PPD, Inc. (PPD) Q4 2020 Earnings Call Transcript

PPD, Inc. (PPD)
Q4 2020 Earnings Call
Feb 24, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to PPD's fourth-quarter and full-year 2020 earnings conference call. Please note, today's call is being recorded. At this time, I'd like to turn the conference over to Tracy Krumme, vice president and head of investor relations for PPD. Ms.

Krumme, you may begin.

Tracy Krumme -- Vice President and Head of Investor Relations

Thank you. Good morning, everyone and thank you for joining our fourth-quarter and full-year 2020 earnings call. With me today to discuss our results are David Simmons, PPD's chairman and CEO; Bill Sharbaugh, our COO; and Chris Scully, our CFO. During today's call, David, Bill and Chris will be referencing a presentation that can be found on the events and presentations section of our investor relations website.

Before we begin, I would like to remind everyone that our discussion includes forward-looking statements that are subject to risks and uncertainties that could cause material differences in our actual results. On this topic, and also regarding our discussion of non-GAAP measures, I draw your attention to Slide 2 of the presentation. I would also like to remind you of a few important details, which are consistent with previous earnings calls. When referring to our financial performance, we'll be doing so on an ASC 606 basis.

When referring to our commercial performance, including metrics related to net authorizations and backlog, we'll be doing so on a historical ASC 605 basis to maintain comparability with prior periods. These metrics are included in the presentation on an ASC 606 basis, both with and without indirects to aid investors. And finally, given the exceptional circumstances surrounding COVID-19, we have again expanded the operational and financial metrics provided. Please note that post pandemic, we may not provide all these disclosures on an ongoing basis.

And with that, I'll turn the call over to David.

David Simmons -- Chairman and Chief Executive Officer

Thanks for joining us today. I'm pleased to share with you our Q4 and full-year 2020 results. It was a remarkable year of performance for PPD despite operating in the throes of a pandemic. I couldn't be prouder of what our team has accomplished.

We posted strong financial results, beating our Q4 guidance for both revenue and adjusted EBITDA and surpassing our original 2020 guidance, which was provided prior to the pandemic. I'd like to take the opportunity to thank my colleagues around the world for their hard work and dedication. The level of commitment and determination that they exhibited over this past year has been truly amazing. Together, we work through the challenges of the pandemic.

And today, we are a stronger, more agile and more unified company than ever before. Turning to Slide 3. Chris will unpack more details on our Q4 performance. In advance, I'll share with you that the results are industry-leading.

I'd like to focus on our full-year performance because this was a challenging year, yet we still met our goals. I'll share a few key highlights. First, we achieved net authorizations growth of 21% year over year and ended the year with our highest backlog in company history, up 16%. And this is a great accomplishment, especially given our backlog conversion rate experienced little deterioration from 2019 levels.

Next, we realized revenue growth of 16% with double-digit growth in both our clinical and our lab segments and adjusted EBITDA growth of 13%, well above the industry overall. Our balance sheet is the strongest it's been in a decade with net leverage decreasing to 4.0 times at year-end, in line with the goals established in the IPO. And lastly, in January of this year, we refinanced our term loan, extending the maturity of our capital structure and driving future interest rate savings, which Chris will discuss later. Turning to Slide 4.

I'll focus my comments first on the macro environment and then on PPD's position within it. While a challenging year globally, pharmaceutical and biotechnology companies responded, providing hope to society. And leading CROs were critical to their development efforts and outcomes. We and other large global CROs demonstrated our importance to the innovative medicine ecosystem through the fastest-ever shepherding of COVID therapies and vaccines to patients in need.

In addition, we adapted the COVID-related impediments to progress ongoing development programs by leveraging new technologies and processes, such as eConsent, eCOA, telemedicine and direct-to-patient shipments. Consider some of the accomplishments achieved this year. For instance, a leading biotech company bringing a new product to market in the fight against COVID in record time with no track record of having done so before. How does this happen? A partnership with PPD that leverages all of our capabilities in medicine development experience.

This exemplifies the power of our biotech offering and illustrates why we are the ideal partner for biotech companies. The innovative medicine ecosystem is robust. Capital inflows are growing. For instance, look at the biotech funding levels in 2020, more than double 2019 when you look across IPOs, VC investments and the like.

Large biopharma R&D is expected to remain strong into 2021. And governments have increased spending on infectious disease and vaccines. Against this vibrant CRO market backdrop, PPD is best positioned. If we flip to Slide 5, consider which therapeutic areas are attracting the most R&D investment.

Chronic disease, oncology, infectious disease and vaccines represent about 75% of R&D spend by some estimates with more dollars flowing into these areas as we look toward the future. We are uniquely positioned to gain share in each of these therapeutic areas. Our wholly owned site network with a differentiated patient recruitment capability specializes in chronic disease. Oncology is PPD's largest therapeutic area.

And we bring experience in the fastest-growing areas like immuno-oncology, cell and gene therapy and novel trial constructs such as master protocols. Infectious disease and vaccines saw a tremendous growth this year. But this is a PPD franchise that has been strong and growing long before COVID-19. We are uniquely positioned with a rich history of infectious disease experience, world-class labs, specializing in vaccine assay development, and dedicated high-throughput vaccine sites for patient enrollment.

Looking ahead, we expect COVID-19 to become an evergreen component of our infectious disease franchise as the virus mutates, follow-up studies progress and incremental innovation occurs. I don't see a COVID cliff. In the next year alone, our RFP flow suggests that we'll bid on well over $1 billion to $2 billion of COVID-19-related work. As we speak, we are already bidding on more than $750 million COVID-related RFPs.

