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Syneos Health, Inc. (NASDAQ:SYNH)
Q3 2020 Earnings Call
Oct 29, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Syneos Health Third Quarter 2020 Earnings Conference Call. [Operator Instructions] I would like to hand the conference over to Ronnie Speight, Senior Vice President of Investor Relations. Please go ahead, sir.

Ronnie Speight -- Senior Vice President, Investor Relations

Good morning, everyone. With me on the call today are Alistair Macdonald, our Chief Executive Officer; Jason Meggs, our Chief Financial Officer; Michelle Keefe, our President of Commercial Solutions; and Paul Colvin, our President of Clinical Solutions. In addition to the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor.syneoshealth.com. Remarks that we make about future expectations, plans, growth, anticipated financial results and prospects, the completion of acquisitions and our expectations regarding the COVID-19 pandemic, including our expectations regarding a recovery and its impacts on the company, constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, and we disclaim any obligation to update them. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These factors are discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2019, as updated by our subsequent 10-Qs and other SEC filings. During this call, we will discuss certain non-GAAP financial measures, which exclude the effects of events and transactions we consider to be outside of our core operations. These non-GAAP measures should be considered a supplement to and not a replacement for measures prepared in accordance with GAAP. For a reconciliation of non-GAAP financial measures with the most directly comparable GAAP measures, please refer to the appendix of our presentation. I would now like to turn the call over to Alistair Macdonald. Alistair?

Alistair Macdonald -- Chief Executive Officer

Thanks, Ronnie. Good morning, everyone, and thank you for joining us today. I hope you and your families are in good health and staying safe. Our financial results for the third quarter was solid as we remain resilient in managing through the impacts of COVID-19. We delivered strong sequential revenue growth with profit outperformance in the third quarter and are pleased with the ongoing market receptivity for our innovative integrated solutions. Total revenue for the quarter was below our guidance, solely due to the slower recovery in reimbursable out-of-pocket expenses across both segments, which was driven by an increase in virtual operations and a slower recovery in patient enrollment. Excluding the impact of reimbursable expenses, Clinical Solutions revenue was in line with our expectations and Commercial Solutions revenue exceeded our expectations for the quarter, contributing to the strong performance in our adjusted EBITDA margin. I'm pleased with the strength of our margins during the quarter, which was partially driven by a lower mix of reimbursable expenses. We expect this pattern to continue as reflected in our updated guidance, and we believe that this shift could provide a structural margin benefit over the long term. We continue to deliver on our strategy and remain confident in the long-term strength of our business, given our robust backlog and differentiated model. We expect strong growth in both of our segments in 2021, despite recent increases in COVID-19 cases slowing the pace of recovery.

Further amplifying our industry-leading end-to-end capabilities, last night we announced an agreement to acquire Synteract. Synteract is a midsized, full-service CRO focused on the emerging biopharma sector, where we have limited customer overlap. Synteract shares an aligned philosophy around operational excellence, therapeutic expertise in focus areas, including oncology, rare disease, dermatology, CNS and specialty in pediatrics, and a belief in deploying the right technologies to accelerate performance. If completed, we believe this acquisition would cement our already leading position in the small- to mid-sized space, extending our support to emerging biopharmaceutical companies. This market segment is experiencing rapid growth given the ongoing strength of biotech funding and is ideally suited for our Syneos One and consulting offerings. These favorable dynamics create the opportunity to capture revenue synergies, including using our global scale to increase their conversion of Phase II trials into larger Phase III, improving their ability to win new business based on our scale and broad capabilities and leveraging the strength of our combined pipelines. Synteract's strong management team will continue to lead an emerging biopharma unit within Syneos Health and retain their well-regarded brand.

We're looking forward to this next chapter of growth, our shared cultural commitment to changing patient lives and look forward to welcoming Synteract to the Syneos Health family. Additionally, we continue to fuel innovation as highlighted by the launch of our Kinetic customer engagement capability, while also receiving recognition for our collaborative culture with our recent selection to the Forbes 2020 Best Employer list. We ranked highest among biopharmaceutical outsourcing organizations for this award based on independent polling of employees throughout the industry. This success would not have been possible without the work of our 24,000 employees around the world, and I want to thank each and every one of them for contributing to the company we have become. Now I'll turn to key highlights from the quarter. First, we closed Q3 with solid net new business awards, including Clinical Solutions year-over-year growth of 16.9%, resulting in book-to-bill ratios of 1.2 times for Clinical Solutions, 0.78 times for Commercial Solutions and 1.1 times for our total organization. This brings us to $5.9 billion of net awards and an aggregate book-to-bill ratio of 1.31 times for the trailing 12-month period. For our Clinical business, this builds a strong position for accelerating revenue growth with 20.4% growth in net awards for the trailing 12-month period and year-over-year backlog growth improving to 18.2%. Secondly, we experienced strong profitability for the third quarter with 8.9% year-over-year adjusted EBITDA growth and a 240 basis point margin increase to 16.6%. And third, we generated robust operating cash flow of $156 million during the period, further strengthening our overall financial position and liquidity.

We ended the quarter with $248.6 million of unrestricted cash and $581.4 million of availability on our revolving credit facility with net leverage of 3.7 times. Now getting into the details of our results. We saw a strong sequential recovery during the third quarter, with total revenue growth of 8.9% compared to the second quarter, excluding the second quarter divestiture of our contingent staffing business. Our teams continue to work closely with customers, investigative sites and HCPs to balance remote operations with a progressive transition back to face-to-face operations. Clinical Solutions revenue showed the strongest sequential recovery during the quarter, growing 11.6% over the second quarter when normalizing for the divestiture of our contingent staffing business. Clinical Solutions also delivered a solid third quarter of net awards, growing 16.9% compared to last year. Gross awards remain very strong, including a record quarter of awards in our small- to mid-sized customer segment. Our net awards were impacted by a backlog adjustment, reflecting changes in our expectations for reimbursable expenses. As the legacy of the pandemic, coupled with the ongoing centralization of remote operations in our global operations network, we anticipate an ongoing reduction in these costs, driven by lower travel expenses and an increased mix of remote site visits. This brings Clinical net awards to $4.7 billion for the trailing 12-month period, increasing our book-to-bill ratio for the same period to 1.4 times.

Our Clinical pipeline remains robust across customer segments, fueled by double-digit growth in SMID RFP flow year-to-date, including a record third quarter. We have also won approximately 60 COVID-related clinical projects through the end of Q3. These awards are primarily for COVID treatments with a similar burn profile to much of our existing backlog. Although at the end of Q3, we did secure a large-scale vaccine study that will have a more rapid burn profile with an anticipated start in early 2021. This represents less than 10% of our year-to-date gross awards, and we continue to see a substantial pipeline of additional COVID-related opportunities. Outside of the backlog adjustment, for reimbursable out-of-pocket expenses, we have experienced no meaningful cancellation activity as a consequence of COVID-19. However, we continue to see operational delays in studies created by the resurgence of COVID cases. This has resulted in a high utilization of remote monitoring and slower-than-expected patient enrollment compared to our original expectations for this stage of the recovery. We're also honored to have recently received the Eagle Award for the fourth consecutive year, a notable achievement recognizing our industry leadership in site relationships.

Syneos Health was selected by nearly 10,000 investigative sites across 47 countries that vote for the CRO they believe best demonstrates a strong commitment to site partnership. I applaud our employees and sites that are adapting seamlessly across both face-to-face and virtual settings to continue to deliver for our customers. Commercial Solutions outperformed our third quarter expectations with sequential revenue growth of 1.4%. Commercial Solutions also had a solid awards quarter, resulting in $1.2 billion of net awards for the trailing 12-month period, maintaining our book-to-bill ratio of 1.04 times. This performance drove total Commercial backlog growth of approximately 6% compared to the third quarter of 2019. Since the end of the quarter, our Commercial Solutions team also was awarded integrated launch programs with a top 20 pharma customer for two of their COVID-19 therapies, which are expected to be approved in 2021. Our Commercial pipeline remains robust, demonstrating strong demand in the market, even as customers evaluate the timing of their evolving product strategies in light of COVID-19. We remain confident that our backlog growth, robust pipeline and the recovering macro environment will position us to Commercial Solutions growth in 2021 and beyond. fueled by the growing complexity of customer product strategies and the rapid pace of FDA-neutral approvals. With that broader context, let me provide an update on some of the key operating metrics we have highlighted in recent months.

