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ICON plc November 2009

ICON plc November 2009. Forward Looking Statements.

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ICON plc November 2009

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  1. ICON plc November 2009

  2. Forward Looking Statements Certain statements contained herein including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, constitute forward-looking statements concerning the Company's operations, performance, financial condition and prospects. Because such statements involve known and unknown risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation includes selected non-GAAP financial measures. For a presentation of the most directly comparable GAAP financial measures, please refer to the Quarter 3 2009 press release consolidated income statement headed Consolidated Income Statements (Unaudited) (US GAAP)

  3. Global Full Service Clinical Development

  4. ICONs Global Footprint

  5. ICON Plc Staff Growth 1990 - Today

  6. Market Environment

  7. Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance

  8. Increased Outsourcing • Clients are increasingly focused on their core competencies of • Discovery • Strategic Development • Marketing • Clients are engaging CROs at a more strategic level • Level of management engagement (Executive to executive) • Level of co-operative engagement i.e. sharing drug pipeline intentions • Deeper reliance on CRO scientific and therapeutic expertise • Reduced internal capacity in the companies of strategic partners e.g. staff or asset transfers/reductions • Clients likely to move their % outsourced from ≈ 30% to >50% over the next 5+ years

  9. Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance

  10. Clinical Compounds in Development

  11. R&D Spending Growth

  12. CRO Market Size 1996 – 2012 (E)

  13. Total Biotech Funding ($ Millions)

  14. Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance

  15. Opportunities…. but also Risks ICON in this Market Environment

  16. Net New Business Wins and Book to Bill Ratio Book to Bill Ratio Net Business Wins

  17. Analysis of Business Wins Q3 09 Net Wins YTD 09 Net Wins

  18. Analysis of Backlog by client Q3 09

  19. Total Backlog Level ($ Millions) 6%

  20. Coverage of next 4 quarters from Backlog Value of backlog forecast to be earned in next 4 quarters

  21. Projects of Longer duration lead to slower backlog burn

  22. Strategy

  23. ICON’s Core Strategy is Organic Growth,with acquisitions made to add new services or scale • Capitalise on market fundamentals to drive organic growth in all business units. • Cross-sell services to grow sales and margin • Build Deep Strategic Relationships • Create Stronger differentiation across our services • Retain a flexible business model to respond to differing client outsourcing strategies • Pursue acquisitions to enhance depth and scale of current operations and to add additional complementary services e.g. • Safety/Late Phase • Imaging • Japan • Acquisitions to date – 13 • Revenues acquired $130m • Staff acquired – 1,200 • => Organic growth >80% • Phase I • Bioanalytical / Biomarkers • Therapeutic specialists

  24. Market Feedback

  25. ICON in recent Surveys • “ICON is one of three CRO’s cited most frequently as sponsor’s favourite CRO vendors” • “Our confidence goes up that ICON is the right name to own in this environment, given their consistent quality” • ““ ICON is a darling of the industry, the company's stunning growth in 2006 and 2007 surprised its peers. Now, the Dublin-based company is still outpacing just about everybody, but at a less accelerated clip.”

  26. Financial Performance

  27. Net Revenue CAGR of 28% since 2005 (E) CAGR 28% * Mid point of Guidance Oct 21st

  28. Earnings Per Share Growth (E) CAGR 37% * Mid point of Guidance October 21st

  29. Cash Flow from Operations / Free Cash Flow FCF Per Share * Estimate assumes DSO of approx 60 days. Historic periods FCF exclude Head-office construction costs

  30. Return on Equity

  31. Recent Financial Performance ($ millions) Quarter 3 2009

  32. Recent Financial Performance ($ millions) YTD 2009

  33. Summary Balance Sheet and Cash Flow($ millions)

  34. ICON Key Financial Metrics($ millions)

  35. ICON Plc Historic Share Price Performane ICON S&P 500 Nasdaq Composite

  36. Investment Case Summary • Top Global Clinical CRO - #4 • Deep customer relationships • Quality of staff • Experienced Management team • Excellent Reputation • Solid market fundamentals • Outstanding record of growth • Strong balance sheet

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