Quintiles' (Q) OCE Software To Simplify Commercial Functions

In an initiative to streamline pharmaceutical commercial functions, QuintilesIMS (NYSE:Q) announced the general availability of Orchestrated Customer Engagement (OCE), a SaaS software. The software is expected to be available by this winter.

OCE eases out the commercial functions of multi-channel marketing, customer relationship management, medical affairs and market access.

We expect OCE SaaS software to strengthen the company’s commercial solutions business, which grew just 2.4% in the last reported quarter. Growth in the segment was impacted by the lackluster performance of the legacy Quintile Encore business, which declined over 50% year over year. The latest pharmaceutical-commercial development is likely to bolster the company’s footprint in the niche markets.

Notably, OCE leverages on Quintiles’ flagship Ada (an artificial-intelligence feature), Apollo and Lexi features. Lexi is an application program interface (API) layer that connects all applications across an enterprise. Per management, OCE’s unique procedure of task integration, decision making and sales and marketing convergence makes it highly unique in the niche space.

Meanwhile, we are upbeat on the company’s solid full-year guidance. The company expects total revenue in the band of $8 billion to $8.1 billion and adjusted EBITDA in the range of $2 billion to $2.1 billion.

Stock Performance

Despite the positive development, shares of Quintiles inched 1% down to close at $90.18, following the news release. In fact, Quintiles’s performance lacked luster over the last one month. The company gained just 4.9%, lower than the Zacks categorized Medical Services sub-industry’s addition of almost 7.9%.

However, the current level compares favorably with the S&P 500’s return of just 1.1% over the same time frame. This, together with a long-term expected earnings growth rate of 12.9%, instills confidence in investors.

Furthermore, the estimate revision for the stock has been favorable. The year has seen seven estimates move north over the last two months, compared with no movement in the opposite direction. As a result, full-year estimates rose 1.1% to $4.53 over the same time frame.

Quintiles carries a Zacks Rank #3 (Hold).

Key Picks

Better-ranked stocks in the broader medical sector include Inogen Inc. (NASDAQ:INGN) , CryoLife, Inc. (NYSE:CRY) and Luminex Corporation (NASDAQ:LMNX) . Notably, Inogen and Luminex sport a Zacks Rank #1 (Strong Buy), while CryoLife carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.50%. Notably, the stock represents an impressive one-year return of 99.5%.

Luminex has a long-term expected earnings growth rate of 16.25%. Additionally, the stock represents an impressive one-year return of 20.3%.

CryoLife represents a strong return of 70.3% over the last one year. The stock posted a positive earnings surprise of 80% in the last reported quarter.

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