24 August 2018 Americas/United States Healthcare

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

24 August 2018 Americas/United States

Equity Research

Healthcare Technology & Distribution

Contract Research Organizations

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]

Charles Lederer, CPA

212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]

CHANNEL CHECK

Biotech growth engine humming

■ Biotech funding momentum continues (+123% in July; +106% YTD):

We track multiple data points to measure the health of the biotech funding

environment, and according to BioWorld, a comprehensive data source,

biotech funding, including public and private sources, increased 123% in

July, a sequential improvement from the healthy +75% in June and +36%

in 2Q. The latest data suggests that funding for promising molecules and

biotech balance sheets remains healthy, which bodes well for fundamental

demand across our CRO universe. As a caveat, we emphasize that funding

can stem from multiple sources and may not be fully represented in this

data. For instance, large pharmaceutical companies can represent a key

source of funding for small and mid-sized biotech companies, inherently

more insulated from broader capital markets activities than venture capital

and public market funding.

■ Constructive commentary from industry constituents: Preclinical

leader Charles River Laboratories (CRL, Neutral) recently emphasized a

significantly improved biopharma R&D environment, with small to mid-

sized biopharma companies growing 3-4x faster than the top 20 global

biopharmaceutical companies, a key growth driver across our CRO

universe. Biotech continues to play an increasingly important role in the

drug development continuum, as the innovation engine, with less than 12%

of the total R&D pipeline attributable to top 20 biopharma. Given biotech’s

increasing ownership of the global R&D pipeline, the industry is

unsurprisingly larger and better funded than a decade ago, now including

2x the companies with active biopharma R&D pipelines. Importantly, CRL

highlighted biotech companies have 3+ years of cash in the bank, and

latest optimism on the current biotech environment and its longer term

runway as positives across the broader CRO universe.

■ Raising TPs across our CRO universe: In light of continued robust

biotech funding updates, as reported by BioWorld, in conjunction with

upbeat biotech commentary from industry constituents, we raise the target

prices of ICON PLC, IQVIA, LabCorp, Medpace Holdings, PRA Health

Sciences, and Syneos Health to $159 (from $144), $137 (from $128), $197

(from $195), $62 (from $61), $115 (from $107), and $54 (from $53),

respectively. Risks to our call include a tightening biotech funding,

cancellations, and other R&D demand shifts.

■ Up next: ICRL is hosting an investor day on September 10, where we look

for another update on the biotech and broader biopharma funding

environment, as well as an update on its longer term outlook.

24 August 2018

Contract Research Organizations 2

Figure 1: Quarterly overall biotech funding, including public offerings, other funding of public

biotechnology companies, and funding of private biotechnology companies

Source: Credit Suisse, BioWorld, Thomson Reuters Note: Public offerings include IPOs and follow-ons; Public/other includes other financings of public companies, including loans, bridge financings, exercises of warrants, debt offerings, rights offerings, standard private placements, PIPE financings and institutional offerings of registered stock; Private biotechs include financings of private firms.

Figure 2: Monthly overall biotech funding, including public offerings, other funding of public biotechnology

companies, and funding of private biotechnology companies

Source: Credit Suisse, BioWorld, Thomson Reuters Note: Public offerings include IPOs and follow-ons; Public/other includes other financings of public companies, including loans, bridge financings, exercises of warrants, debt offerings, rights offerings, standard private placements, PIPE financings and institutional offerings of registered stock; Private biotechs include financings of private firms.

$5.2

$2.8

$5.8

$4.3

$5.0

$5.9

$4.9

$6.3

$9.9

$8.7

$6.3

$12.0

$14.6

$12.6

$34.2

$7.2

$6.2

$6.2

$12.6

$12.7

$7.7

$11.0

$15.8

$17.2

$23.2

$15.0

$0bn

$5bn

$10bn

$15bn

$20bn

$25bn

$30bn

$35bn

$40bn

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

Private biotechs

Public/other

Public offerings

+36% year-over-year growth

$2.8

$0.8

$1.2

$0.8

$1.2

$3.9

$0.7

$1.6

$

1.1

$1.6

$3.0

$0.6

$1.4

$0.9

$

3.4

$1.5

$1.3

$0.9

$2

.7

$2.6

$2.4

$1.3

$3.2

$3.3

$3.4

$2.5

$3.5

$2.7

$2.1

$

2.2

$2.0

$2.7

$7.1

$2.3

$6.2

$3.2

$5.2

$4.7

$3.3

$4.6

$4.8

$10.6

$

18

.7

$3.3

$2.1

$1.9

$3.2

$1.7

$1.3

$1.7

$2.0

$2.5

$2.5

$2.1

$8.0

$3.2

$6.0

$3.5

$2.5

$1.9

$3.3

$3.8

$3.5

$3.7

$2.6

$4.8

$8.5

$4.6

$8.1

$4.4

$7.8

$9.5

$5.9

$3.8

$4.6

$6.5

$5.7

$0bn

$2bn

$4bn

$6bn

$8bn

$10bn

$12bn

$14bn

$16bn

$18bn

$20bn

Mar-

12

May

-12

Jul-

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Sep-1

2

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Jan-1

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Mar

-13

May

-13

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Sep-1

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-15

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Sep-1

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6

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-16

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Sep-1

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7

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May

-17

Jul-

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Sep-1

7

Nov-

17

Jan-1

8

Mar-

18

May

-18

Jul-

18

Private biotechs

Public/other

Public offerings+123% year-over-year

growth in July

24 August 2018


Figure 3: Public offerings of biotech companies, including IPOs, follow-ons (monthly)

Source: Credit Suisse, BioWorld, Thomson Reuters

Figure 4: Other financings of public biotechnology companies (monthly)

Includes loans, bridge financings, exercises of warrants, debt offerings, rights offerings, standard private placements,