From a customer segment perspective, capital flows into biotech are extremely strong. PPD pioneered a dedicated biotech unit within a large global CRO. And we have gained share since we launched this offering in 2014. More than 45% of our backlog is now biotech.

And as the government invests more heavily in pandemic preparedness, we are well positioned as an approved government partner within the U.S. and in other geographies. Only a select few CROs can say this. Think of the momentum and positioning of PPD as we enter 2021.

Beyond our core clinical business, consider our labs. Each are a top three leader within their respective markets, including bioanalytical, vaccines, central labs and GMP. This means we are in a leadership position with room to grow. Another example is our investments in late-stage capabilities, our most recent expansion to our addressable market.

Late-stage studies are rapidly growing as regulatory bodies and healthcare payers look for additional data, including real-world evidence. Our peri- and post-approval business, including Evidera, has more than 750 epidemiologists, health outcomes researchers and other scientists with the expertise to utilize and analyze large data sets. Also worth noting, while still an emerging area, decentralized trials are becoming more commonplace. As we continue to invest in our capabilities, we are winning with customers, including more than 60 new awards across all therapeutic areas in 2020 that leverage PPD's unique digital trial design and delivery model.

More broadly, we see the deployment of the digital or decentralized point solutions, like eCOA and home mobile healthcare, relevant to about half of our portfolio. Flipping to Slide 6. The culture and stability of our organization has never been stronger. Our retention rates are industry-leading.

And we grew our colleague base by nearly 10% in 2020 alone. Moving to Slide 7. We start 2021 in the strongest position we have ever been in. Our backlog is 16% larger.

And it's not just COVID work. In fact, our total backlog stood at over $8 billion as of year-end and COVID is only 6% of our backlog. Our unique services have been tested in the fire of the pandemic and been recognized by our customers, both new and old. We have tremendous momentum with our customers across both biopharma and biotech.

And we're well positioned to take advantage of growing R&D spend. We delivered strong adjusted EBITDA margins despite investments and growing headcount to support growth. Lastly, we are committed to a disciplined strategic capital allocation to drive increased shareholder value. With that, I'll hand it over to Bill.

Bill Sharbaugh -- Chief Operating Officer

Thanks, David. We finished the year strong and enter 2021 with momentum across both segments. Starting with clinical development services on Slide 8. We achieved 28% year-on-year revenue growth in Q4, driven by effective prosecution of our backlog.

This yielded industry-leading full-year revenue growth of 13.4%. I will again share some metrics to contextualize the underlying operating environment but again urge you to look at our financial results themselves. While we saw steady improvements to site access in Q2 and Q3, site access plateaued in Q4 and ended the year at approximately 60% as the virus surged around the globe. Nonetheless, our total volume of monitoring visits was robust in Q4 and demonstrates the adaptability of PPD and our sites.

Site activations are tracking to historical averages and new patient enrollment is healthy. More recently, in 2021, we are seeing site access hover around 60%. More broadly, as I reflect on the year in its entirety, I'm proud of our collaboration with clients, sites and regulators. Nearly all of our studies had to implement at least some modification to keep running.

We altered staffing to enable site visits where possible, rolled out new technology tools to manage regulatory changes and reforecast studies and deployed direct-to-patient strategies. With more than 1,000 clinical trial projects ongoing, including greater than 90% unrelated to COVID-19 development, this is no small feat. And even with these adaptations, we outperformed industry benchmarks related to site activations and enrollment. As David mentioned, we also partnered on high-priority programs with pharma, biotech and government organizations, which are becoming a growing part of our ecosystem.

We contributed to all Phase 3 COVID-19 vaccine trials funded by the U.S. government via operation warp speed. And we were also directly awarded programs from operation warp speed that included an adaptive platform trial design. As part of these programs and others, we enrolled more than 80,000 patients in COVID-19 studies.

Looking ahead to 2021, our clinical segment is well positioned. We have grown share of wallet with customers, many of whom leverage the PPD capability they had not used before the pandemic, such as our site network, our labs, our call centers and our post-approval services. The pandemic has accelerated the pace of innovation in our investments in capabilities like real-world evidence, virtual trial techniques and data science. This type of innovation improves business continuity with customers, which they value, and patients who need it.

We have a robust and well-diversified backlog, which we stand ready to prosecute in 2021. Turning to Slide 9. Our laboratory services segment delivered a strong quarter of 41% year-on-year revenue growth. While contributions from COVID programs were sizable, we would have delivered double-digit growth without COVID work.

Our labs are firing on all cylinders, and we established leadership positions on many fronts, including vaccines, both COVID and non-COVID, cell and gene therapies and antibody drug conjugates. During Q4, central lab volumes remained above pre-pandemic levels and utilization remained strong across all of our labs. In addition, we opened our new flagship lab in Suzhou, China. Across all of 2020, our labs added more than 100 new customers and expanded capacity by approximately 10%, most of which is fully utilized.

Looking forward to the rest of 2021, we plan to expand our lab capacity globally by approximately 100,000 square feet. And we will continue to invest in technology and capabilities to ensure we maintain our competitive edge. I'll now hand it over to Chris for detailed financial results.

Chris Scully -- Chief Financial Officer

Thanks, Bill. Good morning everyone. I want to begin by reiterating David's acknowledgment of our employees' hard work and significant accomplishments over the past year. Their resilience through the pandemic is reflected in the strength of the company's financials that I'll be discussing with you today.

Turning to Slide 10. We had another extremely strong quarter of bookings in quarter 4. Net authorizations grew 28.1% over quarter 4 of last year, resulting in a net book-to-bill ratio of 1.30x. RFP and new award volumes were once again robust across both biopharma and biotech customers.

