IPO Report: PRA Health Sciences (PRAH)

Francis Gaskins  |

PRA Health Sciences (PRAH) is one of the world's leading global contract research organizations (CROs) by revenue, providing outsourced clinical development services to the biotechnology and pharmaceutical industries. It is based in Raleigh, NC.

Nine other new companies are scheduled for the week of Nov. 10, 2014. The full IPO calendar is available at IPOpremium.

SEC Documents

Manager, Joint-managers: Jefferies, Citigroup, KKR, UBS Investment Bank, Credit Suisse, and Wells Fargo Securities

Co-managers: Baird and William Blair

End of lockup (180 days): Tuesday, May 12, 2015

End of 40-day quiet period: Tuesday, December 23, 2014

PRAH scheduled a $400 million IPO with a market capitalization of $1.2 billion at a price range midpoint of $21.50 for Thursday, Nov. 13, 2014 on Nasdaq.

PRA Health Sciences IPO Report


PRAH is one of the world's leading global contract research organizations, or CROs, by revenue, providing outsourced clinical development services to the biotechnology and pharmaceutical industries.



Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos


PRA Health Sciences (PRAH)










Annualized rev growth of 105% based on Sept '13 acquisition

P/E of -71

Per share dilution -$38, 77% higher than IPO price

Price-to-tangible bk of -1.3

Pre-IPO debt/equity ratio is 1.3, means high interest payments

Price-to-bk of 1.7


PRAH is one of the world's leading global contract research organizations, or CROs, by revenue, providing outsourced clinical development services to the biotechnology and pharmaceutical industries.

PRAH believes it is one of a select group of CROs with the expertise and capability to conduct clinical trials across all major therapeutic areas on a global basis.

PRAH has therapeutic expertise in areas that are among the largest in pharmaceutical development, including oncology, central nervous system, inflammation and infectious diseases.

PRAH believes it provides its clients with one of the most flexible clinical development service offerings, which includes both traditional, project-based Phase I through Phase IV services as well as embedded and functional outsourcing services.

PRAH believes it further differentiates itself from its competitors through its investments in medical informatics and clinical technologies designed to enhance efficiencies, improve study predictability and provide better transparency for its clients throughout their clinical development processes.

PRAH is one of the largest CROs in the world by revenue, focused on executing clinical trials on a global basis. PRAH’s global clinical development platform includes more than 75 offices across North America, Europe, Asia, Latin America, South Africa, Australia and the Middle East and more than 10,000 employees worldwide. Since 2000, PRAH has performed approximately 2,300 clinical trials worldwide, it  has worked on more than 100 marketed drugs across several therapeutic areas and conducted the pivotal or supportive trials that led to FDA, or international regulatory approval, of more than 45 drugs.

PRAH is focused on further expansion into high growth, emerging markets, which is demonstrated by the formation of its 2012 joint venture with WuXi AppTec (Shanghai) Co. Ltd., or WuXi, a CRO managing clinical trials in Asia, and its 2013 acquisition of ClinStar, LLC, or ClinStar, a CRO managing clinical research trials in Eastern Europe.

PRAH believes it is a leader in the transformation of the CRO engagement model via its flexible clinical development service offerings, which include embedded and functional outsourcing services in addition to traditional, project-based clinical trial services.

September 2013 Acquisition

In September 2013, PRAH completed the acquisition of ReSearch Pharmaceutical Services, or RPS, a global CRO providing clinical development services primarily to large pharmaceutical companies, which provides a highly complementary fit with PRAH’s historical focus on biotechnology and small- to mid-sized pharmaceutical companies.

RPS, now known as PRAH’s  Strategic Solutions offerings, provides Embedded Solutions™ and functional outsourcing services in which PRAH’s teams are fully integrated within the client's internal clinical development operations and are responsible for managing functions across the entire breadth of the client's drug development pipeline.

PRAH believes that its Strategic Solutions offerings represent an innovative alternative to the traditional, project-based approach and allow its clients to maintain greater control over their clinical development processes.

PRAH’s flexible clinical development service offerings expand its addressable market beyond the traditional outsourced clinical development market to include the clinical development spending that biopharmaceutical companies historically have retained in-house.

Intellectual property

PRAH does not own any patent registrations, applications, or licenses. PRAH does maintain and protect trade secrets, know-how and other proprietary information regarding many of its business processes and related systems.

PRAH also holds various federal trademark registrations and pending applications, including PRA Health Sciences® (including a design) PRA® (including a design) and PRA International®.


PRAH competes primarily with other full-service CROs and in-house research and development departments of pharmaceutical and established biotech companies.

PRAH’s principal traditional CRO competitors are Covance Inc., ICON plc, INC Research, Inc., PAREXEL International Corporation, Pharmaceutical Product Development LLC, Quintiles Transnational Corp. and inVentiv Health Inc.

CROs compete on the basis of a number of factors, including reliability, past performance, expertise and experience in specific therapeutic areas, scope of service offerings, strengths in various geographic markets, technological capabilities, ability to manage large scale global clinical trials, and price.

5% shareholders pre-IPO

Investment funds affiliated with KKR      93.2%  


No dividends are planned.

Use of proceeds

PRAH expects to receive $343 million from its IPO and use it for the following:

to redeem $150.0 million aggregate principal amount of its Senior Notes for an amount equal to 109.5% of their face value, plus accrued and unpaid interest to, but not including, the redemption date, to repay approximately $165.0 million of borrowings under the Senior Secured Term Loan Facility and for general corporate purposes. To the extent that PRAH’s net proceeds from this offering are greater than or less than $343.0 million, PRAH expects to increase or decrease the repayment of borrowings under the Senior Secured Term Loan Facility accordingly.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
PRAH PRA Health Sciences Inc. 99.74 0.36 0.36 231,794 Trade



Symbol Last Price Change % Change










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