in the real revenue terms. We do see it as an aid in terms of getting back to what we'd like to do for the full year. And of course, we'd like to give further clarity on that once we get to our Q2 earnings call to really speak to that in broader terms. We're certainly active on numerous trials across our clinical business and indeed in our lab business, where we've seen good traction in both of those areas, particularly around additional COVID work that is coming in and helping us as an organization really, really try to put some of these negative quarters behind us. But I think it still will be relatively modest. So you're probably talking in terms of overall annual revenue, certainly down in the low single digits of additional contribution from those trials. However, that said, as I said, it's moving in the right direction, and we're not -- we're certainly very, very happy and very pleased and very proud as an organization to be involved in the development of so many treatments for this type of disease.

Great. Thanks, Brendan, for that. And then just more broadly speaking, I think you had suggested no unusual cancellation in 1Q. Just any color how to think about what the demand environment looks like, like the maybe pause or hesitation that maybe still might have been occurring? Has that changed at all? What -- how should we think about kind of booking trends being either negatively impacted due to COVID or possibly even getting better now that things are starting to open back up?

Yes. I think the underlying environment has been solid. What we saw at the end of Q1, although not particularly impacted, was really just maybe the urgency of decision-making wasn't there, as you would expect, people working. That's a combination of people working on remotely, but also people knowing that their new business is not going to be into patient recruitment as quickly as they would have liked certainly as they're coming up into the end of March, as you can imagine. And what we were looking down at barrel over that stage, I think as we get now into -- closer to the end of Q2, we're certainly seeing a little more urgency in terms of decision making. Obviously, still folks are -- most folks around the world are still doing quite a lot of remote working at the moment. So it is hard to maybe do some of the meetings that would be normal in this -- the normal business development close process as we come to an end of the quarter. And as such, I think there is the possibility for some, as we saw in the end of Q1, some slippage of decision-making from Q2 into Q3. But nothing I think that fundamentally would impact on our ability to have a more relatively solid quarter of business wins. And we were pretty happy with our first quarter in dollar terms. We'd like to see something not dissimilar in dollar terms in terms of net new businesses in quarter 2. And we think that the market fundamentally is there to allow us to do that, albeit that you might see some of that slippage that we saw at the end of Q1 drift over into Q2 and certainly, that step out into Q3. But the fundamental markets and the market dynamics, the level of funding that we're seeing, the level of activity from our biotech partners, the level of overall activity that we're seeing, both in terms of our big pharma partners and obviously, a lot of this, to your point, Dan, on the additional COVID work is certainly being very positive. So I suppose, still very happy with it on fundamentally very solid market, albeit potential for a little slippage.

Right. And you kind of preempted the next question, which is an obvious and it comes up prior to the call as well, but just the state of biotech. And just wondering, have you seen, I mean, given the stock market recovery, maybe the concern 3 or 4 weeks ago about the inability for emerging biotech to get funding or if the capital markets are closed, what would be the risk on that category? Just what have you -- could you speak to kind of that category of kind of customer, these smaller biotechs? Any risk there? Any issue there from what we've seen with this -- with the economy and COVID thus far?

I'd say they are much more sensitive to funding environments. You're absolutely right. And as a consequence, I think they did come through -- I think, generally, I mean, the quick answer to your question, Dan, is no. I don't think there's been any fundamental pieces. I think we saw maybe back end of March, early April, kind of just a little bit of anxiety, let's call it, there with some of those folks, especially those who are the very small, nonfunded people. But I think even those coming through now, starting to see things open up again, additional funding opportunities opening up again. And so feeling a lot better, I would say, in the last couple of weeks. So -- and they're the very small folks which, as you know, we've got a very limited -- relatively limited exposure to. But certainly, even from what I've seen of those in the last couple of weeks, much more positive and seem to be trending back in the right direction. So there was no meaningful impact at any stage. I would say just the level of anxiety maybe crept up back end of March, early April, but seems to be back on track in terms of the markets being open and their funding environment being relatively solid. But I think the data out of Q1 shows that actually, it was a relatively solid period as well.