And we recorded double-digit authorizations growth in both our clinical and our lab segments. As with prior quarters, we had no unusual cancellation activity due to the pandemic. For the full year, net authorizations grew 20.5%, resulting in a net book-to-bill ratio of 1.32x. We closed December with a record ending backlog that was up 15.9% over the prior year-end.

This is the largest year-over-year increase in our year-end backlog in six years, setting us up for another strong year of growth in 2021, which I'll be discussing shortly. Important to note is that this growth in our backlog comes despite the company delivering backlog conversion of 11.7% in 2020 or close to our 2019 level of 11.9%, despite the pandemic. As discussed in the past, the strength and stability of backlog conversion is often overlooked but is a key distinction when comparing backlog growth and net book-to-bill ratios across the industry. Moving on to the P&L.

I'm delighted to share that in quarter 4, we beat our guidance for both revenue and adjusted EBITDA. We also finished the full year above our initial 2020 revenue and adjusted EBITDA guidance provided on our quarter 4 2019 results call, which was before the World Health Organization classified COVID as a pandemic. Fourth-quarter revenue increased 30.3%, which, as Bill mentioned, was underpinned by double-digit growth in both our clinical and our lab segments. For the full year, revenues increased 16.1%.

As in quarter 3, both quarter 4 and for the full year, we achieved positive revenue growth, excluding COVID studies. Turning now to Slide 11. Adjusted EBITDA grew 17.9% over the fourth quarter of 2019. Our full-year adjusted EBITDA grew 12.7% over 2019, making it the fifth out of the last six years with 10% or more adjusted EBITDA growth.

This adds to the company's long-term track record of share gains and above-industry top and bottom-line growth. Similar to last quarter, our quarter 4 and full-year revenue growth outpaced adjusted EBITDA growth, primarily as a result of a higher mix of indirect revenues on COVID vaccine studies, which resulted in an optically lower adjusted EBITDA margin. Excluding indirects, revenues grew 12% and adjusted EBITDA grew 13% in 2020 with an approximately 20-basis-point margin improvement over 2019. Lastly, adjusted diluted earnings per share grew 18.2% over quarter 4 of last year and was up 16.7% over full-year 2019.

Moving on to Slide 12 to discuss our balance sheet. In quarter 4, our unlevered free cash flow conversion was lower than historical levels due to a combination of factors, which included: first, the implementation of our ERP system in October 2020, which resulted in an extra payroll period in quarter 4 and caused a temporary delay in invoicing activity during system cutover, which increased our DSOs from 30 days in quarter 3 to 37 days in quarter 4, AR aging remains unimpacted; second, a timing lag between making investigator payments and being reimbursed on COVID vaccine programs, which were quite substantial in quarter 3 and quarter 4 and resulted in a temporary decrease in cash; and lastly, the one-time cash payout associated with the switchover of our LTIP program to a stock-based program with our transition to a public company, which we've discussed previously and was accrued earlier in the year but processed in quarter 4. As nonrecurring items pass and DSO and timing differences on investigator payments return to normal, we expect our cash flow conversion to improve in future quarters. Despite the above, we ended the year with a cash balance of $768 million.

Together with our revolver capacity, this brought our overall liquidity position to $1.07 billion, up 66% over prior year for our strongest year-end position in the last 10 years. Turning to leverage. In line with our commitment at the time of the IPO to reduce net leverage to the low 4s by the end of 2020, our net leverage ratio decreased to 4.0 times trailing 12 months' adjusted EBITDA at year-end, down from 4.2 times at end of quarter 3 and 4.7 times on a pro forma basis at the IPO. Going forward, we expect net leverage to continue to drop into the 3s in 2021.

Where we ultimately land within this range will be a function of, of course, our business results but also of capital deployment decisions in response to opportunities that arise as the year unfolds. Since year-end, we further improved our capital structure. If you turn to Slide 13, you'll see the details of our refinancing completed in January with a new $3.05 billion Term Loan B due 2028 and the doubling of our revolver capacity from $300 million to $600 million. The refinancing both extends the maturity of our term loan and reduces annual ongoing interest expense by greater than $20 million per year at the initial interest rate of LIBOR plus 2.25.

The loan includes an additional step down provision upon achieving net leverage of 3.75x or lower or us further improving our credit ratings. Now, let me turn to our forward-looking guidance on Slide 14. As you are aware, we've traditionally guided to revenue and adjusted EBITDA, which lines up to the growth measures we focused on during the IPO. Starting this year, we'll also be providing adjusted diluted EPS guidance.

For the full-year 2021, we are projecting revenue of between $5.145 billion to $5.304 billion, which equates to 10% to 13% growth; adjusted EBITDA of between $970 million and $1 billion, which equates to 11% to 14% growth; and adjusted diluted earnings per share of between $1.37 and $1.45, which equates to 15% to 22% growth. When comparing this guidance to that for the industry overall, I would encourage you to put growth in the context of our 2020 results, where PPD continued to deliver double-digit growth on all metrics versus many of our peers who had flat to declining growth. Over a 2-year period, the guidance we provided for 2021 equates to 28% to 32% growth in revenue, 25% to 29% growth in adjusted EBITDA and 34% to 42% growth in adjusted diluted earnings per share over full-year 2019. When viewed on this basis, it underscores the strength and the consistency of PPD's operating and financial performance and our resulting growth relative to the peer group.

As for quarterly phasing, the dynamics associated with COVID will result in unevenness of quarterly growth rates during the year. As such, we will continue with the practice of providing next quarter guidance in addition to the full year. In general, we expect higher growth in the first half than the second half, with the most positive year-on-year comparison in quarter 2 and the toughest in quarter 4. For quarter 1 2021, we expect revenues of between $1.277 billion to $1.302 billion, which equates to 19% to 21% growth.