PIPE financings and institutional offerings of registered stock


$0.1

$0.5

$2.3

$0.2

$0.8

$0.4

$2.2

$1.1

$0.8

$0.3

$1.0

$1.9

$0.7

$0.5

$1.8

$

2.3

$2.7

$1.0

$3.0

$1.7

$1.2

$0.4

$0.9

$1.5

$5.2

$1.5

$4.3

$2.6

$3.1

$3.2

$1.5

$3.2

$3.3

$9.0

$17.6

$0.8

$0.7

$

0.7

$1.5

$0.4

$0.4

$0.4

$0.6

$1.0

$1.5

$1.4

$6.6

$1.6

$4.6

$0.9

$1.2

$0.7

$2.1

$

1.6

$2.1

$2.5

$1.7

$2.6

$6.7

$2.4

$5.6

$2.8

$5.4

$7.4

$3.1

$1.9

$1.8

$4.3

$3.4

$0.0bn

$2.0bn

$4.0bn

$6.0bn

$8.0bn

$10.0bn

$12.0bn

$14.0bn

$16.0bn

$18.0bn

$20.0bnN

ov-

12

Jan-1

3

Mar

-13

May-

13

Jul-

13

Sep-1

3

Nov-

13

Jan-1

4

Mar

-14

May-

14

Jul-

14

Sep-1

4

Nov-

14

Jan-1

5

Mar

-15

May-

15

Jul-

15

Sep-1

5

Nov-

15

Jan-1

6

Mar

-16

May

-16

Jul-

16

Sep-1

6

Nov-

16

Jan-1

7

Mar

-17

May-

17

Jul-

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Sep-1

7

Nov-

17

Jan-1

8

Mar

-18

May-

18

Jul-

18

+94 year-over-year growth in July

+29% year-over-year growth in 2Q

$0.4

$

0.4

$0.5

$0.2

$0.6

$0.1

$0.7

$0.1

$0.2

$0.3

$1.3

$

0.2

$1.1

$0.4

$1.1

$0.5

$0.4

$0.5

$0.1

$0.6

$0.6

$1.3

$0.7

$0.6

$

1.4

$0.2

$0.7

$

0.2

$1.4

$0.7

$0.9

$0.7

$0.6

$0.9

$0.3

$1.3

$

0.1

$0.4

$0.6

$0.5

$0.3

$0.7

$0.8

$0.9

$0.2

$0.3

$0.3

$0.9

$0.6

$1.6

$0.4

$0.7

$0.5

$1.8

$0.7

$0.4

$0.2

$0.5

$0.7

$0

.9

$1.5

$0.4

$0.9

$0.7

$1.2

$

0.4

$1.3

$0.6

$1.0

$0.0bn

$0.5bn

$1.0bn

$1.5bn

$2.0bn

$2.5bn

Nov-

12

Jan-1

3

Mar

-13

May-

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Jul-

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Sep-1

3

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4

Mar

-14

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Sep-1

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Mar

-15

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6

Mar

-16

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Sep-1

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-17

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8

Mar

-18

May

-18

Jul-

18

+312 year-over-year growth in July

-19% year-over-year growth in 2Q

24 August 2018


Figure 5: Funding of private biotechnology companies (monthly)


Figure 6: IPO funding for healthcare companies (monthly)

Source: Credit Suisse, EvaluatePharma Note: This is a different source from BioWorld data, and 1Q18 excludes Siemens Healthineers’ $5.1 billion IPO

$0.6

$0.6

$0.2

$0.1

$0.1

$0.4

$0.5

$0.2

$0.3

$0.3

$0.4

$0.5

$0.6

$0.4

$0.4

$0.4

$0.3

$0.9

$0.4

$0.4

$0.3

$0.5

$0.4

$0.6

$0.4

$0.6

$

1.2

$0.4

$0.7

$0.9

$0.9

$0.7

$0

.9

$0.7

$0.7

$1.1

$1.3

$0.8

$1.1

$0.8

$0.5

$0.5

$0.6

$0.7

$0.7

$0.5

$1.1

$0.7

$0.7

$0

.9

$0

.9

$0.5

$0.7

$0.4

$0.7

$0.9

$0.6

$1.7

$1.0

$1.3

$1.0

$1.2

$1.4

$1.4

$1.7

$1.6

$1.5

$1.6

$1.3

$0.0bn

$0.5bn

$1.0bn

$1.5bn

$2.0bn

$2.5bnN

ov-

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Jan-1

3

Mar-

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May

-13

Jul-

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Sep-1

3

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Jan-1

4

Mar-

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May

-14

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Sep-1

4

Nov-

14

Jan-1

5

Mar-

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May

-15

Jul-

15

Sep-1

5

Nov-

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Jan-1

6

Mar-

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May

-16

Jul-

16

Sep-1

6

Nov-

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Jan-1

7

Mar-

17

May

-17

Jul-

17

Sep-1

7

Nov-

17

Jan-1

8

Mar-

18

May

-18

Jul-

18

+133% year-over-year growth in July

+134% year-over-year growth in 2Q

$0.1

$0.1

$0.1

$0.1

$0.1

$0.2

$1.4

$0.5

$0.4

$0.3

$0.6

$0.4

$0.4

$0.2

$0.6

$

0.9

$1.1

$0.3

$0.2

$

0.6

$2.6

$0.2

$0.5

$0.7

$1.0

$2.4

$0.5

$0.2

$0.3

$0.9

$0.3

$2.6

$1.0

$0.4

$0.2

$0.5

$0.4

$0.4

$0.0

$0.5

$0.1

$0.1

$0.4

$0.2

$0.9

$0.3

$0.2

$0.5

$0.0

$0.1

$0.3

$0.2

$0.0

$0.3

$0.5

$

0.6

$

0.6

$

0.1

$0.6

$0.4

$0

.7

$0.5

$0.6

$0.1

$0.5

$0.1

$1.1

$1.7

$1.1

$0.0bn

$0.5bn

$1.0bn

$1.5bn

$2.0bn

$2.5bn

$3.0bn

Nov-

12

Jan-1

3

Mar

-13

May

-13

Jul-

13

Sep-1

3

Nov-

13

Jan-1

4

Mar

-14

May

-14

Jul-

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Sep-1

4

Nov-

14

Jan-1

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Mar

-15

May

-15

Jul-

15

Sep-1

5

Nov-

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Jan-1

6

Mar

-16

May

-16

Jul-

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Sep-1

6

Nov-

16

Jan-1

7

Mar

-17

May

-17

Jul-

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Sep-1

7

Nov-

17

Jan-1

8

Mar

-18

May

-18

Jul-

18

YTD IPO funding +109%

24 August 2018


Figure 7: VC funding for healthcare companies (monthly)

Source: Credit Suisse, EvaluatePharma Note: This is a different source from BioWorld data

Figure 8: Biotechnology IPOs (1979-2018YTD)

Source: Credit Suisse, Stelios Papadopoulos, EvaluatePharma, Renaissance Capital, BioWorld, Thomson Reuters Note: Data uses multiple sources that may use different thresholds for inclusion, and thus, the data should only be used to indicate broad trends

$0.2

$0.3

$0.6

$1.0

$0.5

$0.4

$0.4

$

0.5

$0.8

$0.7

$0.6

$0.9

$0.7

$0.8

$1.1

$

0.7

$0.5

$

0.4

$0.7

$0.6

$1.2

$0.7

$0.8

$1.3

$0.6

$1.0

$

0.9

$1.2

$1.5

$1.2

$0.9

$1.1

$1

.4

$0.8

$1.5

$

1.3

$1.0

$0.8

$1.0

$0.7

$1.2

$0.6

$1.1

$1.0

$

1.1

$1.0

$1.0

$1.2

$0.9

$1.2

$0.5

$0.9

$0.9

$0.8

$1.9

$1.5

$2.1

$0.9

$1.4

$2.0

$1.6

$1.5

$1.7

$1.6

$1.6

$1.2

$0.0bn

$0.5bn

$1.0bn

$1.5bn

$2.0bn

$2.5bn

$3.0bnFeb-1

3

Apr-

13

Jun-1

3

Aug-1

3

Oct

-13

Dec-

13

Feb-1

4

Apr-

14

Jun-1

4

Aug-1

4

Oct

-14

Dec-

14

Feb-1

5

Apr-

15

Jun-1

5

Aug-1

5

Oct

-15

Dec-

15

Feb-1

6

Apr-

16

Jun-1

6

Aug-1

6

Oct

-16

Dec-

16

Feb-1

7

Apr-

17

Jun-1

7

Aug-1

7

Oct

-17

Dec-

17

Feb-1

8

Apr-

18

Jun-1

8

YTD VC funding +78%

82

61

31

58

52

0

10

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1979

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2018Y

TD

24 August 2018


Figure 9: Top-20 Biopharma as a % of Total R&D

Pipeline (#) in 2008

Figure 10: Top-20 Biopharma as a % of Total R&D

Pipeline (#) in 2018

Source: Credit Suisse estimates, Citeline, FDA, Charles River Laboratories Source: Credit Suisse estimates, Citeline, FDA, Charles River Laboratories

