IQV - IQVIA: Potential AI Beneficiary

2024-05-28 13:17:59 ET

Summary

• IQVIA provides a broad range of services to biopharma customers, including outsourced R&D services in support of clinical trials.
• Recent spending caution and the end of COVID-related revenue have led to modest headwinds.
• AI-enabled drug discovery could lead to more clinical trials in the future, potentially benefiting IQVIA.
• Expectations for IQVIA's growth are currently fairly modest and as a result, IQVIA's valuation is reasonable.
• If AI-enabled drug discovery supports IQVIA's growth and profitability in coming years, the stock could rerate significantly higher.

IQVIA ( IQV ) provides a broad range of services to biopharma customers, with the majority of the company’s revenue coming from outsourced R&D related to clinical trials. IQVIA has faced modest headwinds recently due to both spending caution by customers and the end of COVID related revenue. Given current financial conditions and the behavior of biopharma companies, it seems reasonable that soft conditions will persist for some time. It is also possible that the recent reduction in R&D will hit the number of drugs entering clinical trials at some point....

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