Adjusted EBITDA of between $225 million to $229 million, or 14% to 17% growth and adjusted diluted EPS of between $0.30 and $0.32 a share, which equates to 25% to 33% growth. Our assumptions around items including foreign exchange, tax rate, interest expense and share counts are included in our IR supplement and earnings release. In conclusion, we had another exceptional quarter, beating the high end of our quarter 4 guidance and pre-pandemic full-year expectations. We delivered double-digit growth across all key metrics in 2020, including net authorizations, backlog, revenue, adjusted EBITDA and adjusted diluted earnings per share.

We continue to strengthen our balance sheet and met year-end net leverage targets that we committed to in our IPO prior to the pandemic. We entered 2021 with our highest-ever backlog and expect another year of double-digit growth in revenues, adjusted EBITDA and adjusted diluted EPS. And we are as bullish as ever on the long-term outlook for our business. Before opening the call to questions, I would like to let you know that we will be attending the Barclays Global Healthcare Conference on March 9.

This conference will be held virtually, and we hope to see you there. With that, I'll open up the line for Q&A. Operator?

Questions & Answers:

Operator

[Operator instructions] The first question is from Robert Jones from Goldman Sachs. Please go ahead.

Robert Jones -- Goldman Sachs -- Analyst

Hey. Hey, good morning. Thanks for taking the questions. I mean, I guess, just first on the comments made around COVID, I think the $1 billion to $2 billion in RFPs that you highlighted.

I clearly think that's a significant opportunity and likely probably bigger than what the market was thinking about as far as continued COVID-related work out there. So even if we assume you win your fair share, clearly, it could be a meaningful contributor to bookings over the next 12 months. So my first question was just around how are you thinking about that opportunity relative to the guidance? What's factored in as it relates to COVID, both from the carryover work from 2020 and then this huge opportunity that still seems to be out there in front of you? And then I have to ask, just given what's going on in the market this morning, just any thoughts on scale and the competitive landscape in the wake of some of the consolidation that we now know about?

David Simmons -- Chairman and Chief Executive Officer

Thanks, Bob. Let me start with the first question. And this is in relation to the COVID work, the remarks I had around expecting to bid on somewhere between $1 billion and $2 billion of COVID-related RFPs throughout 2021 and the fact that we had $750 million of RFP value in hand that we're bidding on as we speak. Those are accurate figures.

I'd say what we're trying to do there is to support the assertion that we don't see a COVID cliff. We think this work is durable. I know there's a lot of discussion going on out there. So that's point one.

We do think it's durable. Our assessment of what we might -- what we've won that's in the backlog and what we might win against this space is incorporated into our guidance for the full year but also say that our pipeline across both COVID and non-COVID work is extremely strong. So I also don't want anybody to walk away saying, the COVID strength highlights some weakness in non-COVID work. It's just not the case.

We're strong across COVID and non-COVID work. And the strength is showing up in the pipelines that we have. And also, when we look at win rates in 2020, we look really strong. The final point I'd make on the COVID work is that there was a question, another question around the burn rates on these.

And in case that comes up, I think on the burn rate type of question, we're seeing accelerated burn rates on vaccine work. But therapeutic work looks more similar to what our traditional backlog might be. So in terms of how that would play out, it depends on what proportionality of work we see coming in on vaccines versus therapeutics. And that's very difficult to forecast.

On the second question around the announcement, I assume you're talking about the ICON PRA announcement this morning. And first, I'd say, I respect both competitors. I really don't want to comment on any of the decisions they would make. But in terms of our view of scale in the CRO industry, we think there's a binary kind of Rubicon that one crosses to be considered a scale player.

And we think that the elements of that scale-type Rubicon passing includes does one have physical presence with employees and control of how those employees execute their work in the main geographies around the world as opposed to trying to conduct a study by subcontracting out a lot of work to other CROs that are not within the company in different geographies. So once one has that and has a track record of consistent standard operating procedures and processes that customers trust will deliver the highest quality evidence and will sustain audits from regulators around the world, once you get to that level globally, you have scale. The -- in our view, the benefit of adding scale to that isn't meaningful. Customers don't value more scale on that front as long as you can resource the programs that you're running.

And I'd point to the volume of employees we added last year on that front. So I think that gets to your second question, appreciate you asking.

Robert Jones -- Goldman Sachs -- Analyst

No. Thank you, David. That's very helpful.

Operator

The next question is from Jack Meehan of Nephron Research. Please go ahead.

Jack Meehan -- Nephron Research -- Analyst

Thank you. Good morning. I wanted to focus on the burn rate. So historically, this business has been very consistent when you look at bookings and the burn rate.

You obviously ended 2020 on a really strong note. So back on the burn rate, how much of the improvement sequentially was a dynamic of the COVID work? It seems like the guidance assumes this kind of returns to more normalized levels in 2021. Is that right? And do you think it's possible? Anything you learned amid COVID could actually enable you to carry some of the efficiency into the new year?

Chris Scully -- Chief Financial Officer

Yeah. So Jack, I'll take a stab at this. So the answer is in quarter 4, yes, our burn rate was higher than historical levels. It was at 12.7% versus 11.9% in 2019.

So contributing to that improvement versus quarter 3 and earlier this year were a combination of us both progressing non-COVID and COVID studies. But I would not expect that we would be 80 bps basically above historical levels in perpetuity. A lot of that did kind of come from the benefit of some of these faster-moving large COVID vaccines trials that had progressed at record pace. But we do see it kind of going back down closer to historical levels in 2021.