Got it. And then, Brendan, maybe back towards the idea of virtual trials, which is obviously different than remote monitoring. What -- like how nascent is that? I know you've got capabilities there with your Symphony acquisition, but how nascent is that opportunity? And what's happened thus far with COVID? And what's the -- what does kind of the future hold for that? And how does it impact ICON and the industry?

Yes, it's a very interesting piece. And without being -- I'm sure that the folks who are on the phone and listening to us are very, very well experienced and knowledgeable about this. But just to be very, very clear, remote monitoring and the difference between remote monitoring and virtual trials, of course, is when remote monitoring happens, the patient still attends at the doctor sites. It's just the monitoring of the clinical trial that's remote. So the CRA isn't physically attending at the doctor site while the patient still is. The virtual trial is when the patient is not attending at the doctor site that those meetings with the doctor are virtual in nature and that you're using home support or nurse networks, such as our acquisition Symphony that we did back in the last year to enable the conduct of a clinical trial really in the patient's home. And that's what we're talking about here when we talk about virtual trials. Huge uptick in interest, Dan, as you -- unsurprisingly, as we've come through the last couple of months, a lot of folks, a lot of big pharma partners are now really interested in taking that modality forward. We feel with the Symphony acquisition, was probably the last piece of our puzzle. We've been working on this for numerous years. Of course, we have some experience -- quite a lot of experience with our Mapi acquisition of a number of years ago in terms of Phase IV, real-world evidence types of trials where it's all very remote and really trying to play that ability back into the Phase III type trial was something that we've been working on for a while, working with logistics partners to make sure that drug and all other provisions actually got to the patient's home. And of course, now with the Symphony acquisition, ensuring that we could support the trial and the nurses are actually going out to the patient's home to help them with, whether it be blood draws, whether it be administration of medical devices, whatever the need be, that they're supporting the patients at the home. And of course, Dan, you're not -- it's not -- this is not a trial without a doctor, of course. The doctor just is at, say, let's call it, the super site, where it's one doctor would probably, in our instance, we would use one of our owned sites to actually act as the virtual doctor across numerous different patients through remote applications. And of course, the likes of which we're all working with on a daily basis now, these types of video-type conferencing pieces that we're doing at the moment. So very much a big tick -- uptick in interest in that and the modality of that and how we can actually roll that out across customers. And as I said, have a huge uptick in interest there with our customers. So we do feel like we're well placed. We -- actually, maybe what we've done over the last while has been, we've done a lot of pilot projects of different pieces or indeed all of the trial aspects that would need to be virtualized. And that's been something where we've really felt that we've had a lot of practical experience. So when the customers come to us to talk about this, we can really talk them through here the normal pitfalls that actually happened in virtual trials. And that really gives them a sense of confidence to actually know how to really operationalize these kind of trials. So yes, ongoing activity there, hope to have many more of those types of trials actually ramp-up in the future and certainly a huge uptick in interest in that space.

Great. I wanted to go back just to the sites and just maybe get a little bit more color on one aspect of it from a question, which is when you think about the sites opening back up, can you speak to like how the different sites are opening back up, say, like doctor's offices, of those like what percentage of those open back up versus maybe hospitals, maybe if you want to speak to your own sites versus third-party sites, but I'm just specifically wondering if there's a big bifurcation between, say, like doctor's offices and like hospitals and kind of more institutionalized sites?