Figure 11: % of FDA Druv Approvals Originated by Top-10 Pharma (2008-2017)

Source: Credit Suisse, HBM Partners, FDA, Charles River Laboratories

Top 20 Biopharma,

25%

Other, 75%

Top 20 Biopharma,

12%

Other, 88%

Top 10 Biopharma, 19%

Other, 81%

24 August 2018


Figure 12: Estimated biotech exposure by CRO

Source: Company data, Credit Suisse estimates

CRO Pharma Biotech/other Commentary

MEDP 35% 65% 65% small/mid-sized biotech, 23% mid-sized pharma, 12% large pharma on 2016 revenue

Chiltern 44% 56% 28% Top 25 biophama, 16% top 26-50 biopharma, 56% SMID biopharma

CRL 46% 54% 54% biotech/other, 15% academic/government, 30% global as of May 2017

PRAH 67% 33% 52% large pharma, 16% large biotech, 17% small/mid-sized pharma, 14% emerging biotech as of 2Q17

SYNH 70% 30% 53% Top 20 biophama, 17% top 21-50 biopharma, 30% SMID biopharma (pro-forma following inVentiv merger)

ICLR 70% 30%No breakdown, has stated historically that their traditional clinical business is roughly 70% large pharma and 30% spec

pharma/biotech

IQV Not disclosed Not disclosed No disclosure, but its Novella unit (focused on small biotech) is estimated L-MSD% of revenue

PRXL Not disclosed Not disclosedNo disclosure, but its BioPharm unit is said to be growing rapidly and focused exclusively on emerging biotech. Though, likely

less exposure to biotech than others

CVD Not disclosed Not disclosed No disclosure, previously 85% large pharma, and 15% biotech when last disclosed.

24 August 2018


Americas/United States Healthcare Technology & Distribution

ICON PLC (ICLR) Rating OUTPERFORM Price (23-Aug-18, US$) 144.48 Target price (US$) (from 144.00) 159.00 52-week price range (US$) 147.55 - 103.82 Market cap(US$ m) 7,772 Enterprise value (US$ m) 7,761 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]


212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]

Raising TPs across our CRO universe

■ Raising our TP; Reiterate Outperform: In light of continued robust biotech

funding data, as reported by BioWorld, in conjunction with upbeat biotech

commentary from industry constituents, we raise the target price of ICON

PLC to $159 (from $144). Risks to our call include a tightening in biotech

funding, other R&D demand shifts, cancellations/wins.

Share price performance

On 23-Aug-2018 the S&P 500 INDEX closed at 2856.98

Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$107.51

Quarterly EPS Q1 Q2 Q3 Q4 2017A 1.29 1.31 1.35 1.43 2018E 1.42 1.51 1.51 1.60 2019E 1.60 1.63 1.70 1.80

Financial and valuation metrics

Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 5.39 6.04 6.73 7.40 Prev. EPS (US$) - - - - P/E rel. (%) 123.0 135.1 133.7 134.0 Revenue (US$ m) 1,758.4 2,586.8 2,799.3 2,995.3 EBITDA (US$ m) 407.4 452.3 493.3 527.8 OCFPS (US$) 7.42 8.20 8.96 9.74 P/OCF (x) 15.1 17.6 16.1 14.8 EV/EBITDA (current) 19.0 17.2 15.7 14.7 Net debt (US$ m) -12 -12 -12 -12 ROIC (%) 32.66 36.66 40.56 43.86

Number of shares (m) 53.79 IC (current, US$ m) 932.95 BV/share (Next Qtr., US$) - EV/IC (x) - Net debt (Next Qtr., US$ m) - Dividend (current, US$) - Net debt/tot eq (Next Qtr.,%) - Source: Company data, Thomson Reuters, Credit Suisse estimates

24 August 2018


ICON PLC (ICLR)

Price (23 Aug 2018): US$144.48; Rating: OUTPERFORM; Target Price: (from 144.00) 159.00; Analyst: Erin Wright

Income Statement 12/17A 12/18E 12/19E 12/20E

Revenue (US$ m) 1,758.4 2,586.8 2,799.3 2,995.3 EBITDA (US$ m) 407 452 493 528 Depr. & amort. (61) (68) (68) (68) EBIT (US$) 346 384 425 460 Net interest exp (10) (10) (9) (9) PBT (US$) 336 374 416 451 Income taxes (40) (41) (46) (49) Profit after tax 296 333 370 401 Minorities -0 -0 -0 -0 Reported net income (US$) 296 333 370 401 Other NPAT adjustments 0 0 0 0 Adjusted net income 296 333 370 401

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 346 384 425 460 Net interest (10) (10) (9) (9) Change in working capital - - - - Cash flow from operations 407 452 493 528 CAPEX (267) (93) (93) (98) Free cashflow to the firm 141 360 401 429 Acquisitions - - - - Divestments - - - - Cash flow from investments (267) (93) (93) (98) Net share issue(/repurchase) - - - - Dividends paid 0 0 0 0 Changes in Net Cash/Debt 99 0 0 0

Balance Sheet (US$) 12/17A 12/18E 12/19E 12/20E

Assets Cash & cash equivalents 360 360 360 360 Account receivables 354 354 354 354 Other current assets 0 0 0 0 Total current assets 715 715 715 715 Total fixed assets - - - - Investment securities - - - - Total assets 1,484 1,484 1,484 1,484 Liabilities Total current liabilities 19 19 19 19 Total liabilities 539 539 539 539 Shareholder equity 945 945 945 945 Total liabilities and equity 1,484 1,484 1,484 1,484 Net debt (12) (12) (12) (12)

Per share 12/17A 12/18E 12/19E 12/20E

No. of shares (wtd avg) 55 55 55 54 CS adj. EPS 5.39 6.04 6.73 7.40 Prev. EPS (US$) - - - - Dividend (US$) 0.00 0.00 0.00 0.00 Free cash flow per share 2.56 6.52 7.28 7.92

Earnings 12/17A 12/18E 12/19E 12/20E

Sales growth (%) 5.5 47.1 8.2 7.0 EBIT growth (%) 8.2 11.0 10.6 8.1 Net profit growth (%) 9.8 12.7 11.1 8.3 EPS growth (%) 12.8 12.1 11.4 10.0 EBITDA margin (%) 23.2 17.5 17.6 17.6 EBIT margin (%) 19.7 14.9 15.2 15.3 Pretax margin (%) 19.1 14.5 14.9 15.0 Net margin (%) 16.8 12.9 13.2 13.4