Jack Meehan -- Nephron Research -- Analyst

Great. And I appreciate you walking through some of the cash flow dynamics. I was wondering if you could also talk about maybe on the earnings side, if I look at the relative drop-through in terms of the revenue upside versus the EBITDA upside in the quarter, it was a little lower than we might have expected. I think some of that's due to pass-throughs.

But I was wondering if some of the crazy ramp in terms of revenue throughout the year, maybe there was some impact on the timing of cost recognition in the quarter as well.

Chris Scully -- Chief Financial Officer

Yes. If you took a look and you extracted pass-throughs from our quarter 3 -- or excuse me, quarter 4 results, you would see that revenue growth in quarter 4 was a little bit higher than adjusted EBITDA growth. So our expenses went up. On a full-year basis, that wasn't the case as we kind of had 20 bps margin improvement, excluding the impact of pass-throughs.

So we did have a phasing of investments that we made in quarter 4 to support the growing backlog of business that we have and make sure we're in great shape for 2021.

Jack Meehan -- Nephron Research -- Analyst

Thank you.

Operator

The next question is from Erin Wright from Credit Suisse. Please go ahead.

Erin Wright -- Credit Suisse -- Analyst

Great. Thanks. Can you break down, at least, anecdotally the trends you were seeing across the different lab segments, for instance, the performance across the core central lab versus the other parts of the lab business? And you noted that expanded lab capacity. How should we think about the timing magnitude of those incremental investments?

Bill Sharbaugh -- Chief Operating Officer

Yeah. Hi, Erin. Thanks for the question. This is Bill.

Obviously, our labs in fourth quarter and throughout 2020 performed really well. You can see that in the results. Going forward, we expect our labs to continue with sustainable growth. We think the mid- to high-teens is realistic.

If you took out COVID work from our labs, we still were growing in the double-digit rate there. But in terms of contribution of individual labs, to your question, we don't go down to that subsegment level. But in Q4, all 3 of our constituent labs were contributing to the results you see here, I mean, growing strongly in the double digits so really well. In terms of the central lab, in particular, which you asked for, I can tell you that sample levels are above pre-pandemic levels, performing well.

And that's a combination of COVID and non-COVID work. So the central lab is pulling its weight in this business for sure.

Erin Wright -- Credit Suisse -- Analyst

OK. Great. And then with this sizable deal that obviously hit the tape, to follow up on that, I mean, does this represent an opportunity for you with CRA defections potentially and associated disruption? I'm just curious what your thoughts are on that as well as further consolidation across CRO space. Thanks.

David Simmons -- Chairman and Chief Executive Officer

Short answer, yes. And historically, the reason I say that is historically, when these like-to-like large-scale tie-ups occur, there -- it creates uncertainty for employees and the firms. And that does seem to have an impact on our recruiting ability versus normal times, when such mergers aren't occurring. And customers at their best are neutral on these types of tie-ups in our experience.

And sometimes customers are negative on these tie-ups for a variety of reasons, one being concerned for disruption to their ongoing study conduct based on this. So the short answer is yes. This has tended to provide a near-term opportunity for PPD.

Erin Wright -- Credit Suisse -- Analyst

Great. Thank you.

Operator

The next question is from Tycho Peterson from J.P. Morgan. Please go ahead.

Tycho Peterson -- J.P. Morgan -- Analyst

Hey. Thanks. Wondering if you could just provide any color on outlook by segment. Right now, we've got both growing about the same level.

But given the momentum exiting the quarter, it seems like lab services could grow a bit faster this year. Any thoughts on that?

Chris Scully -- Chief Financial Officer

Yes, Tycho. For our clinical segment, we expect growth to be in the high single digits to low double digit. And in the lab segment, we expect mid- to high-teens growth.

Tycho Peterson -- J.P. Morgan -- Analyst

Thanks. And then David, a question on the site access comments. You're at 60% now. Just curious if there are steps you're taking to try to kind of work around the current dynamic.

And I know you talked at our conference about a 3x increase in kind of virtual trial awards, still less than, I think, 5% of the backlog. So where do you think that business goes as well?

David Simmons -- Chairman and Chief Executive Officer

I'll start the answer, Tycho, and then Bill will come in with some details. First, when we talk about site access, I listen to some of our competitors speaking and I'm hearing, I think we use 60% access, others will use 70%. I think roughly we're all saying the same thing. It's roughly -- our definitions might be a little different on it.

So I think that's all relatively the same. And I think the reason that you -- we saw some static nature of access to sites was the spike in coronavirus cases and hospitalizations that occurred toward the end of the year. As that's already dissipating and as the vaccines roll out, we expect access to the sites to improve. And likely in the second half of the year, during the second half of the year, we'll get back to pre-pandemic norms.

Now, in terms of the adaptations that have gone on, I think we've said in prior calls that when -- in the second quarter of 2020, when we got hit with the pandemic impacts first, you saw the CROs and our customers react and adapt pretty well. And those adaptations just got better and better. So as we got to the end of the year, when we saw the spike-up again on coronavirus cases and hospitalizations and impact on sites, our ability to burn backlog was better than it was in the second quarter. Remote monitoring, flexing up and down is clearly one element of us doing our job on this front.

The adaptations to be able to have patients continue in studies by taking more of the screening, more of the follow-up visits virtually through telemedicine and tele-type approaches on screenings has obviously helped. So the adaptations have been effective and I think they're here to stay. Let me -- I think I covered a lot. But let me see if anything Bill wants to add in any color.

