And they can — they have, with their new leadership, have an autonomy and an ability to move that business and to make decisions in that business in a quick and an agile manner. And so we’ve addressed that, albeit within the framework of a large and very financially stable and viable company. And so, that’s the benefit that we’re trying to give both to our biotech customers, and that’s resonating very well. I’ve had a couple of discussions with them myself and they understand what we bring now to the biotech space, that dedicated resource, and that financial stability and ability to bring innovation and creativity and agility to their projects. So, as we have our senior managers sort of double down and focus in on these key opportunities in terms of engaging with customers, talking to them, understanding their needs, putting to them the various innovations and solutions that we can as an organization present, it’s starting to really resonate nicely and it’s, as I say, turned into a — it gave us a nice uptick on the win rate.
There’s no one reason that this sort of thing happens, but it is, I think, a trend, and I do believe it will continue.
Dan Leonard: Thank you. And a related follow up. I just want to make sure I understand better the biotech rebrand. A couple of years ago at your Analyst Day, you talked about your dedicated business units for biotech, 8,000 employees and such. So, what exactly changed at the end of the year?
Steve Cutler: I don’t know that much changed operationally from our point of view. What I think we’ve done now is to communicate that better to customers and to engage our — as I said, we have new leadership in there and they’ve done a really nice job in making that connection with customers personally and on a face to face sort of basis. So, there’s an element of ICON being known, I think, as the larger pharma CRO in the past. And that’s quite valid and continues, as you well know. But we also do a significant amount of work. About 30%, 35% of our work is in the biotech space. And that’s — so, it’s a very important segment for us. As you all know, there’s a lot of innovation in drug development comes out of the biotech and certainly drug research comes out of the biotech.
A lot of the new drugs, I think something like 40% of new drugs that got to market last year through FDA were originated in the biotech space. So, they make a huge contribution to the drug development landscape and being a key provider and a key partner of that segment is really important. So, I think, they better understand that now. We’ve been able to communicate that better. Our marketing message is getting out there. But probably more important than marketing messages is our key senior leaders in that team have been out talking with customers and having them understand what it means to have 8,000 people available to them and for them to be able to put the innovation with that level of financial viability. It’s a communication thing and I think we’re really starting to get on top of that now.
Kate Haven: Yeah. And I think it’s an important point, Dan, that you made that structurally, actually, it isn’t different than what we presented at the Analyst Day in terms of having a dedicated segment to biotech with those dedicated resources. It’s really around that customer perception and making sure people understand that, which is what we’re redoubling efforts on and not making the structural changes there.
Dan Leonard: Appreciate that. Thank you, both.
Steve Cutler: Good.
Operator: Please stand by while I prepare your next question. The next question is from Michael Ryskin at Bank of America. Please go ahead.
Michael Ryskin: Great. Thanks for taking the question, guys. And Brendan, I want to say congrats and wishing you the best going forward. I know you’ll still be here for the next couple of calls, but still it’s good working.
Brendan Brennan: Thanks, Michael.
Michael Ryskin: Yep. I want to focus a little bit on the big pharma segment a little bit or customer group a little bit. I think, in your prepared remarks, you called out continuation of robust demand and you talked about R&D for the group for 2024 seems to be pretty stable, in line with prior. I just want to get a sense of how much of that has already locked in when we think where we are in the year in April. Is there a risk of that changing as you go forward? I know budgets can be set, but there’s also news this morning of Bristol announcing job cuts, 2,200 layoffs. There’s still some things that are fluid in that end market. Just curious how those conversations have evolved year to date and sort of upside/downside risk for the rest of the year?
Steve Cutler: Yeah, right. Mike, I’ll take it. And Brendan might want to jump in. As we said, we’ve seen pretty strong demand in the large pharma space. And it’s not just this quarter. It’s been really over the last 12 months, 18 months. Nothing has changed in that respect. Have some of the larger companies changed their models or adjusted their budgets? And the absolute answer is yes to that. We’ve seen a — we’ve certainly seen some of that in the first quarter where revenues have gone down and up in different areas. We’re very encouraged by — we’re encouraged by the overall growth of the organization, because certainly outside our top 10 on a year-on-year basis, we’ve seen significant revenue uptick and growth. And that’s not necessarily all sort of smaller customers.
The biotech customers, some of them are quite large for us, but so it doesn’t exactly equate when you go outside top 10 or outside top 25 to be smaller or biotech customers. But that segment has certainly increased. And there’s one or two in the upper echelons of our revenue group that have come down a bit, because of things that you just mentioned, budget cuts and some challenges they have with patent extensions, et cetera, et cetera. So, it’s — quarter-to-quarter, it can go one way or the other. Sometimes we finish a significant project at the end of last year and then the revenue falls off a little bit for the first quarter, that sort of thing happens. Overall, we see a very stable and very strong demand in the large pharma. And as — I think, I talked about sort of 3% to 4%, but we believe we’re taking market share in that space and a good part of our growth is due to our strong operational delivery in that space.
And so, it’s a strong and a continuing market for us. And we believe while there will be puts and pulls, and ups and downs, and some customers will have greater budget challenges, many of them have some significant patent life challenges or loss of exclusivity issues coming up over next — that’s a relatively common theme. It’s a constant thing that they deal with on a regular basis. It means they have to do more R&D to bring new compounds through. So, yeah, overall, we feel good about that space.