Valuation 12/17A 12/18E 12/19E 12/20E

EV/Sales (x) 4.41 3.00 2.77 2.59 EV/EBITDA (x) 19.0 17.2 15.7 14.7 EV/EBIT (x) 22.4 20.2 18.3 16.9 P/E (x) 26.8 23.9 21.5 19.5 Price to book (x) 8.4 8.4 8.4 8.3 Asset turnover 1.2 1.7 1.9 2.0

Returns 12/17A 12/18E 12/19E 12/20E

ROE stated-return on (%) 31.3 35.3 39.2 42.5 ROIC (%) 32.7 36.7 40.6 43.9

Gearing 12/17A 12/18E 12/19E 12/20E

Net debt/equity (%) (1.2) (1.2) (1.2) (1.2) Interest coverage ratio (X) 33.7 39.1 46.5 50.3


Company Background

ICON public limited company (ICON) is an Ireland-based contract research organization (CRO), providing outsourced development services to the pharmaceutical, biotechnology and medical device industries.

Blue/Grey Sky Scenario

Our Blue Sky Scenario (US$) (from 173.00) 191.00

Our $191/share blue sky valuation for ICLR assumes substantial new business wins, additional project awards more than offsetting sizable cancellations, incremental profit margin expansion, and more pronounced strength in R&D spending and outsourcing demand.

Our Grey Sky Scenario (US$) (from 115.00) 127.00

Our $127/share grey sky valuation for ICLR assumes a greater-than-expected decline in business from its largest customers, increased project cancellations, profit margin degradation, customer consolidation, capital deployment missteps, and weakening demand for outsourced R&D.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$107.51

Source: Company data, Thomson Reuters, Credit Suisse estimates

24 August 2018



IQVIA Holdings, Inc. (IQV) Rating OUTPERFORM Price (23-Aug-18, US$) 124.39 Target price (US$) (from 128.00) 137.00 52-week price range (US$) 125.24 - 94.08 Market cap(US$ m) 25,200 Enterprise value (US$ m) 28,303 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]

Katie Tryhane

212 325 2713

[email protected]


212 538 1822

[email protected]




commentary from industry constituents, we raise the target price of IQVIA to

$137 (from $128). Risks to our call include a tightening in biotech funding,

other R&D demand shifts, new business volatility.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$95.11



Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 4.55 5.48 6.14 6.77 Prev. EPS (US$) - - - - P/E rel. (%) 125.4 128.2 126.1 126.0 Revenue (US$ m) 8,022.0 10,322.4 10,864.0 9,706.8 EBITDA (US$ m) 2,009.8 2,203.7 2,358.1 2,526.8 OCFPS (US$) 6.95 8.04 8.74 9.37 P/OCF (x) 14.1 15.5 14.2 13.3 EV/EBITDA (current) 14.8 12.8 11.3 9.9 Net debt (US$ m) 4,619 3,103 1,470 -293 ROIC (%) 8.76 10.22 11.05 11.93

Number of shares (m) 202.59 IC (current, US$ m) 14,635.00 BV/share (Next Qtr., US$) - EV/IC (x) - Net debt (Next Qtr., US$ m) - Dividend (current, US$) - Net debt/tot eq (Next Qtr.,%) - Source: Company data, Thomson Reuters, Credit Suisse estimates

24 August 2018


IQVIA Holdings, Inc. (IQV)



Revenue (US$ m) 8,022.0 10,322.4 10,864.0 9,706.8 EBITDA (US$ m) 2,010 2,204 2,358 2,527 Depr. & amort. (241) (259) (260) (260) EBIT (US$) 1,769 1,945 2,098 2,267 Net interest exp (339) (406) (412) (412) PBT (US$) 1,439 1,534 1,686 1,855 Income taxes (396) (354) (387) (426) Profit after tax 1,043 1,180 1,299 1,429 Minorities (30) (34) (36) (36) Reported net income (US$) 1,013 1,146 1,263 1,393 Other NPAT adjustments 0 0 0 0 Adjusted net income 1,013 1,146 1,263 1,393

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 1,769 1,945 2,098 2,267 Net interest (339) (406) (412) (412) Change in working capital 212 212 212 212 Cash flow from operations 1,547 1,680 1,797 1,927 CAPEX (164) (164) (164) (164) Free cashflow to the firm 1,383 1,516 1,633 1,763 Acquisitions - - - - Divestments - - - - Cash flow from investments (164) (164) (164) (164) Net share issue(/repurchase) 0 0 0 0 Dividends paid 0 0 0 0 Changes in Net Cash/Debt 1,383 1,516 1,633 1,763


Assets Cash & cash equivalents 2,581 4,097 5,730 7,493 Account receivables 1,707 1,707 1,707 1,707 Other current assets 432 432 432 432 Total current assets 4,720 6,236 7,869 9,632 Total fixed assets 406 406 406 406 Investment securities - - - - Total assets 22,364 23,880 25,513 27,276 Liabilities Total current liabilities 2,705 2,705 2,705 2,705 Total liabilities 12,348 12,348 12,348 12,348 Shareholder equity 10,016 11,532 13,165 14,928 Total liabilities and equity 22,364 23,880 25,513 27,276 Net debt 4,619 3,103 1,470 (293)

Per share 12/17A 12/18E 12/19E 12/20E


Earnings 12/17A 12/18E 12/19E 12/20E

Sales growth (%) 3.8 28.7 5.2 (10.7) EBIT growth (%) 4.4 9.9 7.9 8.0 Net profit growth (%) (3.9) 13.2 10.2 10.3 EPS growth (%) 7.5 20.4 12.0 10.3 EBITDA margin (%) 25.1 21.3 21.7 26.0 EBIT margin (%) 22.0 18.8 19.3 23.4 Pretax margin (%) 17.9 14.9 15.5 19.1 Net margin (%) 12.6 11.1 11.6 14.4

Valuation 12/17A 12/18E 12/19E 12/20E


Returns 12/17A 12/18E 12/19E 12/20E


Gearing 12/17A 12/18E 12/19E 12/20E

Net debt/equity (%) 46.1 26.9 11.2 (2.0) Interest coverage ratio (X) 5.2 4.8 5.1 5.5


Company Background

IQVIA, Inc. is the world's largest contract research organization (CRO) and leading healthcare information and technology services company.



Our $164/share blue sky scenario for IQV is supported by our bull SOTP scenario and assumes cost synergies from the IMS merger exceed expectations, substantial cross selling of CRO and commercial services to existing and new clients, greater new project awards due to its broader, diversified service offering, and more pronounced strength in R&D spending and fundamental outsourcing demand.