Our clinical teams continued to see steady improvement in their physical access to investigative sites, with about 70% of sites now permitting some level of physical visits. However, some of these sites are facing capacity constraints requiring a higher mix of remote monitoring visits than we previously anticipated. Another 20% of our sites remain accessible only via some level of remote monitoring activity, leaving about 10% of site inaccessible. While sites generally continue to be somewhat cautious amid localized increases in COVID-19 cases, we still expect around 90% of our sites to be physically accessible to at least some degree by year-end. We also expect remote monitoring visits to represent a higher percentage of our future visits compared to pre-COVID-19 levels as our customers and sites have accelerated their adoption of more efficient technologies, where possible. These evolving dynamics create a headwind to revenue growth in the fourth quarter and into 2021, both in terms of lower reimbursable expenses and reduced site visit revenue. This should be offset somewhat by the increased efficiency of remote activity, supporting continued expansion of our adjusted EBITDA margin. Our clinical teams are also experiencing continued improvement in the pace of both patient enrollment and the starts of new clinical trials. The level of new patient enrollment has recovered to about 75% of pre-COVID levels during October, and new site activations are trending at 115% pre-COVID levels.

While the trailing recovery in enrollment will impact the pace of revenue recovery in early 2021, we expect the site activation strength to provide a strong foundation for clinical growth in 2021 and beyond, when patient enrollment fully recovers. Our clinical FSP business has remained resilient, experiencing year-over-year revenue growth, excluding the impact of reimbursable expenses and the divestiture of our contingent staffing business. Within Commercial Solutions, our Deployment Solutions field teams have continued to execute on their omnichannel strategy and are experiencing a gradual return to in-person visits currently in about 55% of our territories. The pace of this return to physical visits varies by customer, with some of our large pharma customers taking a cautious stance on allowing their teams back into the field as COVID levels have increased again in certain areas. We now expect approximately 70% of these teams to be permitted to conduct physical visits for their HCP customers by year-end. However, given historical deployment approaches in certain therapeutic areas and the success of our virtual interactions, we believe that 100% physical access is no longer required for our field teams to be fully effective. This promotional agility is further advanced by our leading omnichannel expertise that we have now branded as Kinetic, our advanced analytics capability that combines data, technology and behavioral science to optimize HCP engagement. During COVID, we have seen HCPs more rapidly incorporate these virtual communications into their practices and are now seeing compelling evidence of the effectiveness of hybrid interactions in driving prescribing behaviors.

Within Deployment Solutions, the primary impact of COVID-19 continues to be the delayed start-up of new customer programs, along with reduced revenue from reimbursable expenses. Our communications business continues to see increased demand for integrated communication solutions, where we currently have a record pipeline and continue to win projects by collaborating across advertising, public relations and medical communications. Our diverse consulting practices also continued to perform well, helping our clients navigate the changing commercial landscape with a strong backlog of work entering the fourth quarter. Before I turn the call over to Jason, I wanted to recognize our team around the globe once again, not only for the Forbes and Eagle accolades, but for the numerous awards we've collected over the last quarter. We have demonstrated our resilience, focus and collaborative culture as we continue to face the challenges of COVID-19 together, while providing excellent execution for our customers. Jason will now provide additional comments on our financial performance. Jason?

Jason Meggs -- Chief Financial Officer

Thank you, Alistair, and good morning, everyone. Let me start by thanking the team for a solid third quarter and setting us up for robust growth in 2021 and beyond. Given the COVID-19 headwinds, we had a strong quarter across our operating and financial metrics, including gross awards, backlog growth, profitability and cash flow demonstrating how our unique value proposition continues to resonate with our customers and our team continues to execute. Our total revenue for the third quarter of 2020 was $1.1 billion, down 6.8% and down 7.5% in constant currency compared to the third quarter of 2019 on an adjusted basis. Our Clinical Solutions revenue for the third quarter was $829.2 million, down 4.6% or 5.4% in constant currency. Excluding the impact of the sale of our contingent staffing business, Clinical Solutions revenue was down 3.3%. And excluding the impact of reimbursable expenses, Clinical Solutions revenue grew 1% compared to the third quarter of 2019. As Alistair highlighted, Clinical Solutions revenue was lower than our forecast due to lower-than-anticipated reimbursable expenses, which was driven by reduced investigator and travel expenses. These expenses were impacted as more of our site visit activity continued to be remote and patient enrollment recovers more slowly than anticipated. Further, we expect these costs to be somewhat lower going forward as our customers and investigative sites maintain higher levels of remote visits in response to near-term site capacity constraints and generally increase their adoption of remote monitoring. Our third quarter Commercial Solutions revenue was $269.8 million, down 12.8% or 13.2% in constant currency.

The decline in Commercial revenue was primarily due to the impact of COVID-19, including a disproportionate decline in reimbursable expenses associated with reduced field team travel and lower investigator meeting expenses as well as delays in new project start-ups. Importantly, excluding reimbursable expenses, Commercial Solutions revenue was down 6% and came in ahead of our expectations. Adjusted EBITDA increased 8.9% to $182.8 million, representing an adjusted EBITDA margin of 16.6% and a year-over-year increase of 240 basis points. The increase in adjusted EBITDA margin for the third quarter was the result of our cost management initiatives, including ForwardBound and lower reimbursable expenses. As a reminder, about 70% of our expected 2020 COVID-related cost savings are resulting from temporary programs, the majority of which are expiring over the course of the fourth quarter and into 2021. Adjusted diluted EPS of $1.04 for the third quarter increased by 19.5% year-over-year, primarily driven by increase in adjusted EBITDA and lower interest expense. Now turning to cash flow and the balance sheet. During the third quarter, our operations generated $156 million in cash flow. DSO for the quarter was 46.4 days. We ended the quarter with $248.6 million of unrestricted cash and total debt outstanding of $2.58 billion, resulting in net leverage of 3.7 times. During the quarter, we repaid $59.4 million of our Term Loan A and $35 million of our Term Loan B after expanding our AR securitization facility by $25 million and extending its term until October 2022. Further, in conjunction with the secondary offering by our private equity sponsors in September, we repurchased $30 million of our outstanding shares.

As of September 30, we had $106.3 million of share repurchase authorization remaining for utilization through the end of this year. As part of our value creation plan, we continue to evaluate the best opportunities to fuel our growth through M&A that expands our capabilities and our market position. As Alistair outlined earlier, last night, we announced the acquisition of Synteract. Synteract represents a bolt-on acquisition that had strong capabilities and an important inorganic growth driver via its fast-growing emerging biopharma customer base and operational delivery model. While we continue to prioritize deleveraging, we adjusted our net leverage target for the end of 2021 to three to 3.5 times to reflect M&A activity. Our non-GAAP effective tax rate for the third quarter was 24%, and we expect to maintain that rate for the full year 2020. Given the benefit of our NOL deductions, we expect our actual net cash outlay for taxes in 2020 to be approximately $20 million. Turning now to our 2020 guidance. This guidance represents our best efforts to estimate the impact of COVID-19 on our business, recognizing the factors related to COVID-19, including its severity and duration, are outside of the company's control. We currently expect our site access within Clinical Solutions to return to approximately 90% of normal levels by the end of 2020, although we now expect a higher mix of remote monitoring activity. Additionally, we expect new patient enrollment to recover more slowly than originally anticipated, lagging the recovery we are experiencing in new site activations. For Commercial Solutions, we now expect our HCP access to return to approximately 70% of normal levels by the end of 2020. These changes in recovery trends have had an impact on the pace of revenue recovery, primarily in reimbursable expenses.

