Fortrea (FTRE) Jefferies 2024 Global Healthcare Conference summary

Business updates and strategic direction

• Celebrating one-year anniversary as an independent clinical services company focused on phase I-IV research.

• Maintained an average book-to-bill ratio of 1.2 since going public, with a strong pipeline in both biotech and large pharma.

• Recently sold Endpoint and Patient Access businesses, using $275 million in proceeds to pay down debt.

• Over 50% of transition services agreements exited, on track to complete most by year-end.

• Completed an immaterial restatement related to legacy accounting issues, now resolved.

Commercial transformation and differentiation

• Initiated a commercial transformation with a new Chief Commercial Officer, improving processes and market approach.

• Leveraging multiple external data sources and partnerships with major tech firms like Veeva and Advarra to enhance trial efficiency.

• Focused on simplifying site technology and supporting physician investigators to improve patient recruitment.

• Emphasizing hands-on management and direct engagement with sites and customers.

Operational and financial performance

• Q1 revenue and backlog conversion were impacted by low prior-year sales and slow project ramp-up, especially in oncology.

• Addressing slower burn rates by improving project management, documentation readiness, and customer engagement.

• Shifting incentives toward higher-margin full-service clinical work and improving financial acumen across teams.

• Book-to-bill composition balanced across clinical pharmacology, FSP, and full-service outsourcing, with full service as the most profitable.