Iqvia Holdings (NYSE: IQV) is working towards removing inefficiencies in clinical trials so it can help pharmaceutical companies get to the finish line sooner by adding a new drug to the market.
Last fall, Iqvia, a clinical trial company, invested in artificial intelligence to manage the financial components of clinical trials and streamline the process.
The company conducts thousands of clinical trials for pharmaceutical firms, including both smaller and larger biotech companies. Iqvia reported revenue of $4.4 billion in the fourth quarter, an increase of 10% year over year. Management estimated that revenue for 2026 will reach $17.25 billion at the midpoint, representing 5.75% growth.
Iqvia’s services are in high demand. The company, which has a market capitalization of $29 billion, also reported a backlog of $32.7 billion, which is an increase of 5% compared to the period a year ago.
Shares of the company have fallen by 7% during the past year. Iqvia’s stock received a buy rating from 22 investment banks, while three gave it an overweight rating and two gave it a hold rating. The median price target is $240.
Some experts, including Rachel Elfman, an equity analyst for Morningstar, believe the stock price could rise and maintain its $268 fair value estimate.
“We view the stock as very undervalued, currently trading at a 32% discount to our fair value estimate,” she wrote.
One temporary issue is that Iqvia faces higher net interest expenses that will rise by $80 million in 2026 compared with 2025 due to debt refinancing. This expense will impact bottom-line growth by 4%.
Artificial intelligence for efficiency
Iqvia’s clinical trial expertise streamlines the process, giving pharmaceutical businesses more time on the patent clock, which starts when a drug is discovered to provide treatment for a disease or illness such as cancer, epilepsy, or diabetes. Patents generate larger profit margins for biotech companies before the drugs are labeled as generic, which reduces the cost to patients.
Now the company has added artificial intelligence to eliminate some of the inefficiencies in the process and will instead merge “budgeting, contracting, forecasting, and payment workflows with shared data and end-to-end processes,” the company said. The software was launched during the first quarter of 2026.
The software uses agentic AI to create budgets, process invoices, and identify anomalies, helping its customers in over 200 geographies, Iqvia said. Customers are estimated to save up to 50% reduction in processing time.
Investing in AI to improve efficiencies is a good move for Iqvia to generate more revenue, Elfman said.
“As these AI capabilities are implemented and scaled, we anticipate long-term revenue upside and margin improvement, leading to mid- to high-single-digit revenue growth over our forecast period,” she wrote.
Additional expansions, partnerships
Iqvia recently expanded in vitro drug discovery, animal testing alternatives, and AI-powered small-molecule discovery by spending $145 million for Charles River Laboratories’ discovery assets. The February deal includes five sites specializing in in vitro drug discovery to help in early discovery research, including oncology, neurology, immunology, metabolism, and rare diseases. These assets generated $144 million in revenue in 2025.
“This acquisition will meaningfully strengthen our ability to support clients earlier in the R&D lifecycle and complements our existing translational and clinical development capabilities,” said David Morris, president of IQVIA Laboratories. “Integrating these assets with our existing capabilities creates an industry-leading drug discovery platform with a track record of advancing discovery programs into clinical development.”
Iqvia is also collaborating with Flagship Pioneering to increase its clinical research capabilities by using AI, analytics, and clinical trial design to develop a more efficient approach to drug development and early commercial viability.
The work will focus on drug development strategy and analytics, clinical development, and asset valuation and due diligence for Flagship’s ecosystem of over 40 biopharma companies.
Large client base with high retention rate
One advantage that Iqvia has over its competitors is its high retention rate. Iqvia has a 99% retention rate of its top 1,000 clients. Pharmaceutical companies use the company’s services to plan for new product launches and estimate revenue, marketing, and commercialization.
“Clients are likely to continue choosing Iqvia based on its trusted reputation,” wrote Elfman.
“Iqvia’s leadership within the contract research organization (CRO) market and continuous technological advances give us confidence that it will be able to maintain its trusted brand name and keep up with the ongoing innovation in the industry.”
The experience of Iqvia’s employees allows the company to “design a trial tailored to regulatory technicalities, quickly identify target patients at sites around the world for rapid enrollment, and then advise on data collection and analysis for regulatory approvals,” she added.
The company’s customers are also diverse and include small to midsize businesses and larger biotech and pharmaceutical companies.
“A diversified client base strengthens Iqvia’s competitive advantage as small/midsize clients are likely to need full outsourcing solutions, while large pharmaceutical companies offer profitable preferred partnerships with high switching costs, choosing one or a few trusted CROs to which they funnel most of their new business,” Elfman said.
The number of biotech companies outsourcing their clinical trials rose to 60% in 2020 from 36% in 2007, she said.
“We expect outsourcing penetration will continue to grow steadily as trials become more complex,” Elfman said.
Iqvia stands out because the company also conducts late-stage trials, also known as Phase 3 in the U.S. If those trials are successful, pharmaceutical companies receive approval from the Federal Drug Administration to manufacture and sell a new drug.
“The speed and quality of these trials are essential since late-stage clinical trials are expensive and the stakes for a successful outcome are high,” she said.
Iqvia’s proficiency in conducting clinical trials while investing in AI solutions to offer more services to biotech companies could attract more customers and drive more revenue growth and profit margins.
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