IQVIA Holdings, Inc.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the ICVIA fourth quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Nick Childs, Senior Vice President, Investor Relations and Treasury. Mr. Childs, please begin your conference.

Thank you very much. Good morning, everyone. Thank you for joining our fourth quarter 2023 earnings call. With me today are Ari Boosby, Chairman and Chief Executive Officer, Ron Bruman, Executive Vice President and Chief Financial Officer, Eric Sherbet, Executive Vice President and General Counsel, Mike Fedock, Senior Vice President, Financial Planning and Analysis, and Gustavo Peron, Senior Director, Investor Relations. Today, we will be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call in the events and presentation section of our IQVIA Investor Relations website at ir.iqvia.com. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements. Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to, and not a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. I would now like to turn the call over to our Chairman and CEO.

Thank you, Nick, and good morning, everyone. Thank you for joining us today to discuss our 2023 results. You saw that we had a good call. Let me start the call by sharing the latest of what we are seeing in our end markets, along with our key accomplishments for 2023. On the clinical side, demand from our R&DS clients remained strong. Net new bookings for the quarter exceeded $2.8 billion, the second largest quarter in IQVIA history, representing a quarterly book-to-bill of 1.31. Our quarterly RFP flow was up 13%, year over year, driven by EBP and large pharma. Our qualified pipeline grew double digits versus prior year. Emerging biotech funding was strong. According to BioWorld, fourth quarter EBP funding was $21.6 billion, the highest quarter in the last two years continuing the sequential improvement we've seen throughout the year. For the full year, EBP funding for 2023 was $70.9 billion, up 17% versus the prior year. And that represents the largest year on record if we exclude the outlier years of 20 and 21 when there was dramatic outspending due to COVID. As we close 2023, we're proud of what we have achieved in RMDS. The business booked $10.7 billion of net new business, including record high service bookings of $8.4 billion. Our backlog stands at $29.7 billion, and that's up 9% year over year. The business added nearly 400 net new customers in the year. We made great progress with our clinical research strategies. We significantly expanded our R&D site network and management organization. through strategic acquisitions that offer clinical research coordination, study feasibility, and patient recruitment capability. We further expanded the capabilities of the lab business through the launch of a new synthetic antibody discovery offering, which is differentiated from the traditional animal-derived antibodies that are used by our competitors. And we partnered with the Coalition for Epidemic Preparedness Innovations, CEPI, who enhanced the world's ability to rapidly conduct clinical research for vaccines and other biological countermeasures against emerging infectious diseases in underdeveloped countries. Turning to TAS, the commercial side of our business continues, of course, to face the macroenvironment that we've described in the past as our clients remain cautious with their spending and their cost containment. Our results in the quarter were slightly better than what we had expected, although discretionary spending has not yet rebounded to the levels that we expect they will, and it continues to be a headwind. Fundamentally, Leading market indicators do point to an upcoming improvement. For instance, the FDA approved 55 new molecules in 2023, and that's almost 50% more than the prior year, and it is the highest level since 2018. The spend on new drug launches by our pharma clients is expected to be over $190 billion over the next five years. That's up over 25% compared to the prior five-year period. Frankly, in our own engagement with customers in the recent past, we noted an improved customer sentiment during the quarter. In fact, the pipeline of opportunities remains strong, even as decision timelines remain elongated and negotiations more difficult, similar to what we indicated last quarter. Based on these dynamics, we continue to expect demand to pick up, but not before the second half of the year. And as a result, we may see the 2024 sequential trend for TAS to be the inverse of what we experienced in 2023. So you might see revenue growth in the first quarter that resembles the growth of the fourth quarter of 2023, and growth to gradually improve as we move to the back end of the year. Now, despite the more difficult macro environment, the TAS business had some significant achievements in 2023. We continued expanding our commercial technology and analytics offerings. We, in fact, added 33 new clients on our OCE technology platform. We successfully launched a new software platform which tracks the performance of 1.6 million drugs covering 600 diseases across 93 countries. We