Biotech related concerns are overblown, says Baird after decline in CRO stocks

Medpace Holdings

28/02/2022 15:08

** Brokerage Baird says concern about impact of weakness in
biotech funding on contract research organizations (CROs) are
overblown
    ** Adds all contract drug developers, except Medpace
Holdings  MEDP.O , have low minimal exposure of about 10-15% to
biotech sector in terms of clients; MEDP has about 70% exposure
    ** "Even if this 'weak' biotech funding continues and tiny
clients experience future financial strain, exposure to this
susceptible client base would likely have a very limited impact
to fundamentals for all but MEDP," says Baird
    ** Shares of CROs such as IQVIA Holdings  IQV.N , ICON PLC
 ICLR.O  and Syneos Health  SYNH.O  had also fallen after their
results in mid-Feb on MEDP's management commentary on the impact
of a decline in biotech funding  urn:newsml:reuters.com:*:nL4N2UR3J4
    ** Shares of these CROs are down 17-30% YTD, with MEDP the
worst hit, while SPDR S&P Biotech ETF  XBI.P  is down nearly 21%

 (Reporting by Leroy Leo in Bengaluru)
 ((Leroy.Dsouza@thomsonreuters.com ; Twitter: https://twitter.com/LeroyLeo7;))