Founded in Dublin by two Irish doctors in 1990, the clinical research organization ICON plc is the global Irish success story you’ve probably never heard of.
ICON is one of the biggest Irish success stories you’ve likely never heard of. A clinical research organization (CRO), the company works largely behind the scenes. ICON partners with pharmaceutical, biotechnology, and medical device companies to perform research, development, and clinical trials – from compound selection to Phases I-IV. Due to the nature of the field (and the attendant confidentiality agreements) you won’t hear ICON talk about the groundbreaking research it’s had a hand in. But given that ICON has worked with nearly all of the top 20 pharmaceutical and biotech companies and has a presence in 37 countries, chances are you’ve directly benefited as a result of this Irish company’s work.
ICON was founded in 1990 by two Irish doctors, Ronan Lambe and John Climax. From a staff of five people working out of a small Dublin office space, over the past two decades it has steadily grown and expanded its global presence to become a powerhouse with $1.3 billion in revenue and 10,300 employees around the world and counting.
CEO Ciarán Murray, who assumed the leadership role in 2011 after six years as chief financial officer, acknowledges that the very idea of an Irish CRO was a bit of a gamble. “We have just six million people on the island of Ireland, in comparison to about six million sheep and eight million cows. It really wouldn’t have been the most logical place to start a clinical trials company.” However, he posits that this apparent disadvantage played a significant role in ICON’s success. “It set us apart. A lot of people said, ‘A CRO from Ireland, what’s this about?’ So it prompted this curiosity that gave us the chance to present our pitch. And then we’ve always been really focused on delivery. We’ve always tried that bit harder, because we had to,” he explained recently over breakfast in Manhattan, where he now spends close to half of the year due to ICON’s strong presence in the U.S.
A glance at ICON’s timeline shows a trajectory of measured growth, a series of acquisitions and expansions that have allowed it to create the international presence necessary to compete with other top CROs. The first overseas office opened in the U.K. just one year after ICON was founded, and the year after that marked the opening of its first U.S. office in Philadelphia. They entered the Asian market in 1996 with offices in Tokyo, then South America in 1998 and Africa in 2002.
Even during Ireland’s worst recession years, which in 2010 saw ICON post its first-ever quarterly loss, it acquired Veeda Laboratories in the U.K. and Timaq Medical Imaging in Switzerland. It has also stepped in to acquire a number of Irish companies, such as Firecrest, a Limerick-based provider of clinical site technology solutions. Just a few weeks before Irish America talked to Murray, ICON reported a highly successful third quarter, with a net revenue growth of 19 percent to $339.8 million, setting the company on track for $1.3 billion in revenue for 2013.
It’s an exciting and competitive time for CROs, Murray explained. In the wake of what he describes as the “blockbuster drugs” of the ’90s, focus has shifted towards treatments for more complex and nuanced challenges, such as oncology and Alzheimer’s. This trickier territory, combined with stricter regulations and safety standards and changes in the health care industry as a whole, has resulted in pharmaceutical companies outsourcing more of their trials. “If you go back six or seven years, probably 20 to 25 percent of the studies were outsourced. Now it’s 40 percent and increasing, with a likelihood of going up to 70 percent in the next five to ten years,” he said.
But ICON is adept at adapting. Though the company is still headquartered in Ireland, just about seven percent of its workforce is stationed there, in Dublin and Limerick. Close to 40 percent of ICON’s employees are based in the U.S. (many in North Wales, PA), the rest strategically positioned around the world, with an ever-increasing presence in India (they employ 1,000 in Chennai) and China. Because language and cultural knowledge are necessities, the majority of the staff in these locations are local.
Still, even as ICON expands its operations globally, it remains markedly committed to its Irish roots. “How do you continue to be an Irish company, build the culture and promote the strengths when such a small percentage of the work force is in Ireland?” Murray asked. “We’re very conscious of that. So we have our leadership conferences in Ireland and we bring in staff from all over. Last year, Donal Og Cusak, the Cork hurler, came, and we had all our foreign guys and girls learning to hurl against him. We brought in some of the All Ireland footballers from Dublin and set up Gaelic football pitches inside the Ritz Carlton just outside of Dublin.”