Bill Sharbaugh -- Chief Operating Officer

Yeah, Tycho. I think maybe to just add to David's comments, he covered, I think, the foundational pieces. But a lot of questions have been asked about site access. Think about it this way, in general, our total number of monitoring visits has remained high throughout the year and actually has increased over last year.

What has changed is the proportion of those visits that are either done on-site or remotely, right? And that has ebbed and flowed as the pandemic has developed and resurged. I think we're talking about Q4 here and I talked about 60%, I think that's parity with others in our industry are reporting. We're reporting the same thing. And as David said, as people are vaccinated and cases go down, I think this site access question will become less and less important.

But the main thing is we've got the ability to deal with it effectively because of the investments we've made previously and the ability of our teams to adapt. So bottom line is, I think, back half of the year, as David said, things should improve significantly with regard to site access. But it has not really slowed down our ability to properly conduct and execute clinical trials.

Tycho Peterson -- J.P. Morgan -- Analyst

OK, thanks. That's helpful. And then one last one just on the scale question, I know you've had a number of questions on it today. But should we think about another 10%-ish increase in headcount this year? And then how are you thinking about bolt-on M&A now that you're down at four times leveraged? Thanks.

David Simmons -- Chairman and Chief Executive Officer

I'm sorry, what was the second part of the question, Tycho? I didn't catch it. I got the first part.

Tycho Peterson -- J.P. Morgan -- Analyst

Appetite for bolt-on M&A.

David Simmons -- Chairman and Chief Executive Officer

OK. On the first question, generally, as you look at our revenue growth projections, you can pretty much track billable resource growth in line with that. So we'll hold SG&A, a lot tighter and expect to get leverage of our scale on that front. But in terms of billable resources, all the people conducting trials, scientists in the labs, technicians in the labs.

That should grow proportionately with revenue, roughly, maybe a little bit lagging, but roughly in line. So if you have the 10% in your mind, that's probably accurate. On the M&A front as a source of capital allocation, we're pretty clear on our strategic growth drivers for the business over the planning horizon. Our planning horizon is 5-plus years.

And we're clear on where we see opportunities to reduce cost or time of evidence generation, again evidence being safety and efficacy of medicines and evidence also on value of medicines to support pricing and reimbursement outcomes, it's how we define ourselves. So we're constantly looking for tuck-in acquisitions that have service capabilities that we don't think we can build organically or the value of acquiring them would be better than the value we would get by investing organically. Most of what we're seeing right now is the return profile of us investing organically has far surpassed anything we're looking at on the M&A front. And I mean, you can see we're growing really well.

So I think that validates where we're going. That said, we're constantly looking. So should something come up, that's a good strategic fit in those zones that help us reduce cost and time of evidence generation, we'll be looking to execute it if the financial rationale is solid. Chris, anything you want to add to that?

Chris Scully -- Chief Financial Officer

The only thing I would add would be to emphasize Tycho's point at the beginning, as our balance sheet is in great shape and we have a lot of flexibility to pull the trigger if and when those opportunities arise.

Tycho Peterson -- J.P. Morgan -- Analyst

Make sense. Thanks.

Operator

The next question is from Dan Brennan from UBS. Please go ahead.

Dan Brennan -- UBS -- Analsyt

Great. Great. Thank you very much. I'm just wondering -- sorry, I joined a little bit later.

Maybe the first question would just be about in terms of your Acurian business, could you just give us a little flavor? I know we discussed obviously the time you went and did the IPO. But I'm just wondering, as you look ahead in '21 and beyond, just more broadly speaking, like how are you leveraging that asset in terms of helping you to find patients? Any other color about other investments you're making in some of your patient identification strategies that are likely more successful than the broader industry?

Bill Sharbaugh -- Chief Operating Officer

Yeah. Hey, Dan. Thanks for the question. This is Bill.

So you referred to it as our Acurian business. We refer to it now as our Accelerated Enrollment Solutions business. And it's a combination of Acurian and our site network. But the bottom line here is we think site ownership is an advantage because it gives us more control over the ecosystem.

And it has proven to be really effective over the last couple of years with the COVID pandemic and our ability to execute vaccine studies. But it's also really valuable, as we've mentioned before, in chronic disease conditions in general. And let me give you a couple of data points to explain what I mean here from recent work. So using our data, we can drive patients to prescreening visits and that allowed -- through telemedicine because we've got an app.

And so that not only allows us to pinpoint the patient, but it offers a really convenient at-home option and it helps us determine if that patient is eligible for the clinical trial or not in a really quick and effective manner. And then we can direct that patient to our own site. And this is really very different from the traditional model. We're going direct to the patient here.

And so I think traditional models were CRO select sites that they think will have patients, but they're never quite sure. This is a much more direct manner to do it. Kind of a second example here is once we've identified a patient, we can really accurately schedule the patient for their visit and subsequent follow-up visits. And we can manage the priorities appropriately with all the trials at that site, and we can really enhance productivity.

And an example of that is in the pandemic, for example, it was really important to make sure that there were diverse patient populations participating in COVID-19 trials. And our site network allowed us to accomplish that objective for sponsors, which was really important. And what I would say here is we've got one of the largest site networks, integrated site networks out there. It's quite a valuable asset and a unique and different asset.

And as it relates to vaccines and infectious disease and chronic disease, we've got a couple of hundred sites here across multiple countries on different continents. And it allows us to give sponsors a really unique solution to run clinical trials.

Dan Brennan -- UBS -- Analsyt

Great. Great. Thank you. And maybe just as a follow-up, just on real-world evidence, could you just remind us kind of how big that business is for you? Obviously, it's one of the faster-growing areas.