Based on lower reimbursable expenses across both segments, we now expect full year 2020 revenue in the range of $4.37 billion to $4.44 billion. That said, with strong cost management, we now expect total adjusted EBITDA in the range of $620 million to $640 million, representing an adjusted EBITDA margin of 14.3%, up 50 basis points from 2019. Lastly, we expect adjusted diluted EPS of $3.33 to $3.46, up year-over-year at the midpoint. This updated guidance does not reflect our acquisition of Synteract pending our expected fourth quarter closing. I also want to provide an early outlook on our expected growth in 2021 as compared to the midpoint of our updated 2020 guidance. Given the strong backlog growth across both segments, our momentum and strategic awards and our current pipeline of opportunities, we expect total revenue of $4.9 billion to $5.1 billion. This reflects as reported growth of 11.2% to 15.8%. Normalizing for the divestiture of our contingent staffing business earlier this year, this outlook reflects year-over-year growth of 11.7% to 16.2%. Note, this outlook excludes the acquisition of Synteract, which, if successfully closed, we currently estimate will add $200 million to $220 million of revenue in 2021. This further assumes that the COVID-19 recovery continues to progress based upon our revised expectations, including decreased restrictions on site access in 2021 and patient enrollment rates returning to pre-COVID levels, along with a sustained increase in the use of remote monitoring and field team visits. With a return to strong revenue growth and the continued success of our ForwardBound program, we also expect to continue our margin growth trajectory of 30 to 50 basis points in 2021. This completes our prepared remarks, and we'd be happy to answer any questions.

Thank you, Alistair, and good morning, everyone. Let me start by thanking the team for a solid third quarter and setting us up for robust growth in 2021 and beyond. Given the COVID-19 headwinds, we had a strong quarter across our operating and financial metrics, including gross awards, backlog growth, profitability and cash flow demonstrating how our unique value proposition continues to resonate with our customers and our team continues to execute. Our total revenue for the third quarter of 2020 was $1.1 billion, down 6.8% and down 7.5% in constant currency compared to the third quarter of 2019 on an adjusted basis. Our Clinical Solutions revenue for the third quarter was $829.2 million, down 4.6% or 5.4% in constant currency. Excluding the impact of the sale of our contingent staffing business, Clinical Solutions revenue was down 3.3%. And excluding the impact of reimbursable expenses, Clinical Solutions revenue grew 1% compared to the third quarter of 2019. As Alistair highlighted, Clinical Solutions revenue was lower than our forecast due to lower-than-anticipated reimbursable expenses, which was driven by reduced investigator and travel expenses. These expenses were impacted as more of our site visit activity continued to be remote and patient enrollment recovers more slowly than anticipated. Further, we expect these costs to be somewhat lower going forward as our customers and investigative sites maintain higher levels of remote visits in response to near-term site capacity constraints and generally increase their adoption of remote monitoring. Our third quarter Commercial Solutions revenue was $269.8 million, down 12.8% or 13.2% in constant currency.

The decline in Commercial revenue was primarily due to the impact of COVID-19, including a disproportionate decline in reimbursable expenses associated with reduced field team travel and lower investigator meeting expenses as well as delays in new project start-ups. Importantly, excluding reimbursable expenses, Commercial Solutions revenue was down 6% and came in ahead of our expectations. Adjusted EBITDA increased 8.9% to $182.8 million, representing an adjusted EBITDA margin of 16.6% and a year-over-year increase of 240 basis points. The increase in adjusted EBITDA margin for the third quarter was the result of our cost management initiatives, including ForwardBound and lower reimbursable expenses. As a reminder, about 70% of our expected 2020 COVID-related cost savings are resulting from temporary programs, the majority of which are expiring over the course of the fourth quarter and into 2021. Adjusted diluted EPS of $1.04 for the third quarter increased by 19.5% year-over-year, primarily driven by increase in adjusted EBITDA and lower interest expense. Now turning to cash flow and the balance sheet. During the third quarter, our operations generated $156 million in cash flow. DSO for the quarter was 46.4 days. We ended the quarter with $248.6 million of unrestricted cash and total debt outstanding of $2.58 billion, resulting in net leverage of 3.7 times.

During the quarter, we repaid $59.4 million of our Term Loan A and $35 million of our Term Loan B after expanding our AR securitization facility by $25 million and extending its term until October 2022. Further, in conjunction with the secondary offering by our private equity sponsors in September, we repurchased $30 million of our outstanding shares. As of September 30, we had $106.3 million of share repurchase authorization remaining for utilization through the end of this year. As part of our value creation plan, we continue to evaluate the best opportunities to fuel our growth through M&A that expands our capabilities and our market position. As Alistair outlined earlier, last night, we announced the acquisition of Synteract. Synteract represents a bolt-on acquisition that had strong capabilities and an important inorganic growth driver via its fast-growing emerging biopharma customer base and operational delivery model. While we continue to prioritize deleveraging, we adjusted our net leverage target for the end of 2021 to three to 3.5 times to reflect M&A activity. Our non-GAAP effective tax rate for the third quarter was 24%, and we expect to maintain that rate for the full year 2020. Given the benefit of our NOL deductions, we expect our actual net cash outlay for taxes in 2020 to be approximately $20 million. Turning now to our 2020 guidance.

This guidance represents our best efforts to estimate the impact of COVID-19 on our business, recognizing the factors related to COVID-19, including its severity and duration, are outside of the company's control. We currently expect our site access within Clinical Solutions to return to approximately 90% of normal levels by the end of 2020, although we now expect a higher mix of remote monitoring activity. Additionally, we expect new patient enrollment to recover more slowly than originally anticipated, lagging the recovery we are experiencing in new site activations. For Commercial Solutions, we now expect our HCP access to return to approximately 70% of normal levels by the end of 2020. These changes in recovery trends have had an impact on the pace of revenue recovery, primarily in reimbursable expenses. Based on lower reimbursable expenses across both segments, we now expect full year 2020 revenue in the range of $4.37 billion to $4.44 billion. That said, with strong cost management, we now expect total adjusted EBITDA in the range of $620 million to $640 million, representing an adjusted EBITDA margin of 14.3%, up 50 basis points from 2019. Lastly, we expect adjusted diluted EPS of $3.33 to $3.46, up year-over-year at the midpoint.

This updated guidance does not reflect our acquisition of Synteract pending our expected fourth quarter closing. I also want to provide an early outlook on our expected growth in 2021 as compared to the midpoint of our updated 2020 guidance. Given the strong backlog growth across both segments, our momentum and strategic awards and our current pipeline of opportunities, we expect total revenue of $4.9 billion to $5.1 billion. This reflects as reported growth of 11.2% to 15.8%. Normalizing for the divestiture of our contingent staffing business earlier this year, this outlook reflects year-over-year growth of 11.7% to 16.2%. Note, this outlook excludes the acquisition of Synteract, which, if successfully closed, we currently estimate will add $200 million to $220 million of revenue in 2021. This further assumes that the COVID-19 recovery continues to progress based upon our revised expectations, including decreased restrictions on site access in 2021 and patient enrollment rates returning to pre-COVID levels, along with a sustained increase in the use of remote monitoring and field team visits. With a return to strong revenue growth and the continued success of our ForwardBound program, we also expect to continue our margin growth trajectory of 30 to 50 basis points in 2021. This completes our prepared remarks, and we'd be happy to answer any questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Robert Jones with Goldman Sachs. Your line is open, please go ahead.