Not that we've seen so far, Dan, is the quick answer. There's not a huge bifurcation. I think we will be there and working with our sites and supporting them as much as possible, both creatively and in every way we can to whether be that through the contracting, to the investigator payments pieces, we'll be looking at all the options there to make sure that those sites are supported, that their own cash flows are moving in the right direction from a clinical trial perspective. So definitely, I'm actually putting boots on the ground in terms of, obviously, our own infrastructure where we look to get up really as quickly as possible, in line with local government regulation. So I think as we see it so far, certainly, the infrastructural differences, not having a meaningful impact. We'll say it's early days. As I said, most of the sites are only starting to open up in the last week to 1.5 week in terms of normality returning to a lot of areas that have been impacted in Western Europe and North America. So I think it's 1 to watch, Dan, but certainly we're working very proactively with those sites to ensure that regardless of the size or scale of the site, that they're opening up on an equal basis and the folks are getting back in the swing of things. I think one of the things we are very conscious of is ensuring that the patients are positive about coming back to the site as well because of, obviously, there's one thing that doctor saying that the office is open, and you can come into clinical monitoring. The equally as important piece is ensuring that patients are comfortable with going back into those medical sites and continuing with their clinical trial. And that's something that we'll be monitoring very, very closely with our pharma partners. We're looking and tracking every patients involved on every clinical trial at the moment to ensure that they're undergoing some form of monitoring and their treatment obviously is regular. And that's something we'll be hugely focused on, I think, over the next couple of months with our project management teams to ensure that ramp is happening on an equal and even basis.

Right. And then we just have a few minutes left. Maybe 1 more on that, and then we'll do a question on M&A. So just on that front, so it sounds like the 2/3 of sites that were closed as of Q1 has gotten a bit better. I think 1 of your competitors talked about that number has gotten to like 55% are now impacted. So it's kind of improved. Is that a [indiscernible]? I don't know if you -- I don't think you gave a number, right? So 2/3 were impacted as of Q1, and it's gotten better now. I mean, is it is -- kind of how much better has it gotten are you willing to kind of say?

I think that it's probably early days to be absolutely honest. As we came into this quarter, obviously, we're talking about -- I know it feels longer for everybody because COVID time moves at a different pace to the rest of normal time. It's only a couple of weeks since our earnings call. And at that stage, we were kind of talking about 2/3 impacted. I think we're seeing, obviously, better signs ahead. But slow, I would say, a little bit slower than we -- to move that off the dial. Certainly, as we talk about the outlook that we gave, we were certainly thinking about a similar level of impact for the remainder of the quarter. So I suppose to what extent we are seeing positivity in the back end of May, and we are in June, maybe that will help us in terms of managing that overall impact in Q2 and give us a better visibility to the back end of the year in terms of hopefully being in a position to have to think about our financial performance for the back end of the next 6 months once we do our Q2 call. I think it's probably too soon to say, give you an absolute -- it's now at a different percentage. Certainly, the way we modeled it and talk about, it was 2/3 was the number for our Q2 performance, and then we'll think and talk about that number again when we have a significantly different data point.

Okay. And we just have like 1.5 minute left. So tough to squeeze this question in, but we'll have -- this had to be a short answer. So in terms of M&A, obviously, string of pearls but you were willing to go bigger. Just what does the environment look like today? Maybe just in closing? And how do we think about M&A for ICON as you look out over the shorter or kind of intermediate term?

Yes. I think it's been a really great period for our M&A over the last couple of months. Probably, it's been hard in the last, obviously, 2 months. But as we go back 12, 14 months, we've obviously done 2, 4 M&A, small acquisitions during that period, very much strategic bolt-on string of pearls type acquisitions. Very, very happy with that. We will continue with that process down. I think this -- obviously this period has been a little more affected by COVID slowdown. That is definitely starting to open up again, and I think that our M&A activity will gain pace, certainly as we get to the back-end of Q2, into Q3 and 4. So certainly we'll be looking at that in Q3 and 4 and seeing what we can be done. In terms of the scale of our ambition, listen, we're happy with the strategic pieces at the moment, and that's how we'll tactically continue at the moment. That said, we keep our eyes open in the wider marketplace. I think we have the ambition to be certainly 1 of the big players in this space. And I think we have the continuity of management and the experience as an organization to do that. So we will keep our eyes open to that larger M&A opportunity but nothing on the calendar as we go into the back end of this year, Dan, as you could imagine. But certainly, the smaller bolt-ons certainly is something that we're really hoping to ramp definitively in Q3, Q4.

Great. Well, with that, Brendan and Jonathan, thank you very much for being with us today. Hopefully you have a good rest of the day. And stay safe, and thanks, everyone, participating on the webcast.

Thank you all.

Okay. Take care.

Sure.