successfully introduced a first-in-kind medtech consumption offering. that supports the complex journey that medical devices take as they travel from manufacturer to healthcare providers. And we acquired quality metric to extend our suite of patient health measurement tools using clinical outcome assessment and patient reported outcomes. Let me now turn to the results for the quarter. Revenue for the fourth quarter grew 3.5% on a reported basis and 2.6 at constant currency. Compared to last year and excluding COVID-related work from both periods, we grew the top line approximately 6% on a constant currency basis, including approximately a point and a half of contribution from acquisitions. Fourth quarter adjusted EBITDA increased 5%. reflecting our ongoing cost management discipline. Fourth quarter adjusted diluted EPS of $2.84 faced the continuing headwind of the step up in interest expense and the UK corporate tax rate increase. Excluding the impact of these items, our adjusted diluted EPS growth was 11%. Now a few highlights of this business activity this quarter. Let's start with us. A mid-sized pharma client awarded IQVIA a four-year outsourcing program to support their lifecycle strategy of converting established brands to over-the-counter sales in more than 40 countries. Similarly, IQVIA won a four-year contract with a large pharma client to provide global market intelligence via a single, globally accessible source of commercial data. we won a significant contract with a large pharma in their dermatology, rheumatology, and oncology therapeutic areas. This program will allow our client to access detailed prescribing patterns in local markets and enhance HCP targeting in 18 countries. The CDC selected IQVIA to provide comprehensive monitoring services following the end of the COVID public health emergency status. IQVIA will support the CDC in analyzing data in real-time on the respiratory virus response, including for influenza and RSV, identifying at-risk groups and improving overall population health. In the quarter, our patient services business, which is showing faster growth within our TAS segment, secured a significant contract with a large pharma that includes adherence monitoring, co-pay support, and at-home treatment administration. In our real-world business, the National Health Service of England awarded IQVIA a large contract to deploy our privacy technology and to enable the NIH's efforts to ensure the highest standards of patient data governance and privacy controls. Moving to RDS, a top five pharma client selected IQVIA as a key clinical FSP provider. Noteworthy here is that a competitor of ours had been the 100% sole provider previously. This partnership will help the client improve clinical trial oversight and manage costs more effectively. In Q4, another top five client awarded IQVIA a full-service phase two study on ALS, also known as Lou Gehring's disease. IQVIA was selected due to our vast expertise in ALS disease as well as our faster recruitment timelines. In the quarter, a biotech client selected IQVIA to conduct a complex trial for a promising cell and gene therapy targeting myositis, which is an autoimmune disease. We were selected due to our AI capabilities that allow us to identify sites and develop an innovative trial strategy. Also in the quarter, IQVIA expanded its partnership with a major pharma company by securing six new global oncology trials consisting of a mix of early and late-stage trials. We were chosen due to our expertise in oncology and our ability to efficiently manage large, complex trials. A leading biotech firm selected IQVIA to conduct a program comprised of three initial stage studies in cancer research. The client is expanding from local to global development and needed a large-scale partner like IQVIA. In Q4, IQVIA was awarded a major contract from a top 10 global pharma to become its primary pharma covigilance platform provider. This multi-year program includes replacing the legacy systems with IQVS drug safety monitoring technology, which uses generative AI capability to automatically extract adverse event information from unstructured data sources. Finally, and before I turn it to Ron for a detailed financial review, I would like to take the opportunity to acknowledge and congratulate our employees around the world for the nice recognition the company just received. For the seventh consecutive year, IQVIA was named one of the world's most admired companies in Fortune's annual survey. And for the third year in a row, IQVIA was named the number one most admired company in our category. Lastly, before turning it over to Ron, I'd like to specifically mention the prestigious recognition received by Christina Mack, one of IQVIA's senior leaders who is the chief scientific officer for our real world business. Christina was named 2023 Pharma Voice 100 honoree to the peer-recognized industry-wide honor. We're very proud at IQVIA of Christina's work and her passion for accelerating innovation in healthcare through the use of evidence-based decision making. Let me now turn it to Ron for our financial review.