Our $110/share grey sky scenario for IQV is supported by our bear SOTP scenario and assumes that cost synergies take longer than expected to be captured, integration-related miscues, including disruptions in service to clients, other capital deployment missteps, and weakening demand for outsourced R&D and relevant commercial services.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$95.11


24 August 2018



LabCorp of America (LH) Rating OUTPERFORM Price (23-Aug-18, US$) 175.92 Target price (US$) (from 195.00) 197.00 52-week price range (US$) 189.41 - 147.99 Market cap(US$ m) 17,926 Enterprise value (US$ m) 24,162 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]

A.J. Rice

212 325 8134

[email protected]


212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]

Caleb Harris, CPA

212 325 7458

[email protected]




commentary from industry constituents, we raise the target price of LabCorp

$197 (from $195). Risks to our call include a tightening in biotech funding,

other R&D demand shifts, potential integration headwinds, government

reimbursement changes, hospital and lab competition.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$154.42



Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 9.24 11.57 12.25 12.84 Prev. EPS (US$) - - - - P/E rel. (%) 87.3 85.9 89.4 94.0 Revenue (US$ m) 10,307.9 11,412.0 11,763.5 12,198.7 EBITDA (US$ m) 1,989.2 2,131.5 2,231.7 2,304.6 OCFPS (US$) 19.15 20.71 21.86 22.83 P/OCF (x) 8.3 8.5 8.0 7.7 EV/EBITDA (current) 12.3 11.3 10.3 9.5 Net debt (US$ m) 6,445 6,236 5,143 3,989 ROIC (%) 8.42 10.45 11.97 13.67


24 August 2018


LabCorp of America (LH)



Revenue (US$ m) 10,307.9 11,412.0 11,763.5 12,198.7 EBITDA (US$ m) 1,989 2,132 2,232 2,305 Depr. & amort. (317) (312) (322) (334) EBIT (US$) 1,673 1,819 1,910 1,971 Net interest exp (235) (253) (245) (245) PBT (US$) 1,445 1,586 1,665 1,726 Income taxes (479) (396) (416) (431) Profit after tax 966 1,190 1,249 1,295 Minorities (6) 2 1 1 Reported net income (US$) 960 1,191 1,251 1,296 Other NPAT adjustments 0 0 0 0 Adjusted net income 960 1,191 1,251 1,296

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 1,673 1,819 1,910 1,971 Net interest (235) (253) (245) (245) Change in working capital - - - - Cash flow from operations 1,989 2,132 2,232 2,305 CAPEX (403) (411) (419) (427) Free cashflow to the firm 1,587 1,721 1,813 1,877 Acquisitions - - - - Divestments - - - - Cash flow from investments (403) (411) (419) (427) Net share issue(/repurchase) - - - - Dividends paid 0 0 0 0 Changes in Net Cash/Debt (1,030) 210 1,093 1,154


Assets Cash & cash equivalents 317 221 1,315 2,468 Account receivables 1,481 1,583 1,686 1,686 Other current assets (0) (0) 0 (0) Total current assets 2,026 2,062 3,255 4,408 Total fixed assets - - - - Investment securities - - - - Total assets 14,255 13,855 13,875 13,875 Liabilities Total current liabilities 663 568 588 588 Total liabilities 7,425 7,025 7,045 7,045 Shareholder equity 6,830 6,830 6,830 6,830 Total liabilities and equity 14,255 13,855 13,875 13,875 Net debt 6,445 6,236 5,143 3,989

Per share 12/17A 12/18E 12/19E 12/20E


Earnings 12/17A 12/18E 12/19E 12/20E


Valuation 12/17A 12/18E 12/19E 12/20E


Returns 12/17A 12/18E 12/19E 12/20E


Gearing 12/17A 12/18E 12/19E 12/20E

Net debt/equity (%) 94.4 91.3 75.3 58.4 Interest coverage ratio (X) 7.1 7.2 7.8 8.1


Company Background

Labcorp is a provider of diagnostic testing information services and clinical research organization services.



Better fundamental performance or sentiment could drive upside to our target price with a blue sky scenario of $236 for LH.


Weaker fundamental performance or sentiment could lead to downside versus our target price with a grey sky scenario of $158 for LH.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$154.42


24 August 2018



Medpace Holdings, Inc. (MEDP) Rating OUTPERFORM Price (23-Aug-18, US$) 55.05 Target price (US$) (from 61.00) 62.00 52-week price range (US$) 61.37 - 30.81 Market cap(US$ m) 1,958 Enterprise value (US$ m) 2,083 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]


212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]




commentary from industry constituents, we raise the target price of Medpace

Holdings to $62 (from $61). Risks to our call include a tightening in biotech

funding, other R&D demand shifts, delays/cancellations.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$32.24



Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 1.51 2.36 2.62 2.92 Prev. EPS (US$) - - - - P/E rel. (%) 167.0 131.8 130.7 129.1 Revenue (US$ m) 386.5 689.7 754.3 826.9 EBITDA (US$ m) 108.0 125.9 136.4 150.1 OCFPS (US$) 2.45 3.05 2.96 3.48 P/OCF (x) 14.8 18.1 18.6 15.8 EV/EBITDA (current) 19.8 16.5 14.7 12.8 Net debt (US$ m) 179 125 53 -43 ROIC (%) 9.27 13.32 14.47 16.33

Number of shares (m) 35.57 IC (current, US$ m) 682.16 BV/share (Next Qtr., US$) - EV/IC (x) - Net debt (Next Qtr., US$ m) - Dividend (current, US$) - Net debt/tot eq (Next Qtr.,%) - Source: Company data, Thomson Reuters, Credit Suisse estimates

24 August 2018


Medpace Holdings, Inc. (MEDP)



Revenue (US$ m) 386.5 689.7 754.3 826.9 EBITDA (US$ m) 108 126 136 150 Depr. & amort. (9) (9) (10) (10) EBIT (US$) 99 117 127 140 Net interest exp (5) (6) (6) (6) PBT (US$) 95 111 122 136 Income taxes (34) (26) (28) (31) Profit after tax 60 86 94 105 Minorities - - - - Reported net income (US$) 60 86 94 105 Other NPAT adjustments 0 0 0 0 Adjusted net income 60 86 94 105

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 99 117 127 140 Net interest (5) (6) (6) (6) Change in working capital 13 5 (4) 3 Cash from operations 97 111 106 124 Cash flow from operations 97 111 106 124 CAPEX (12) (31) (34) (29) Free cashflow to the firm 86 79 72 96 Acquisitions 0 0 0 0 Divestments - - - - Cash flow from investments (12) (31) (34) (29) Net share issue(/repurchase) (154) (23) 2 2 Dividends paid 0 0 0 0 Other (2) (2) (2) (2) Cashflow from financing activities (98) (83) 1 (0) Changes in Net Cash/Debt (65) 53 72 95


Assets Cash & cash equivalents 26 22 95 191 Account receivables 83 119 120 129 Other current assets 20 21 21 21 Total current assets 130 162 236 341 Total fixed assets 49 69 93 112 Investment securities - - - - Total assets 951 973 1,043 1,136 Liabilities Total current liabilities 193 231 229 241 Total liabilities 447 425 422 432 Shareholder equity 504 548 621 704 Total liabilities and equity 951 973 1,043 1,136 Net debt 179 125 53 (43)