Robert Jones -- Goldman Sachs. -- Analyst

Great. Good morning. Thanks for the question. I guess maybe just to start on the reimbursable travel since it obviously seems to be causing some noise for you and others more than expected this quarter. I just wanted to understand this a little bit better. So you mentioned the 400 basis point headwind for the quarter. How does that compare to 2Q? And then what's assumed as far as this headwind in the 4Q guide? And then, I guess, similarly, anything you can share around what that impact was on the revised reimbursable travel in the bookings number?

Jason Meggs -- Chief Financial Officer

Yes, Bob. Good morning. It's Jason. I'll start. So when you look from quarter two to quarter 3, the performance in terms of year-over-year contraction in the reimbursables was similar across the company. And it was a little bit worse in commercial actually and a little bit better in clinical, but roughly offsetting there for a similar performance year-over-year. That's the reason you see the direct revenues performing better proportionately. And then when you think about the fourth quarter, we do see, based on the metrics and the amount of visits that we're doing on site and the patient enrollment trends and the number of field teams we have getting into the field, improvement, so sequentially improving, but still down from our original expectation with approximately 90% of our field teams set to be in the field when we set guidance in August, now that's closer to 70%. And then we were in the sort of thinking 10%, 15% of visits being remote, and that's actually up 20% plus. So it's really that -- it's an improvement sequentially, but it's just different than the expectation of what we had based on the trends that we're seeing with COVID right now. When you think about the backlog and the adjustment in clinical, we -- if you just take out the backlog adjustment, our book-to-bill in the quarter in clinical would have been north of 1.4, again. So it was a good quarter, and we feel good about the bookings that we had. And it was something when we looked at it and thought about what are we hearing and seeing? We don't yet have the COVID impact in our business that others are having. So we see a clear picture of what's happening at the project level and the study level and what we're seeing in new bids going out and that's our focus. And we felt like it's the most prudent thing based on what we're seeing to go ahead and adjust that backlog down, given we believe in the non-COVID world, that's the experience we're going to have going forward in terms of sustainable remote monitoring. And as we mentioned in the prepared remarks, more of our work being centralized in our Syneos operations networks.

Robert Jones -- Goldman Sachs. -- Analyst

Okay. No, that's really helpful. And then I guess maybe just a follow-up, Alistair, on the COVID-related work. I know in 2Q, you said about 5% of bookings came from COVID. I think as an opportunity for the company, you kind of downplayed it a little bit, and now you're saying year-to-date, it's been greater than 10%. So clearly, that implies a pretty big step-up in 3Q bookings related to COVID. I'm just wondering, there's rough estimates out there that there's over 1,600 COVID-related vaccine and treatment trials going -- ongoing. It seems like Syneos is getting a greater share of that work. Any change in view of how viable or sustainable the COVID-related work could be as a category?

Alistair Macdonald -- Chief Executive Officer

No, it's a good question. I think you have to look at it in two ways. The treatment work that we're working on, how people recovering from COVID, people with long COVID trials to look at how we ease the symptoms, treat people in hospital with COVID. I think the profile of those -- the impact of COVID is going to be around for a while on people who have already caught it and need treatment for it, et cetera, et cetera. And they have a very different profile to the trials of vaccines because you have a longer follow-up period on the treatment trials than purely a vaccine treatment measuring the antibody effectiveness and looking for the reaction. So, I think that is robust. I think we'll see more of that. We have a good pipeline of that work, which would suggest that people are investing in more on the treatment side. We have won more vaccine work in Q3, right at the end of Q3. So I expect that to drive some good activity for us in the earlier parts of 2021. And also actually on the commercial side, as we mentioned, we're starting to see an RFP flow from customers on how they get their treatments into the field, how do they support people, medical communications, meetings, support in the field, educational work, et cetera, MSL work. So yes, it's a bit more balanced for us now. I think we missed out on the early wave. The Warp Speed stuff was allocated to those CROs who have a much broader and bigger history in vaccines than Syneos does. And in a way, as Jason said, what you're seeing in our numbers is the effect COVID has on the underlying backlog without that kind of -- without a big kind of COVID vaccine blanket thrown over the top. So, sustainable, yes, we won more in Q3 than we had in Q2. But again, the majority of it was on the treatment side.

Robert Jones -- Goldman Sachs. -- Analyst

Okay. Great. Thank you so much.

Alistair Macdonald -- Chief Executive Officer

Thanks Robert.

Operator

Thank you. And our next question comes from the line of Eric Coldwell with Baird. Your line is open, please go ahead.

Eric Coldwell -- Baird -- Analyst

Yes, thanks very much. So, I guess I'll start with Synteract. I think we found in the 10-Q that you paid $400 million. You said on the call $200 million to $220 million of potential revenue if it closes as expected. I'm curious if you can give us a sense on that revenue. Is -- what kind of growth would that represent for Synteract? And how have they held up during the pandemic? I know going back to early in the year, that was a very strong growing company with incredible growth in bookings before the pandemic, but how have they held up over the last six months, let's say?

Alistair Macdonald -- Chief Executive Officer

Yes. Good morning Eric, so we have known Synteract for a long time, obviously. We are well connected to that organization through relationships, and we've watched that business for a while, very impressive growth. They really focused in on a fewer therapeutic areas and have really penetrated that market. You know it's a market that's well funded. It responds very quickly to biotech funding, which we've seen an incredible amount of money going into. They've held up very well through COVID. We're very pleased to see that. I think they moved and made changes to their operations the same way that Syneos did, was able to switch to remote. And I think it speaks to their capability more than some of the other mid size CROs, who we've seen struggle a little bit through COVID, in being able to adjust the cost base, move to remote operations, et cetera. So it's an impressive group. Their growth rate is still pretty hot. I think they were hit fairly hard in terms of winning new awards in Q2. And I think quite a few people saw that. Q3, good bounce back. Q4, great pipeline. And I think that sector that they're in is really hot. And it's -- you got to look at the SMID. As we've grown up in the SMID, we kind of have that appreciation for it. And the fact that it is really subcategorized into the emerging biotech where Synteract has great penetration, and we don't have a lot of overlap with their customers and then the higher -- kind of mid- to higher end of the SMID with people with multiple products, maybe one or two on the market, which is where Syneos has traditionally played as we've grown -- we've kind of grown into that sector. And that sector was really hot for us in Q3. I mean it's kind of a record pipe in the SMID, record sales in the SMID for Q3, and we just see that segment getting hotter and hotter. So been able to land Synteract, having a good cultural fit and relationship with their executive team already. We're going to hold it as a separate business unit that's free to go after that emerging biotech, and then give it the support that Syneos brings globally. Because a part of their model right now is they win a project and they don't have people in a specific territory, they have to partner that out with another CRO. So it gives us an opportunity to drive good revenue synergies as well on top of their growth.

Eric Coldwell -- Baird -- Analyst

That's great. The -- I think the comments on the net book-to-bill in clinical, if we exclude the backlog adjustment for pass-throughs, would have been 1.4, if I heard you correctly. Would that -- would the math on our side be as simple as taking the delta from what was reported in that, some estimate above 1.4 and seeing what the total adjustment to backlog on pass-throughs was? Or is there some other math that might be needed here to -- I'm just curious if it's as simple as it seems that it might?

Alistair Macdonald -- Chief Executive Officer

Well, I'm not a complex mathematician by any stretch. I'll let Jason answer, but basically, yes would be my thought on that. So I'll let Jason...

Eric Coldwell -- Baird -- Analyst

Yes. I think it's what I'm getting to, as I'm not sure if you made any other kind of internal adjustments for the revenue impact, let's say, from the lower pass-through than expected, but...

Jason Meggs -- Chief Financial Officer

Yes. No, Eric, it's a good question. Yes, hey Eric, good morning. You're right, yes. That's the short answer. When you think about the direct revenue, what you see there is a far lower proportional impact. And actually, as we've talked about before, when you evolve to more remote monitoring, there are more sort of functional-type services that can be performed that just gets reallocated. So the impact on the sort of direct side isn't acute or needed at this point.