I'm just wondering kind of what you're seeing in that business and kind of what's assumed as we go forward in your '21 guidance. Thank you.

David Simmons -- Chairman and Chief Executive Officer

Yeah. Thanks for the question. This is David. First, let me start off by just saying it's -- we're really pleased with our competitive positioning in late-stage services and real-world evidence being a part of that.

And I want to start with some definitional work. Because I think the term gets thrown around and we want to lock in on what we're talking about. So first, we agree real-world evidence is growing -- is a growing area as data and technology enables us to unlock greater insights without placing burden on the patient. So can we generate evidence without patient burden, which is generally put in on a randomized, controlled clinical trial? And we view real-world evidence as the use of real-world data, such as electronic medical records, claims data and registries, to support regulatory approval that demonstrate safety and efficacy of the medicine but also supporting value of medicine arguments around pricing and reimbursement outcomes.

So that's our definitional piece. There are a few capabilities that are critical to effectively deploying real-world evidence programs for clients, mainly and specifically the expertise to identify and interpret the right data related to a specific question. And the second is access to the best data sources available to inform that question. So there's two components.

First, on the expertise front, we acquired Evidera in 2016 to build our expertise and now have hundreds of epidemiologists, health economists, outcomes researchers, PhD-level colleagues on staff. We have experience as well with more than 125 registries that have been completed. And more recently and most recently, we've deployed our expertise to assess long-term outcomes associated with COVID-19. So I'm just informing of our expertise and how strong it is and why we think we're really competitively positioned here.

On the data front, we also have access to the right data for a vast number of questions that are being interrogated for real-world evidence. Specifically, we have experience with more than 100 real-world massive data sources and established partnerships and networks in the U.S., in Europe and in Asia. Where and when we see unique data offerings, we look to get more exclusivity for PPD related to them. And our acquisition of Medimix is an example of this.

So overall, we feel we're in a really strong position to continue to win real-world evidence. I'm not going to go into what size of our business that is. It's all in the clinical segment that we report out and we're not unpacking specific service lines within that.

Dan Brennan -- UBS -- Analsyt

All right. Thank you.

Operator

The next question is from Eric Coldwell from Baird. Please go ahead.

Eric Coldwel -- Baird -- Analyst

Hey. Thank you very much. Good morning. Sorry, I think a number of us unfortunately missed some of the earlier comments, so I hate it if this was already asked.

But clearly, today, big news in the sector, two of your closest peers involved in a merger. It's a hot market.

David Simmons -- Chairman and Chief Executive Officer

What happen? It was a joke. Sorry, go ahead.

Bill Sharbaugh -- Chief Operating Officer

What happen this year?

Eric Coldwel -- Baird -- Analyst

Yeah, believe me. This is not a day to joke. My calendar is insane. so look, I'll jump to the point.

CROs need staff to grow 10% to 20% in this market, pretty much across the board. Everybody is going to grow staff in line with service revenue. And that's double digits for just about everybody, if not everyone. The other side of the equation is these -- your two combining peers are frankly, in a lot of regards, very similar to you, very similar mix.

And top 20 pharmas, they have a lot of overlap. So I think one of The Street's concerns here is going to be that while there's a lot of exciting attributes to that merger, the flip side is that those companies could individually be seeding share, donning share not only of clients but also of employees over the next couple of years as they go through a merger, which historically has never been easy in this group. The question is -- those are opinions. The question is what have you seen in recent large transactions in this group on both of those fronts? And I'm thinking specifically about Labcorp/Covance, INC Research plus inVentiv, IMS plus Quintiles.

I'm curious if the experiences were the same, if they were different and how you might think about employee and client share donations from companies that otherwise could be distracted for a period of time. Thank you very much.

David Simmons -- Chairman and Chief Executive Officer

The simple response to this is our historical experience across like-for-like mergers, as we would call them, including the ones that you specifically call out, support your opinion, OK, both on the colleague attraction, when we recruit the attractiveness of PPD, and our stability at this type of time in each merger stands out. We see the data, our ability to recruit people increases. Customers at their best are neutral when there's customer overlap. In some cases, customers are negative.

I personally haven't experienced customers being excited about like-for-like mergers. So that's been our experience. I don't think I have to expound any more. You kind of answered the question probably more eloquently than I could with your opinion.

The other thing I'd say is your point on we do need people to grow. We need -- specifically need highly trained, highly skilled knowledge workers, technical people in our labs also doing our clinical work and monitoring. So that's an important element of growth for us. So there's two pieces of this.

One is when -- how well do we onboard and train and develop our people? And can we retain them? And I had a chart in the appendix, if you missed it for the other time, I ask you to go back to our slide deck and look in the slide deck itself and you'll see our retention rates relative to industry benchmarks. And I think you'll see it. It's compelling, the difference of PPD on this front. So one, how many people do you have to recruit and add? And part of that is you've got to replace turnover.

So turnover being higher, you first have to get back to square one just to replace your turnover. Then you have to add for growth. So our lot in life looks a lot easier than others that are up in that industry benchmark range. So I just didn't want to lose that point you brought out because it is a key element of our business model.

Eric Coldwel -- Baird -- Analyst

No. I think it's actually a competitive differentiation among the group, it's not so much what businesses you own, but how you treat your people and how you retain them and how you train them. And it's been a key point for decades in this space. I want to just kind of flip the original, I don't know, thesis, monologue, some would say, that I threw at you.

I'd like to flip it on its head a little bit. At the same time the emerging companies might have challenges with retention, does this not also increase your ability to retain? In other words -- or maybe it's not the case because, as you said, they'll have to replace a higher -- they'll have a higher gross turnover, so for net increases, they might have to get more aggressive. But it might seem easier to retain talent if two large direct competitors are involved in a merger?