Per share 12/17A 12/18E 12/19E 12/20E


Earnings 12/17A 12/18E 12/19E 12/20E

Sales growth (%) 4.3 78.5 9.4 9.6 EBIT growth (%) (6.1) 17.2 8.7 10.9 Net profit growth (%) 8.0 42.4 9.8 11.3 EPS growth (%) (1.4) 56.0 11.1 11.5 EBITDA margin (%) 28.0 18.3 18.1 18.2 EBIT margin (%) 25.7 16.9 16.8 17.0 Pretax margin (%) 24.5 16.2 16.2 16.5 Net margin (%) 15.6 12.4 12.5 12.7

Valuation 12/17A 12/18E 12/19E 12/20E


Returns 12/17A 12/18E 12/19E 12/20E


Gearing 12/17A 12/18E 12/19E 12/20E

Net debt/equity (%) 35.5 22.9 8.5 (6.1) Interest coverage ratio (X) 20.7 18.2 20.4 22.6


Company Background

Medpace is a full-service, therapeutically-focused Contract Research Organization (CRO) covering Phases I-IV development services for the biopharmaceutical and medical device industries.



Our $74/share blue sky target for MEDP assumes a significant acceleration in organic sales growth, a healthy funding environment, an increase in profitability, successful new service offerings, substantial new business wins, and continued strong outsourced demand from small/mid-sized biotech customers.


Our $50/share grey sky target for MEDP assumes a deceleration in sales growth, a decline in profitability, weakening demand from small/mid-sized biotech customers, customer consolidation, and a slowdown in overall R&D spending.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$32.24


24 August 2018



PRA Health Sciences, Inc. (PRAH) Rating OUTPERFORM Price (23-Aug-18, US$) 104.47 Target price (US$) (from 107.00) 115.00 52-week price range (US$) 107.70 - 73.85 Market cap(US$ m) 6,725 Enterprise value (US$ m) 7,903 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]


212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]




commentary from industry constituents, we raise the target price of PRA

Health Sciences to $115 (from $107). Risks to our call include a tightening in

biotech funding, other R&D demand shifts, deal integration.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$75.99



Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 3.33 4.18 4.78 5.39 Prev. EPS (US$) - - - - P/E rel. (%) 144.1 141.3 136.1 133.0 Revenue (US$ m) 1,948.4 2,907.5 3,224.2 3,550.3 EBITDA (US$ m) 362.7 454.5 511.6 568.6 OCFPS (US$) 5.51 6.87 7.68 8.47 P/OCF (x) 16.5 15.2 13.6 12.3 EV/EBITDA (current) 21.7 17.4 15.0 13.5 Net debt (US$ m) 1,153 1,178 934 934 ROIC (%) 11.81 14.79 18.85 21.16


24 August 2018


PRA Health Sciences, Inc. (PRAH)



Revenue (US$ m) 1,948.4 2,907.5 3,224.2 3,550.3 EBITDA (US$ m) 363 455 512 569 Depr. & amort. (29) (43) (48) (48) EBIT (US$) 334 412 464 521 Net interest exp (38) (48) (45) (45) PBT (US$) 296 364 419 476 Income taxes (77) (88) (101) (115) Profit after tax 219 276 318 362 Minorities - - - - Reported net income (US$) 219 276 318 362 Other NPAT adjustments 0 0 0 0 Adjusted net income 219 276 318 362

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 334 412 464 521 Net interest (38) (48) (45) (45) Change in working capital - - - - Cash flow from operations 363 455 512 569 CAPEX (1,100) (75) (77) (77) Free cashflow to the firm (738) 380 434 491 Acquisitions - - - - Divestments - - - - Cash flow from investments (1,100) (75) (77) (77) Net share issue(/repurchase) - - - - Dividends paid 0 0 0 0 Changes in Net Cash/Debt (466) (24) 244 0


Assets Cash & cash equivalents 192 123 367 367 Account receivables 158 158 158 158 Other current assets 0 0 (0) (0) Total current assets 350 281 525 525 Total fixed assets - - - - Investment securities - - - - Total assets 2,347 2,312 2,319 2,319 Liabilities Total current liabilities 65 75 82 82 Total liabilities 1,410 1,376 1,383 1,383 Shareholder equity 936 936 936 936 Total liabilities and equity 2,347 2,312 2,319 2,319 Net debt 1,153 1,178 934 934

Per share 12/17A 12/18E 12/19E 12/20E

No. of shares (wtd avg) 66 66 67 67 CS adj. EPS 3.33 4.18 4.78 5.39 Prev. EPS (US$) - - - - Dividend (US$) 0.00 0.00 0.00 0.00 Free cash flow per share (11.22) 5.73 6.52 7.32

Earnings 12/17A 12/18E 12/19E 12/20E


Valuation 12/17A 12/18E 12/19E 12/20E


Returns 12/17A 12/18E 12/19E 12/20E


Gearing 12/17A 12/18E 12/19E 12/20E



Company Background

PRA Health Sciences, Inc. is a contract research organization (CRO). The Company provides outsourced clinical development services to the biotechnology and pharmaceutical industries.



Our $138/share blue sky scenario assumes a more meaningful acceleration in profit margin NT, faster and more material near term revenue generation from recent awards, and additional strategic partnerships, all predicated on continued healthy industry dynamics.


Our $92/share grey sky scenario assumes a meaningful deceleration in profit margin, less revenue generation from recent awards than expected, project cancellations, client losses, customer consolidation, and a slowdown in R&D outsourcing demand.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$75.99


24 August 2018



Syneos Health (SYNH) Rating OUTPERFORM Price (23-Aug-18, US$) 48.90 Target price (US$) (from 53.00) 54.00 52-week price range (US$) 59.05 - 31.70 Market cap(US$ m) 5,031 Enterprise value (US$ m) 7,717 Target price is for 12 months.

Research Analysts

Erin Wilson Wright

212 538 4080

[email protected]


212 538 1822

[email protected]

Katie Tryhane

212 325 2713

[email protected]




commentary from industry constituents, we raise the target price of Syneos

Health to $54 (from $53). Risks to our call include a tightening in biotech

funding, other R&D demand shifts, cancellations, integration headwinds.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$56.15



Year 12/17A 12/18E 12/19E 12/20E EPS (CS adj.) (US$) 2.26 2.68 3.14 3.59 Prev. EPS (US$) - - - - P/E rel. (%) 99.4 103.2 97.0 93.5 Revenue (US$ m) 3,102.1 4,419.1 4,772.4 5,178.5 EBITDA (US$ m) 580.6 582.3 636.3 700.7 OCFPS (US$) 5.50 5.59 6.20 6.82 P/OCF (x) 7.9 8.7 7.9 7.2 EV/EBITDA (current) 13.3 13.3 12.1 11.0 Net debt (US$ m) 2,686 2,686 2,686 2,686 ROIC (%) 11.02 12.27 13.58 14.98


24 August 2018


Syneos Health (SYNH)