Eric Coldwell -- Baird -- Analyst

Very fair. Last one, just a quick clarification. Did you say that you won a large-scale vaccine award in 3Q or after 3Q? I'm curious if that contributed to bookings, number one. And then also on the COVID awards, you said you won two integrated launch programs, I believe, for COVID-19 therapies. So if you can give a little more there.

Alistair Macdonald -- Chief Executive Officer

Yes, both of your statements, Eric. So right at the end of Q3 an award on a large vaccine program, and we expect that to get going a little bit in Q4 and then contribute more in terms of revenue starting in Q1, Q2. And then on the commercial side, yes, we've been kind of anticipating and working proactively with people we know, obviously, who are developing treatments and vaccines to support -- to take that service line to them and offer that integrated launch package because it's got to move quickly. We are the biggest in the field, and we think that will give us some nice growth and some nice backlog as we go through '21 and '22. These -- the vaccines are fairly straightforward, right, but you still got to have that monitoring, that engagement with caregivers in the community. And then on the treatment side, some of the treatments are a lot more complex because of the immunoresponse. So making sure that training materials are out there, the call centers are available, that we have MSLs in the field supporting those products, is something I think we'll be well positioned to capitalize on.

Eric Coldwell -- Baird -- Analyst

Alistair, I hate to steal the parade here. I promise this will be the last follow-up. But the vaccine award in 3Q, we've seen CROs taking very different approaches to bookings. Some have discounted those awards tremendously, number one. Number two, some of those awards are coming with very high pass-through streams and others are coming with the CRO not actually doing the pass-through or not doing all of it. So maybe a little more color on that just to get us comfortable with the core clinical bookings ex pass-through adjustments.

Alistair Macdonald -- Chief Executive Officer

Yes. We're very conservative on what we took into bookings for, Eric, to be perfectly honest. So under our regular policy, I'm not 100% sure on what we took into it, but it wasn't a significant amount of the overall bookings in Q3. I mean we had a huge production from SMID customers, and it's pretty much a regular-looking quarter with the COVID overlay on top. So we were quite conservative in what we took out of that vaccine trial. It's certainly not -- it's certainly nowhere near the biggest thing that we were awarded in Q3. So hopefully, that gives you the color you need on that.

Jason Meggs -- Chief Financial Officer

Yes, Eric, just to provide a little color there -- a little additional color on that. We did see some of the similar trends that others have seen in terms of that -- the ratio of the bookings, et cetera. So if you look at the way that we did that, we looked at it and said, OK, how is this structured, what's the time line, et cetera. Do we believe fully based on what we're hearing today from the customer and what we see that it's going to run this way, and we did discount it to some extent. However, it was a large component of pass-throughs during the quarter with less on the direct. So if you look at just the direct impact to our bookings, and we said less than 10% year-to-date, it's going to be far lower than that. So we are seeing that. It's just not coming through and coming up until 2021.

Eric Coldwell -- Baird -- Analyst

Thanks very much guys. Appreciate it.

Jason Meggs -- Chief Financial Officer

Okay.

Operator

Thank you. And our next question comes from the line of Dave Windley with Jefferies. Your line is open, please go ahead.

Dave Windley -- Jefferies. -- Analyst

Hi. Good morning. Thanks for taking my questionsl. A couple of kind of, I think, philosophical ones. One on the patient recruitment comments. I think so far this year, as we've learned more and more detail than we ever thought we would about how revenue is recognized and the different contributors, the comment has been that not all revenue for a CRO requires site access. Lots of other things to do. But I think longer-term horizon-type thinking, if you don't have patients in a trial, you don't have revenue. And so I'm wondering how the change in your thoughts about patient recruitment impacts your clients' desire to move forward? Obviously, book-to-bill seems good and so demand seems to be there. But how does that patient recruitment change in thinking impact duration of studies, value of studies, appetite to push forward some of these studies? I'd be curious about your comments on that, Alistair.

Alistair Macdonald -- Chief Executive Officer

Yes. Good morning. It's a good question. I mean -- and I think we talked a little bit about the same kind of thing over the last couple of earnings. It's -- the projects that we run are part of larger programs. So I think, philosophically, people are looking at COVID, the impacts of COVID, trials are still enrolling, right? We're at what do we say, 70%, 75% of pre-COVID levels of enrollment. So, the enrollment delays tend to be in specific studies rather than every study. So some studies are right on it. Some studies are falling behind because of the patient kind of willingness to go into the site. That's basically it. But I think when people look at it, they're in -- and COVID is affecting a project within a program. And people don't -- if somebody's got a program that's going to be approved in 2025, let's say, I believe, philosophically, they hope will be -- we've gotta get through this study, and we've got to work out ways to accelerate the rest of the program. And that's doable, right? You want -- if you've got a study that's going to take three years and got 100 sites, how long is it going to take me if I have 150 sites? So I think we might see people coming through and saying, "Look, I need this project doing. I still want to keep my program on time. How do I accelerate it?" And there's a cost time trade-off in any study or in 90% of the studies that you can do. So I think people will come at it that way. You're absolutely right about enrollment. Without a patient -- I mean you get revenue from getting the sites open and engagement with the sites, et cetera, et cetera, on the project management fees. But a lot of our revenue, obviously, keys off of a patient being active in the study. The monitoring needs to be done for that patient, the data management, the analytics, et cetera, et cetera. So, I think, philosophically, that's where people are at. That's where our customers are at. We've had conversations with customers around. If we're delivering their whole program, we've got program level awards, obviously, how do we accelerate, how do we think about shortening the rest of the program up because of the delay to a project by COVID itself? Does that make sense?

Dave Windley -- Jefferies. -- Analyst

It does. Yes. Thank you. It's a good reminder on the broader perspective. The second question for you is on the M&A. I want to try to understand a little more specifically the -- I think you touched on it maybe at the smallest biotech level, but INC Research legacy certainly has that client strength in small, mid, in general. And so the basic question is, as you think about M&A here, buy versus build, so you kind of -- you seem to already kind of be in that client base. What specifically does Synteract add for Syneos that you couldn't have grown into yourself?

Alistair Macdonald -- Chief Executive Officer

Well, I think you're right. We could grow into it over time. As we become bigger, we've tended to develop relationships with SMID companies that become bigger themselves. And I think that, that smaller end of the SMID, the emerging biopharma, the emerging biotech, where Synteract plays, when we went through diligence with them, when we look at our customer list and their customer list, there's virtually no overlap. There is a little bit, but virtually none. And their customers that -- it's a huge patch of territory. There are hundreds -- well, maybe thousands of customers in that patch that we can't get to. So it helps us expand into that patch. I think when you look at what they can bring in terms of their customer touch and their BD team, it's an expansion of our efforts into that SMID sector. I think the emerging sector, which we -- that our organization has kind of grown away from a little bit, only 7%, I think of our revenue comes out of that sector. It gives us an opportunity to service more customers in there. I think it's a very strong fit for our Syneos One methodology because these are organizations that are smaller, have less infrastructure, et cetera. And then for us kind of financially, the revenue synergies from us being able to deliver behind Synteract, if you like, with our extended kind of geographic reach, which is one of their issues for winning work, they don't have that, enables us to drive revenue synergies with them and really take the Syneos One offering into a broader customer set and penetrate that fast-growing, well-funded emerging biotech sector that we have that history. And as you say, that was INC's legacy. But as we've grown and as we've developed, we've tended to develop up the chain within SMID to those larger -- to the larger end of it, if you like.

Dave Windley -- Jefferies. -- Analyst

Okay. And a quick comment on leaving them stand-alone as opposed to integrating?

