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ICON Plc. Merrill Lynch - Global Pharmaceutical, Biotech & Medtech Conference,

ICON Plc. Merrill Lynch - Global Pharmaceutical, Biotech & Medtech Conference, September 19 th 2007. Forward Looking Statements.

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ICON Plc. Merrill Lynch - Global Pharmaceutical, Biotech & Medtech Conference,

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  1. ICON Plc.Merrill Lynch - Global Pharmaceutical, Biotech & Medtech Conference, September 19th 2007

  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.

  3. The Journey So Far 1990 • Revenues $0.5 million • Operating Profits $0m • Staff 5 2006 • Revenues $456 million • Operating Profits $48m • EPS $1.33 • Staff 4,300 2007 Guidance • Revenues $560-$580 m • Operating Profit $60 - $65 m • EPS $1.70 - $1.80 • Staff 4,800 – 5,000

  4. Global Full Service Clinical Development EU 40% Revenue by Region ROW 7% US 53%

  5. Market Environment

  6. Strong Market Environment with... • Fundamental R&D Spending Growth Trend 6%- 8% p.a. • Phase II / III pipelines strengthening • Increased Outsourcing • Being accelerated by activity & funding in Biotech / Speciality • Globalisation of clinical research • Cost containment pressures • Evidence that projects, where CROs are engaged, complete faster than “internal only” studies* • Growth c.15% p.a. since 2001* • Increasing Regulation • More patients/ more studies • Post marketing surveillance *Source: Tufts Centre for Study of Drug Development

  7. …US Biotech Funding continuing to grow, leading to... Biotech fund raising ($billions) $Billion Source: Burrill and Company

  8. …significant growth in the number of companies with active clinical projects,…. Number of companies running clinical projects Source: Informa Health

  9. … and significant growth in the number of active INDs,… 49% Increase since 2000 Number of Active INDs Source: FDA

  10. …which is enriching pipelines. 2002 – 2006 46% Growth Phase I – II Source: IMS R&D Focus, Dec 2006 and previous year SMRs

  11. Not a “ Pig in a Python”, rather a …….

  12. …bursting dam….

  13. …bursting dam….

  14. …bursting dam.

  15. ICON in this Market Environment

  16. Strong Gross Business wins has led to… ICON Gross Business Wins - Last 9 Quarters ($ millions)

  17. .. excellent Net New Business wins and very strong book to bill ratios… Book to Bill Ratio Net Business Wins

  18. …leading to record Total Backlog levels. ($ millions)

  19. From this backlog, coverage of next 4 quarters revenues is robust…….. % coverage of next 4 quarters forecast revenues Value of backlog forecast to be earned in next 4 quarters

  20. …..and the customer base continues to diversify. Client Concentration 2005, 2006, YTD 2007

  21. YTD ‘07 Revenue Breakdown Revenue by Customer Segment Revenue by Therapeutic Area

  22. Revenue Growth v Peers: Net Revenue CAGR between 2000 and 2006 *Source SEC Filings

  23. Strategy

  24. Core Strategy is Organic Growth, with acquisitions adding new services or scale. • Capitalise on market fundamentals to drive organic growth in all business units. • Expand geographic footprint to exploit globalisation. • Pursue acquisitions to enhance depth and scale of current operations and to add additional complementary services e.g. • Phase I • Bioanalytical / Biomarkers • Therapeutic specialists • Safety / Phase IV • Patient Recruitment • Staffing • Cross-sell services to grow sales and margin

  25. Financial Performance

  26. Recent Financial Performance ($ millions, except EPS; includes stock option expense)

  27. Recent Financial Performance ($ millions)

  28. Net Revenue CAGR of 30% over 7 Years CAGR 30% *Mid Point of Guidance (E)

  29. Earnings Per Share Growth CAGR 25% (E) *Mid Point of Guidance

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

  31. Improving Margins

  32. Quarterly Operating margins have beenimproving and …. Turnaround in Lab * Includes an estimated SFAS 123 non cash stock compensation charge for the 2005 figures

  33. ….further margin improvement should arisethrough 2008 • Further volume growth in Lab • Significantly improved performance from Phase I and Consultancy businesses • Bringing Japan from investment phase to profitability • Expanding margins in Phase II – IV through leverage

  34. Investment Case Summary • Top Global Clinical CRO - #4 • Outstanding record of growth • Strong market fundamentals • Excellent strategic position • Strong balance sheet • Margin expansion opportunity

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