Revenue (US$ m) 3,102.1 4,419.1 4,772.4 5,178.5 EBITDA (US$ m) 581 582 636 701 Depr. & amort. (76) (71) (70) (76) EBIT (US$) 505 512 566 624 Net interest exp (144) (127) (121) (116) PBT (US$) 361 384 445 508 Income taxes (123) (106) (122) (140) Profit after tax 238 279 322 368 Minorities - - - - Reported net income (US$) 238 279 322 368 Other NPAT adjustments 0 0 0 0 Adjusted net income 238 279 322 368

Cash Flow 12/17A 12/18E 12/19E 12/20E

EBIT 505 512 566 624 Net interest (144) (127) (121) (116) Change in working capital - - - - Cash flow from operations 581 582 636 701 CAPEX 0 (65) 0 (69) Free cashflow to the firm 581 517 636 632 Acquisitions - - - - Divestments - - - - Cash flow from investments 557 (65) 0 (69) Net share issue(/repurchase) - - - - Dividends paid 0 0 0 0 Changes in Net Cash/Debt (2,292) 0 0 0


Assets Cash & cash equivalents 321 321 321 321 Account receivables 457 457 457 457 Other current assets 0 0 0 0 Total current assets 778 778 778 778 Total fixed assets - - - - Investment securities - - - - Total assets 5,071 5,071 5,071 5,071 Liabilities Total current liabilities 59 59 59 59 Total liabilities 4,735 4,735 4,735 4,735 Shareholder equity 335 335 335 335 Total liabilities and equity 5,071 5,071 5,071 5,071 Net debt 2,686 2,686 2,686 2,686

Per share 12/17A 12/18E 12/19E 12/20E


Earnings 12/17A 12/18E 12/19E 12/20E

Sales growth (%) (4.3) 42.5 8.0 8.5 EBIT growth (%) (3.0) 1.4 10.6 10.3 Net profit growth (%) 32.4 16.9 15.7 14.3 EPS growth (%) 32.4 18.6 17.3 14.3 EBITDA margin (%) 18.7 13.2 13.3 13.5 EBIT margin (%) 16.3 11.6 11.9 12.1 Pretax margin (%) 11.6 8.7 9.3 9.8 Net margin (%) 7.7 6.3 6.8 7.1

Valuation 12/17A 12/18E 12/19E 12/20E


Returns 12/17A 12/18E 12/19E 12/20E


Gearing 12/17A 12/18E 12/19E 12/20E



Company Background

SYNH is a global contract research organization (CRO) operating in both the clinical drug development and commercialization markets. Following its merger with inVentiv Health, it is the second largest CRO and largest CCO (contract commercial organization)



Our $65/share blue sky scenario for SYNH assumes continued industry leading growth, sustainability of a relatively superior profit profile, substantially greater new business wins, new partnerships with large pharma clients and sizable project awards, lower than expected cancellations, continued strength in R&D spending and outsourcing demand, and cross-selling opportunities related to its merger with inVentiv Health (Aug. 1 2017).

Our Grey Sky Scenario (US$) 28.00

Our $28/share grey sky scenario for SYNH assumes a deceleration in growth, a decline in its profit trajectory, share losses, weakening demand from small/mid-sized biotech customers, increased cancellations, customer consolidation, headwinds related to its inVentiv integration, and a slowdown in R&D spending and outsourced demand.



Daily Aug24, 2017 - Aug23, 2018, 08/24/17 = US$56.15


24 August 2018


Companies Mentioned (Price as of 23-Aug-2018) Charles River Laboratories International Inc. (CRL.N, $121.96) ICON PLC (ICLR.OQ, $144.48, OUTPERFORM, TP $159.0) IQVIA Holdings, Inc. (IQV.N, $124.39, OUTPERFORM, TP $137.0) LabCorp of America (LH.N, $175.92, OUTPERFORM, TP $197.0) Medpace Holdings, Inc. (MEDP.OQ, $55.05, OUTPERFORM, TP $62.0) PRA Health Sciences, Inc. (PRAH.OQ, $104.47, OUTPERFORM, TP $115.0) Syneos Health (SYNH.OQ, $48.9, OUTPERFORM, TP $54.0)

Disclosure Appendix

Analyst Certification I, Erin Wilson Wright, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

3-Year Price and Rating History for ICON PLC (ICLR.OQ)

ICLR.OQ Closing Price Target Price

Date (US$) (US$) Rating

28-Oct-15 67.09 84.00 O

19-Feb-16 70.25 NR

20-Jun-16 64.59 80.00 O *

20-Oct-16 84.73 84.00

16-Feb-17 87.78 90.00

27-Apr-17 83.17 91.00

06-Jun-17 96.58 102.00

27-Jul-17 105.83 105.00

16-Oct-17 115.68 120.00

26-Oct-17 122.79 122.00

09-Jan-18 118.72 128.00

15-Feb-18 113.86 131.00

19-Jun-18 135.81 144.00

* Asterisk signifies initiation or assumption of coverage.

3-Year Price and Rating History for IQVIA Holdings, Inc. (IQV.N)

IQV.N Closing Price Target Price


02-Nov-15 66.05 82.00 O

19-Feb-16 63.43 NR

31-Mar-17 80.53 89.00 O *

03-May-17 82.64 91.00

17-May-17 82.22 94.00

06-Jun-17 87.09 96.00

03-Aug-17 91.10 98.00

16-Oct-17 99.33 110.00

26-Oct-17 105.50 115.00

31-Oct-17 108.10 125.00

24-Jul-18 118.38 128.00


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3-Year Price and Rating History for LabCorp of America (LH.N)

LH.N Closing Price Target Price


27-Oct-15 120.67 145.00 O

19-Feb-16 108.72 NR

15-Mar-16 112.58 133.00 O *

25-Apr-16 125.10 135.00

09-Jun-16 131.19 143.00

27-Jul-16 137.60 152.00

26-Oct-16 126.46 148.00

25-Apr-17 138.89 146.00

12-Jul-17 152.45 146.00 *

13-Jul-17 152.42 169.00

26-Jul-17 161.17 172.00

11-Dec-17 155.79 170.00

19-Jan-18 174.39 190.00

28-Feb-18 172.70 192.00

07-Mar-18 171.45 195.00


3-Year Price and Rating History for Medpace Holdings, Inc. (MEDP.OQ)

MEDP.OQ Closing Price Target Price


06-Sep-16 30.48 35.00 O *

17-Jan-17 34.78 40.00

01-May-17 32.39 35.00

06-Jun-17 28.10 36.00

16-Oct-17 33.42 38.00

27-Nov-17 36.14 R

01-Dec-17 32.46 38.00 O

03-Jan-18 37.27 41.00

27-Feb-18 32.02 42.00

30-Jul-18 47.07 49.00

02-Aug-18 59.46 61.00


3-Year Price and Rating History for PRA Health Sciences, Inc. (PRAH.OQ)