Alistair Macdonald -- Chief Executive Officer

Yes. I mean if you think about our integrated business units as they stand now, they are armed and dangerous when they're working with bigger companies, our processes, working with the large pharmas, et cetera. So we don't want to lose that focus by merging Synteract into that. We want to -- I mean, it will be part of our clinical offerings, obviously, but it will be a stand-alone unit that has that nimbleness, that ability to engage with customers quickly without the encumbrance of the bureaucracy of a massive CRO. So we want to make sure that we bring it in, but we don't break it, that we keep them focused on the emerging biotech and then we give them that freedom and ability to stay nimble while having that horsepower sat behind them for when they need it.

Dave Windley -- Jefferies. -- Analyst

Got it. Thank you. I appreciate it.

Jason Meggs -- Chief Financial Officer

Yes, Dave, just to add a little bit on that. So we are going to integrate when you think about some of the back-office functional or enabling functions. So we will integrate as we normally do, and then there will be some portion of the business side that makes sense to go into our operations network, et cetera. But when you think about the front end, going to market, managing projects, dealing with the customers, we want to keep that independent for the reasons Alistair mentioned.

Dave Windley -- Jefferies. -- Analyst

Got it. That's helpful. Thank you.

Jason Meggs -- Chief Financial Officer

Thanks Dave.

Operator

Thank you. And our next question comes from the line of Erin Wright with Credit Suisse. Your line is open. Please go ahead.

Erin Wright -- Credit Suisse -- Analyst

Hi. Thanks.I don't want to be overkill here with limited question, but I do have a follow-up there. I guess are you though assuming any sort of dissynergies with this sort of transaction? As we know from kind of acquisitions across this industry when you combine two CROs, it's not always smooth. I just want to make sure that there's not any sort of dissynergy that we should be aware of. And then also, is it an inherently higher-margin business at the core or relative to your core given the primarily biotech focus?

Alistair Macdonald -- Chief Executive Officer

Yes. So, on the dyssynergy side, the answer is very quick. The answer is no. Because of the lack of -- I mean one of the things you look at really closely in diligence is the coverage in terms of overlap customers, and we don't really have any. So we're very happy with that. Then on the margin side, they -- I think we -- the goal for us is to bring their margins up to the Syneos level. They're slightly lower because of their SG&A load. So as we work to integrate some of that back end, we hope to help them bring their margins up more in line with where we're at.

Erin Wright -- Credit Suisse -- Analyst

Okay. Perfect. And then on the commercial segment, how should we be thinking about the quarterly progression there? You mentioned stronger communications in consulting segments, but want to dig into some of the drivers versus headwinds across that segment given it can be a little bit volatile quarter-to-quarter.

Jason Meggs -- Chief Financial Officer

Yes, Erin, it's Jason. So we expect to continue to see sequential growth there in quarter 4. As we outlined at -- in our August guidance, the business has really held up well and continue to win, and projects are beginning to start, which has been encouraging for us. So we expect to see that sequential improvement and then sequentially up into '21 as well getting into year-over-year growth at that point, is how we're thinking about it at the moment.

Erin Wright -- Credit Suisse -- Analyst

Okay good. Thank you so much.

Jason Meggs -- Chief Financial Officer

Okay.

Operator

Thank you. And our next question comes from the line of Tycho Peterson with JPMorgan. Your line is open. Please go ahead.

Tycho Peterson -- JPMorgan -- Analyst

Okay thanks. Alistair, I'll start with following up on some of your comments on recruitment and site access. You talked about 70% of sites now allow visits, but have capacity constraints. Is that the majority of sites that still have capacity constraints?

Alistair Macdonald -- Chief Executive Officer

I think it's a good proportion of them. I think it's probably around 50%. It's about split pretty evenly. Some sites are able to cope and some sites just through physical space more than anything else are more restrained. So it's very hard to get multiple days. It's hard to get multiple monitors on site in some locations. So it's a bit of a mixed bag really, Tycho.

Tycho Peterson -- JPMorgan -- Analyst

And then on the delays and you've flagged out a couple of times. Can you maybe just help us think about what percentage of your trials are currently delayed at this point?

Alistair Macdonald -- Chief Executive Officer

It's a good question. I'm not sure I have that potentially. Paul is on. I don't know if you, Paul, have a handle on that number. If we don't, we can get back to you on it, Tycho. But it's more by therapy. So obviously, we're catching up on oncology. We're -- obviously, oncology patients weren't going into clinics during the first lockdowns. Some of the dermatology projects are delayed, but catching up. And so some of -- I think it's a hard question to answer because some of them are delayed, but some of them are actually enrolling slightly faster than we would expect, so catching up, whereas some of them are delayed and going to always have that delaying. But I don't have the percentage, and it will be pretty hard to dial into it unless you did it by therapy.

Paul Colvin -- President, Clinical Solutions

Yes. I mean, Alistair, this is Paul. I think it's not just therapy, but regional and country mix too on those. So there's no one size fits all around that answer. Each trial is somewhat dependent on regional split and then the indication as to whether or not those patients are going into sites or not.

Tycho Peterson -- JPMorgan -- Analyst

Okay. And then for Jason, one or two quick ones. Just on the guidance. I know you talked about 10% of bookings are COVID related. Are you able to talk to 2021, what you're actually assuming for COVID revenues? And then as we think about the EBITDA guidance here for the fourth quarter, is the margin leverage all from ForwardBound? Or are there additional cost levers you're pulling here in your end?

Jason Meggs -- Chief Financial Officer

Tycho, so on the first question, we're seeing -- we really have immaterial revenue, very immaterial in quarter three and quarter two relative to COVID. It's starting to ramp on the awards that we have in quarter 4, but still relatively minor. When you look to 2021, it is picking up. However, we feel like we've looked at it pretty closely and on -- particularly on the vaccines that we have, we're being balanced in terms of how those can play out. And as many have started to talk about if you get one or two that work, what happens to the other? So we've tried to be relatively balanced there. Tycho, could you just ask the second question again, please?

Tycho Peterson -- JPMorgan -- Analyst

Just on the EBITDA margin leverage. Your guidance for the fourth quarter, is that all coming from ForwardBound and the lower cost for remote monitoring? Or there are additional cost levers you're pulling here? That was the question.

Jason Meggs -- Chief Financial Officer

Yes. So it's really ForwardBound continuing on and revenue continuing to make progress on the direct fee side. The normal seasonal items that we see, right, in quarter four is -- quarter four is always our seasonally strongest margin quarter, whether it's contracts change orders, risk share type items on the commercial side, these sorts of things. And then on the expense side, you cap out on your taxes and you have your vacation and PTO changes. So, it's really those things that are driving that increase sequentially.

Tycho Peterson -- JPMorgan -- Analyst

Okay. And then just last one on Commercial. How should we think about the decline in backlog for Deployment Solutions? Do you think that starts to reverse in the fourth quarter? Or...

Jason Meggs -- Chief Financial Officer

Yes. So it's been -- on the Deployment Solutions side, while we haven't experienced meaningful COVID cancellations that's put a divot right in front of us, we have seen things that have been delayed, pushed out and canceled whether it's product strategies that are changing or it is COVID decisions where they're looking at their portfolio, their funding, whatever it might be, of how they want to allocate things, and we have seen some cancellations. That did start to moderate for us in quarter 3, and we see that continuing to happen in quarter four and beyond. We have good pipeline. We're looking at next year. We have talked about the partnerships that we were awarded in quarter 2, and now we have these two integrated launches for the top 20 pharma on the COVID side. Not really any of that's in our bookings yet. So as we look at those opportunities, we do expect to see our backlog start to grow on the Deployment Solutions side in quarter 4, but really, it's quarter four through quarter 2, where you need to see that growth come in to be able to drive the forecast. And we feel like we have good line of sight to a pipe to do that.

Tycho Peterson -- JPMorgan -- Analyst

Okay. Thank you.

Operator

Thank you. And our next question comes from the line of Patrick Donnelly with Citi. Your line is now open. Please go ahead.