ICON conducts its leadership training courses with University College Dublin, bringing in 150 senior leaders each year. They have also partnered with the Gaelic Players Association to create a scholarship program that encourages county players interested in life sciences to continue their education and advance career-wise. “The levels that these players train at is more or less professional now, and you want to make sure that, as young people, they keep an eye on their education, so we’re very conscious of that,” he said. “In addition, we’ve just developed a program in clinical trial management with UCD. We developed the syllabus with them and about 20 students signed on, from all over the world.” If the pilot year goes well, ICON and UCD will consider bringing the program to China and the U.S.
“We’re proud of being an Irish company, and as we make sure that we are the best and do the best, we also try to make sure that it reflects our culture and values,” he added.
Murray has an exceptionally keen understanding of both the advantages and difficulties of being an Irish company that operates on a global scale. “We get a lot of value out of the fact that we’re the only non-U.S. company out of the top eight [CROs] in the world,” he emphasized, “and I think that’s part of why we were able to grow so quickly. Other European CROs didn’t grow as quickly as we did. ICON, because we were in Ireland, we had no choice but to go out and look for opportunities outside of our own market.”
In the U.S., he said, being an Irish company has a definite advantage. “The Irish-American affinity has been helpful to us in doing business here. Through family ties and knowledge, people here have, generally, a very positive attitude towards Ireland.” He also maintained that, because of the sheer size of ICON’s presence in the U.S. and how early on it became a key part of the business, many within the company view its success story as Irish-American.
In keeping with its strong American ties, earlier in the year ICON moved its primary listing from the Irish Stock Exchange to the NASDAQ, where it had previously been an ADR (American Depository Receipt).
Elsewhere abroad, particularly in Asia, Murray noted, Ireland has a rather different reputation. “When I go to Asia, I sometimes have the opposite problem I have in this part of the world, where people occasionally think of Ireland as small and cute and green. The people who work for us know it mostly as home to a top CRO. Other people say ‘Oh Ireland, that’s Europe’s tech power house,’ and then they’re surprised to learn how small it is.”
One of the strengths he sees in being an Irish company is that the Irish seem to have a natural friendliness and openness that allows them to get along with many other nationalities. “We’re also unencumbered by a global military or colonial history, which, interestingly, puts Ireland in a very good position for doing business with Africa and China,” he noted.
Perhaps it is Murray’s own experience that granted him such insights and prepared him to lead one of Ireland’s most international companies. After qualifying as a chartered accountant with PwC (then Coopers & Lybrand) in Dublin, he re-located to Milan with the firm in 1989. There he joined Kraft, which had recently been acquired by Philip Morris, and a few years later transferred with them to London before returning to Ireland just as it entered its “Silicon Isle” years. With the tech firm Novell Inc., Murray was constantly back and forth between Ireland and California, which he credits with making him more optimistic and forward-looking. ICON approached him in 2005, and he joined as CFO to help the company build a more robust financial structure as it globalized.
In November, on Murray’s immediate horizon there was a trade mission to Japan with Taoiseach Enda Kenny. After that, he said, he would be meeting with the head of an up-and-coming pharmaceutical company in Seoul, South Korea.
As for ICON, its long-term outlook will focus primarily on three strategic factors, all centered on the way clients are changing. “The basic thesis for a business like ours is that we’re a professional services business, so we have to keep very much in tune with our clients’ needs. We’re not going to re-invent the Internet or penicillin, you know?” he mused. “But as we take on more, we do need to build a range of skill sets across multiple jurisdictions in the world, and the best way to do that is through partnering with academia, with schools like UCD, to attract the best graduates.”
The second factor, he said, would be employing new clinical technology to speed up and better chart the data of clinical trials, which can often take as long as 10 to 15 years. “With more real-time, adaptive analysis, safety improves and results improve,” he said.
The third strategic factor encompasses what ICON seems to have known and excelled at from the start: expanding geographically. “We’re going to see a lot more growth in Asia,” Murray predicted. “At the moment we have almost 20 percent of our workforce in Asia – 10 percent in India and 10 percent in the rest of Asia. In three to five years, you could see that go to 30 percent. And as we grow, the challenge is one of adapting to new cultures and languages, and keeping the culture of ICON and the values we have.”
Twenty years down the road – or, in all likelihood, sooner – chances are we will be talking about ICON as an Irish-American-Asian success story.