PRAH.OQ Closing Price Target Price


04-Nov-15 40.75 47.00 O

19-Feb-16 40.15 NR

20-Jun-16 42.73 43.00 N *

12-Sep-16 51.74 50.00

06-Feb-17 58.90 67.00 O

22-Feb-17 59.98 69.00

06-Jun-17 72.59 76.00

07-Jun-17 73.41 80.00

07-Aug-17 74.23 84.00

16-Oct-17 83.37 90.00

25-Oct-17 80.49 93.00

03-Jan-18 90.44 101.00

21-Feb-18 88.99 104.00

01-Aug-18 104.82 107.00


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3-Year Price and Rating History for Syneos Health (SYNH.OQ)

SYNH.OQ Closing Price Target Price


30-Oct-15 41.71 54.00 O

01-Dec-15 47.61 R

02-Dec-15 43.38 54.00 O

20-Jun-16 38.18 51.00 *

16-Aug-16 45.38 R

17-Aug-16 45.38 51.00 O

10-Nov-16 50.05 55.00

10-May-17 52.80 R

10-Aug-17 54.90 NR

11-Oct-17 54.75 68.00 O

13-Nov-17 36.95 54.00

03-Jan-18 43.80 52.00

28-Feb-18 41.90 54.00

09-May-18 38.50 50.00

02-Aug-18 53.55 53.00


As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outp erforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ra tings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outper forms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportuniti es. For Latin American and Asia stocks (excluding Japan and Australia), ratings are based on a stock’s total return relative to the average total return of the relevant country or r egional benchmark (India - S&P BSE Sensex Index); prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform wh ere an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July 2011. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time. Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cov er multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 49% (63% banking clients) Neutral/Hold* 37% (58% banking clients) Underperform/Sell* 12% (53% banking clients) Restricted 2% *For purposes of the NYSE and FINRA ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determine d on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdin gs, and other individual factors.

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Target Price and Rating Valuation Methodology and Risks: (12 months) for ICON PLC (ICLR.OQ)

Method: Our $159 target price for ICLR is 23.6x our 2019 EPS estimate, in line with the industry. Our Outperform rating reflects the above-average upside we expect versus the industry.

Risk: Risks to our $159 target price and Outperform rating for ICLR are customer concentration, acquisition risk, fundamental demand fluctuations, potential partnership shifts, foreign currency fluctuations, and changing government regulations.

Target Price and Rating Valuation Methodology and Risks: (12 months) for IQVIA Holdings, Inc. (IQV.N)

Method: Our $137 target price and Outperform rating for IQV is 22.3x our 2019 EPS estimate, a premium to its CRO industry peers, to reflect its leading size, scale, and unique competitive advantages in data and technology offerings post IMS merger.

Risk: Risks to our Outperform rating and $137 target price include potential integration headwinds, lower R&D spending from core pharmaceutical customers, weakening biopharma demand for outsourcing, industry and customer consolidation, foreign exchange fluctuations, and risks in data integrity, privacy.

Target Price and Rating Valuation Methodology and Risks: (12 months) for LabCorp of America (LH.N)

Method: Our $197 price target for LH assumes shares can trade at roughly 11.8x our 2019 EBITDA estimate of $2.2B. Given better strategic visibility following the Covance acquisition and our favorable views of the informatics capabilities of the company, we believe an Outperform rating is warranted.

Risk: Risks to our $197 target price and Outperform rating for LabCorp are: (1) further pricing pressure in managed care/commercial contracts; (2) ability to maintain and expand industry-leading margins; (3) integration difficulties with the Chiltern/CVD deals or issues related to these acquisitions; (4) potential government reimbursement changes and cuts via legislation and through competitive bidding; (5) hospital and lab competition; and (6) difficulties with recent acquisitions.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Medpace Holdings, Inc. (MEDP.OQ)

Method: Our $62 target price and Outperform rating for MEDP is based on a 2019 P/E multiple of 23.6x, a more meaningful disparity to its peer group, which we view as warranted given its industry-leading topline growth and profit margin profiles.

Risk: Risks to our $62 target price and Outperform rating are slower revenue or earnings growth from changes, cancellations or delays in projects, moderation in R&D spending trends and outsourcing, weakness in the biotechnology funding environment, negative regulatory shifts, potential negative risks inherent in being a controlled company, and acquisition risks.

Target Price and Rating Valuation Methodology and Risks: (12 months) for PRA Health Sciences, Inc. (PRAH.OQ)

Method: Our Outperform rating and $115 target price for PRAH is 24.1x our estimated 2019 EPS, reflecting its competitive advantages in a highly diverse customer mix and an increasingly broad and flexible service offering, as well as contributions from recent partnerships.

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Risk: Risks to our $115 target price and Outperform rating for PRAH are the concentration of share ownership, acquisition risk, a slowdown or meaningful acceleration in biopharmaceutical R&D spending and/or outsourcing demand, and customer/contract exposure/wins.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Syneos Health (SYNH.OQ)

Method: Our $54 target price and Outperform rating for SYNH are based on 17.2x our estimated 2019 EPS, in-line with the industry average owing to its industry leading growth trajectory and superior profit and ROIC profile. We rate SYNH Outperform as we expect it to appreciate more than its peers.

Risk: Risks to our $54 target price and Outperform rating for SYNH are customer concentration, acquisition risk, controlled company status, slower revenue or earnings growth from changes, cancellations or delays in projects, moderation in R&D spending trends and outsourcing, negative regulatory shifts, and weakness in the biotechnology funding environment.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures/view/selectArchive for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names Credit Suisse currently has, or had within the past 12 months, the following as investment banking client(s): LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ, IQV.N Credit Suisse provided investment banking services to the subject company (LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ, IQV.N) within the past 12 months. Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non-investment-banking, securities-related: LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ Credit Suisse has managed or co-managed a public offering of securities for the subject company (MEDP.OQ) within the past 12 months. Within the past 12 months, Credit Suisse has received compensation for investment banking services from the following issuer(s): LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ, IQV.N, CRL.N) within the next 3 months. Within the last 12 months, Credit Suisse has received compensation for non-investment banking services or products from the following issuer(s): LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ Credit Suisse or a member of the Credit Suisse Group is a market maker or liquidity provider in the securities of the following subject issuer(s): CRL.N, ICLR.OQ, IQV.N, LH.N, MEDP.OQ, PRAH.OQ, SYNH.OQ A member of the Credit Suisse Group is party to an agreement with, or may have provided services set out in sections A and B of Annex I of Directive 2014/65/EU of the European Parliament and Council ("MiFID Services") to, the subject issuer (ICLR.OQ, LH.N, MEDP.OQ, SYNH.OQ, PRAH.OQ, IQV.N, CRL.N) within the past 12 months.

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This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising from their use of this report or its content. Principal is not guaranteed. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. No information or communication provided herein or otherwise is intended to be, or should be construed as, a recommendation within the meaning of the US Department of Labor’s final regulation defining "investment advice" for purposes of the Employee Retirement Income Security Act of 1974, as amended and Section 4975 of the Internal Revenue Code of 1986, as amended, and the information provided herein is intended to be general information, and should not be construed as, providing investment advice (impartial or otherwise). Copyright © 2018 CREDIT SUISSE AG and/or its affiliates. All rights reserved.

Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments. When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

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24 August 2018 Americas/United States Healthcare