Patrick Donnelly -- Citi. -- Analyst

Great. Thanks. Jason, maybe just expanding on that last piece. When we look at the '21 guide, can you just give a little more color and talk through kind of the progression? How we should think about clinical versus commercial, particularly commercial ramping through the year? What assumptions kind of are made there, both on the growth side and the conversion side? I just want to make sure we're thinking about it right there.

Jason Meggs -- Chief Financial Officer

Yes, Patrick. Good morning. So, when you think about the growth of the businesses, and Alistair hit on this, we're seeing strong growth in both businesses. next year, and that is a little stronger growth on the direct side than the reimbursables given what we've been talking about. So, thinking about that on the clinical side, when you look at the burn rate, we expect to see that to continue to progress from the 9.2% up throughout the year with it being a little lower first half than second half. And again, being balanced on the vaccines and things of that nature on the COVID side from that perspective. Commercial will be -- like I mentioned earlier to Erin, we'll start to see year-over-year growth in the first half and then these opportunities that we have out there that aren't in backlog yet on the Deployment Solutions side will start to come in and feed second quarter and beyond. So we'll really start to show the growth in quarter two and beyond there, and communications and consulting have continued to build backlog, have strong pipes and performed well this year, so relative to our expectations. So that's kind of how we're thinking about it. And on the margin side, we're obviously guided to a midpoint of 14.3%, which is up 50 basis points from 2019. And we're -- from that 14.3%, we're continuing to focus on that 30 to 50 basis point progression. And then obviously, we need to layer in Synteract to those assumptions, which we gave the high-level revenue there. So that's how we're thinking about it, Patrick.

Patrick Donnelly -- Citi. -- Analyst

Yes. No, that's helpful. And maybe just quickly expanding on the margin side, 30 to 50. I appreciate that color. How should we be thinking about some of the temporary cost reductions you guys have made? I know you've given good color about which -- how much that makes up of the expansion this year. How much of those costs come back next year? Maybe just talk through some assumptions around what makes up that 30 to 50 of expansion?

Jason Meggs -- Chief Financial Officer

Yes. Well, it's obviously growth. So think about the growth of the underlying business coming back as we continue to recover from COVID and you get leverage out of that, offset by some of these things like the compensation adjustments we made, travel expenses being down, other things that we have done, delaying merit and promotion-type items to offset the revenue reduction this year. They start to come back. I don't necessarily have a percentage at this point. We're still working through the bottoms-up detailed budget. However, we have good line of sight to the revenue growth and the new customer relationship standing up. And underneath all the COVID, this year, in 2020, the relationships that we have in clinical that we talked about as a margin drag this year are actually starting to get better and better. So you start to see some leverage there. And then we have the new projects and relationships that we've talked about standing up. And ForwardBound is -- we talked about in September pulling ForwardBound up and pulling it forward. And we continue to see more and more opportunity there in terms of our operations network and other automation opportunities. So, ForwardBound is a key driver to that as well.

Patrick Donnelly -- Citi. -- Analyst

That's really helpful. Thanks Jason.

Operator

Thank you. And our next question comes from the line of John Kreger with William Blair. Your line is open. Please go ahead.

John Kreger -- William Blair -- Analyst

Hey, guys. Thanks. Question going back to Synteract. I know the pandemic has distorted things. But what sort of growth were they getting sort of pre pandemic? And is that a reasonable expectation going forward as well?

Alistair Macdonald -- Chief Executive Officer

Yes. John, yes, I mean, good growth from them. I think the drive they'd had in focused areas really helped to power that. And I think what we've seen in terms of the sales conversion when we're looking at due diligence obviously through Q3 and into Q4 a little bit, they're back to those conversions that they saw pre COVID. So they have a headwind like everybody's had in Q2, but they've recovered very strongly from it, and we're very encouraged by that. And I think we can help them drive more of that as we bring more services and more capability to them.

John Kreger -- William Blair -- Analyst

Great, Alistair. And Synteract allow you to -- does that help or hurt the sort of 30 to 50 bps in margin improvement annual goal?

Jason Meggs -- Chief Financial Officer

Hey John, it's Jason. Those guys have done a nice job of -- over the last several years getting capabilities built out, acquiring companies, growing organically, getting the infrastructure built out to grow. And that has put them in a little bit of a position where their margins are an opportunity for us as we look to 2021 and beyond. So think about it as coming in, we have an opportunity to optimize over the year as we grow more, drive those revenue synergies. We have opportunity to take revenue that they -- Synteract might outsource today, bring that into our employees. It's revenue's revenue, but it comes at a higher margin. Their utilization is strong, but not as optimized as they believe it can be when you think about the broader Syneos Health and what we can put into the top of their funnel. SG&A structure, as I mentioned to Dave, right, we have an opportunity to pull things in there and just make it more efficient for them and their customers and then your regular procurement items, et cetera. So it's going to be immediate opportunity to optimize that, and it will help us over time, but 2021 will be a year to get to work on it.

John Kreger -- William Blair -- Analyst

Great. And Jason, just one more. The early look at '21 is really helpful in terms of the top line. Can you help us understand? Are you assuming much in the way of a change for some of the operational metrics that you talked about, which have been challenging? In other words, are you assuming much in the way of improving enrollment growth, ability to do on-site monitoring, things like that?

Jason Meggs -- Chief Financial Officer

We are. We've factored it in, John, for sure, but we are expecting improvement once we get through sort of quarter 1, quarter two and then starts to level out. So, first half, I would say, still impacted by these items that we've talked about today and then you start to come out of that in the second half.

John Kreger -- William Blair -- Analyst

Great. Thank you.

Operator

Our next question comes from the line of Jack Meehan with Nephron. Your line is open. Please go ahead.

Jack Meehan -- Nephron -- Analyst

Thanks. Good morning. First, just a clarification. So the large vaccine study that you won in the quarter, is that one that's affiliated with Operation Warp Speed?

Alistair Macdonald -- Chief Executive Officer

No. It's, well, different geography, if you want to think of it that way. So -- but supported by government like Warp Speed is in the U.S.

Jack Meehan -- Nephron -- Analyst

Okay. Understood. And then back on Synteract. So I appreciate the color around revenue profile. Anything that you can add around margin profile. Is that similar to the makeup of Syneos today?

Jason Meggs -- Chief Financial Officer

Jack, it's Jason...

Alistair Macdonald -- Chief Executive Officer

Go on, Jason. I was going to say I think we covered it, but yes, we have some margin improvement opportunity with them as we take out some SG&A leverage or bring in more SG&A leverage. But Jason, I think, can answer.

Jason Meggs -- Chief Financial Officer

Yes. I mean if you look at our clinical business now and, really, overall, the total company, it's lower for the reasons they outlined in terms of they've been building scale, building out global capabilities, et cetera. So all the things now that's solved for them, their technology investments, their go-to-market investments, we're going to be able to help with that. So it's going to be lower coming in, but the opportunity to -- that we have line of sight to be able to drive that up.

Jack Meehan -- Nephron -- Analyst

Got it. I guess I was just trying to think about what it could add in terms of earnings contribution. How that might impact the 2021 guidance you laid out?

Jason Meggs -- Chief Financial Officer

Well, I would think about it in terms of it being inherent in the range that I gave in terms of the 30 to 50 bps. It just could result in -- we need to get it in and look at it and see what all the opportunities and how quickly we can get after it. But it's going to be potentially driving toward the lower end of that range at this point is how I think about it.

Jack Meehan -- Nephron -- Analyst

Great. Thanks Jason.

Jason Meggs -- Chief Financial Officer

You're welcome.

Operator

Thank you. And our next question comes from the line of Elizabeth Anderson with Evercore. Your line is open, please go ahead.

Elizabeth Anderson -- Evercore. -- Analyst

Hi guys. Thanks for the questions today. I was just thinking as we're thinking about 2021, how do you think about like some of the FDA guidance in terms of how to deal with trials that have been paused or delayed or some other kind of disruption? And what kind of opportunity that could create for you guys in terms of like new additional work? Or is it -- does some of that fall into some more -- like more fixed price type of things? Thanks.

