Covance revenue hit hard as COVID-19 continues to drag on trial services

Covance’s sales fell into the red this quarter as LabCorp’s CRO unit continues to battle major pandemic headwinds.

The Covance business made $1.09 billion for the second quarter, a decrease of 2.9% from the $1.13 billion it notched a year ago.  

The drop in total, organic revenue was in fact down by 5.2% (this was partially offset by a buyout it made), predominately because of the effects of the pandemic on its trial services.

But Covance is not out of the woods for its clinical trials biz: “The pandemic continues to cause delays in clinical trial progression and associated testing, reductions in investigator site access, as well as interruptions to the supply chain particularly impacting the nonclinical business unit,” it said in its financials, which are part of parent LabCorp’s second-quarter update.

There are some positives revenue-wise, however, as this drop was partially offset by a 1.1% boost coming out of its molecular COVID-19 testing through the so-called Central Laboratories unit.

Net orders and net book-to-bill during the trailing 12 months were $6.11 billion and 1.32, respectively. Backlog at the end of the quarter was $11.79 billion compared to $11.3 billion last quarter, with Covance seeing $4 billion worth of its backlog to convert into revenue in the next year.

LabCorp said that when it comes to its CRO unit, “while it is expected that the pandemic will continue to negatively impact its business, this impact is expected to subside throughout the year through continuing to work on projects supporting global vaccine and treatment development, with additional support from growth of COVID-19 testing.”

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