Alistair Macdonald -- Chief Executive Officer

It's a good question, Elizabeth. I think it's -- as we get project, each project almost will have to be considered piece by piece as to where it's at in terms of its overall completion, enrollment, the regulations around it, patient waivers, project deviations, et cetera, that all need to be addressed. So at the end of the day, each project that's affected, you want to be able to put together a package that's going to go into the regulator that explains what happened and what was done to cover it. So yes, I do think there's opportunity there. Obviously, some of that will be work that's covered by changes in scope and additional scope to make sure things are covered. But I think, for us, as with everybody else, those -- that review on a project-by-project level will be the key to kind of identifying that.

Elizabeth Anderson -- Evercore. -- Analyst

Okay. That's helpful. And sorry to beat a metaphorical dead horse, but the 30 to 50 bps of margin expansion that you talked about in '21, that's the core business ex Synteract, yes?

Jason Meggs -- Chief Financial Officer

It is. However, I would think about bringing Synteract in, in terms of being captured in that range. We just have -- to get it in and figure out exactly what it allows us to do within the range.

Elizabeth Anderson -- Evercore. -- Analyst

Okay. Thank you.

Operator

Thank you. And our next question comes from the line of Donald Hooker with KeyBanc. Your line is open, please go ahead.

Donald Hooker -- KeyBanc. -- Analyst

Okay, great. Good morning. I know this has gone along, so I'll be brief, and I guess we have a follow-up call anyhow. But just all the moving parts in the Commercial Solutions segment that we're tracking here, is there -- can we step back maybe and think over the next three to five years and kind of revisit what kind of a -- what is kind of a normalized kind of revenue growth that investors should expect for that segment, given all the noise we've seen up and down over the past year or so?

Jason Meggs -- Chief Financial Officer

Yes. Don, it's Jason. I'll start and then Alistair and/or Michelle can chip in. When we look at and think about that business, it's one where the outsourcing penetration, particularly on the field team side, has been less consistent and up into the right at then, say, how the outsourcing penetration and customer behavior goes on communications and consulting and then clinical. So that's the one area of the business that you really focus on. When we look at it over time, right, and we factor in exactly what we do and the addressable market we have within the vast SG&A spending that happens or, I guess, as spending that happens with pharma companies, we still see that we can grow the business, a market that's growing 5%. It just might not be up into the right at that 5%. And then we think that we can take a share in that space. So that's how we think about it, but it could be that it's just not as consistent, as, say, the clinical business is from quarter-to-quarter.

Donald Hooker -- KeyBanc. -- Analyst

That makes a wonderful sense. And thank you for that perspective.

Jason Meggs -- Chief Financial Officer

You're welcome. Thanks Donald.

Operator

Thank you. And our next question comes from the line of Dan Brennan with UBS. Your line is open. Please go ahead.

Dan Brennan -- UBS. -- Analyst

Just a question on some of the metrics you gave on enrollment with COVID. I'm just wondering how sensitive are sites patients to COVID. I think since cases picked up early October, CRO stocks have lagged and there's a concern that trials are really going to be impacted. I'm just wondering, I would think there'd be a lot of lessons learned, a lot of ways to mitigate this. So is there any way just to give us a flavor for kind of what you see at the front end with clinical trials as we watch these COVID cases move around?

Alistair Macdonald -- Chief Executive Officer

Yes. Sure. It's a good question, Don. It is -- it depends on therapy. I keep going back to this answer, but it depends on the therapy. It depends on, is the treatment super critical for the patient that they have to go in? Is it a matter of life and death, almost? So oncology patients are going to go in now. And I think the difference we're seeing now versus what we saw in kind of the May, April time frame is because sites have social distancing set up. They have the perspex screens. They have the sanitizer. They have met -- they can give assurance, I think, that if a patient comes in, they're not going to put themselves at extreme risk as long as they follow the social distancing and wearing a mask and all that kind of jab. So I don't expect it to pull back markedly, but I don't -- I think this next wave of COVID, as we all fight through it, will -- it slows down the ongoing increase in enrollment and engagement, right? So rather than it creating -- rather than it cratering everything back down like it -- like we saw in the March, April time frame, I think it just plateaus it. And you'll see a -- we expect to see a continued increase but a slower pace and hence some of the pullback on the guide for Q4 because we anticipate that the pass-throughs that come off of that additional enrollment will slow down. So that's kind of how we think about it right now.

Dan Brennan -- UBS. -- Analyst

Got it. And maybe just one other, just in terms of the impact as you look out with remote monitoring and on the Deployment Solutions probably seeing a little -- obviously being affected. Being back as you look out whether it be '21, '22, how lasting are these solutions? And is it hit the revenues a little bit negatively, but it's a neutral to EBITDA because there's lower cost? Is there any way to think through what this means beyond 2020?

Alistair Macdonald -- Chief Executive Officer

Yes. You broke up there in the question a little bit, but I get the general gist. I think we expect to see an elongation of more remote and a more adoption of remote monitoring in future projects, right? So that lowers the pass-through yield. And it pulls back a little bit on the per unit revenue, but you can get more units done because you're not -- monitor is not traveling for a day to the site and a day back. They're doing a remote visit right till that day. They do a remote visit the next day. So you can actually get a bit more production, which I think is positive for the margins. And obviously, there's a reduction in travel expense there, which is just empty revenue anyway. So again, which kind of dilutes down the margin, obviously. So again, you get a bit of margin lift there. So I think there's an ongoing. On the clinical side, you get those. So I think we've proven, Michelle's team has done a fantastic job of shifting to the more omnichannel. We've christened the system now with Kinetic. I think the engagement we're seeing with Kinetic and the results that we're seeing from Kinetic we're putting together a wide paper on an experience that customers had with using the Kinetic system and the uplift that they've seen in their overall sales because of the use of Kinetic as a more engaging, more multichannel methodology to speak to HCP. So I think that will be a longer lasting, and we said a little bit in the prepared remarks that we don't anticipate having to go face-to-face 100% of the time in commercial now to drive success of a law and jaw success of the sales pack -- sales for a drug. It's -- I think that will be one of the -- that will be the big lasting change in the commercial side, which will help margin, I think.

Dan Brennan -- UBS. -- Analyst

Great. Thanks Alistair.

Alistair Macdonald -- Chief Executive Officer

Thank you.

Operator

Thank you. And I'm showing no further questions at this time. And I would like to turn the conference over to Mr. Alistair Macdonald for any further remarks.

Alistair Macdonald -- Chief Executive Officer

Okay. Thank you, Michelle. So again, everybody, a sincere thanks today to the entire Syneos team for all they've done in the face of what have been unprecedented conditions throughout the year. We remain very confident in our market position. And I look forward to building on our long-term momentum as the recovery from COVID continues. So thanks, everybody, for your attendance today and for your interest and investment in our organization. Please be safe. Have a great day and be good. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 73 minutes

Call participants:

Ronnie Speight -- Senior Vice President, Investor Relations

Alistair Macdonald -- Chief Executive Officer

Jason Meggs -- Chief Financial Officer

Paul Colvin -- President, Clinical Solutions

Robert Jones -- Goldman Sachs. -- Analyst

Eric Coldwell -- Baird -- Analyst

Dave Windley -- Jefferies. -- Analyst

Erin Wright -- Credit Suisse -- Analyst

Tycho Peterson -- JPMorgan -- Analyst

Patrick Donnelly -- Citi. -- Analyst

John Kreger -- William Blair -- Analyst

Jack Meehan -- Nephron -- Analyst

Elizabeth Anderson -- Evercore. -- Analyst

Donald Hooker -- KeyBanc. -- Analyst

Dan Brennan -- UBS. -- Analyst

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