David Simmons -- Chairman and Chief Executive Officer

Generally, I would say, when there is a feeling of industry-related uncertainty, it has a positive impact on retention rates. I can -- just most recently was the pandemic. When the pandemic hit, how well our colleagues felt that we were taking care of them, ensuring that they were able to safely conduct their work, that we were giving them options of managing their work in a way that they can balance work and family life, when they're kids, many of them who have children, when their kids were home, they couldn't go to school. We think we did a really good job on that to the extent that we're responsive in problems of uncertainty.

It does have a retentative effect. I would believe that would also be the case when we see industry mergers and consolidations, but it's a feeling. I don't -- I mean, I think that on the flip side, we have data that support our ability to attract talent. Now on the retention side and the causality of mergers going on in the industry to us being able to retain.

I would more bet on the quality of the relationship of our line managers with their teams and the feeling of individual team members with their colleagues all buying into the same purpose and mission of the company. That's a stronger force than what's going on outside of the four walls of PPD. Bill is running the vast majority of our people operations. I'd like to hear his comments on this.

Bill Sharbaugh -- Chief Operating Officer

Yeah. I think you're right, David. I mean if you think about the effect of retention in a company like ours, which is a service-based, people-based organization, when we had the big recession back in 2009 and '10, that was positive for retention. This pandemic has been positive for retention.

To your point, whenever there's any uncertainty, people kind of hold tight, batten down the fort. And I think when you add to that the emphasis that we place on people because they are our product essentially and how we look after their well-being, their professional growth, training, etc. It's a real advantage for us at PPD. We kind of articulate that usually through that project manager example.

But there are other examples of that all across the company in different geographies, in different roles. So it remains to be seen, Eric, whether your proposition there, whether it helps our retention, is accurate or not. But it does seem like past experience would suggest so.

Eric Coldwel -- Baird -- Analyst

Thanks very much guys. Really appreciate the answers.

Operator

[Operator instructions] The next question is from Elizabeth Anderson from Evercore ISI. Please go ahead.

Elizabeth Anderson -- Evercore ISI -- Analyst

Hi. Thanks for the question this morning. So how do you guys think about just from a technology perspective, there's obviously different philosophies in the market there about owning sort of a tech asset like in-house versus externally? How do you feel about your positioning there? And sort of what do you see as sort of areas you might be interested in the future?

David Simmons -- Chairman and Chief Executive Officer

Yeah. I mean it's a broad question. Can I just clarify that when you're using technology, what is in your mind is the move toward using digital technologies to be able to decentralize trials and do more virtual trials?

Elizabeth Anderson -- Evercore ISI -- Analyst

Yeah sorry. I should have been more specific. Yeah, that is what I mean.

David Simmons -- Chairman and Chief Executive Officer

OK. Because I think what we've learned outside of that, go to early stages of technology and electronic data capture, CTMS systems, we're quite happy that there's industry leaders like Medidata, Veeva and Oracle that are serving the whole industry and are able to perfect those tools rather than us trying to own them ourselves. So let's move those off to the side. Now when we go into this digital virtual realm, the first thing I would say is we've been focused on this area strategically for a number of years.

So this isn't new to us. And the pandemic actually showed that we were really well positioned in what we've been doing. So our competitive positioning and enabling our customers to take advantage of digital technologies to move more and more of their trial steps or, in some cases, entire trials to the patient has been tested in the pandemic and we've come out well. We've been investing in this space through a combination of building internal capabilities and identifying and partnering with the best vendors for each service and technology vendors, in particular, that you bring up.

And we've even invested in a few ones that we think are unique in their technology abilities, tech players such as Science 37 and Medable to be specific. We believe the keystone factor for success in this arena of taking more of the trial to the patient is the ability to architect the optimal decentralized solution for a study. And I ask everybody to remember that every single clinical trial is a bespoke design. There's no cookie-cutter stamp-out.

Everything is a scientific experiment that has its own unique design, so the applicability and the appropriate applicability of these types of technologies. And some are not technologies but processes like direct to and direct from patient distribution for clinical trial supplies, also phlebotomy draws the patients home, things like that. So when you put it all together, the keystone factor is the ability to architect appropriately with the customer how their trial could benefit from this. So we've invested a lot internally in colleagues and talent who are great at doing this and are learning, capturing the learnings and spreading them across study teams.

On top of this, it's then critical that we have end-to-end capabilities to seamlessly implement that trial design for that bespoke trial design for an individual customer. And through our internal capabilities and partnerships with tech companies and also partnerships for some that are not tech-related, like on the distribution side, we cover the full gamut of what's needed to bring our operational expertise to bear for the deployment of that specific clinical trial. And as I shared in my prepared remarks, our reward volume has been strong. I quoted in the prepared remarks, 60-plus awards that are based on this digital design capability that we have internally, and we believe we're in a leading position.

Elizabeth Anderson -- Evercore ISI -- Analyst

Perfect. That's really helpful. Thank you.

Operator

The next question is from Patrick Donnelly from Citi. Please go ahead.

Unknown speaker

Hi. This is Kara Anamoto on for Patrick. So thank you for taking our question. And I just wanted to touch on margin cadence for 2021.

I know you talked through revenue cadence. But I was wondering how you expect the impact of COVID trials and higher pass-throughs to maybe balance out with maybe some travel coming back into the model, investments in capacity, etc. Thank you.

Chris Scully -- Chief Financial Officer

Yes. So in 2021, we expect roughly 25% to 26% of revenues that come from indirects or pass-throughs. That's fairly consistent, slightly kind of lower than what we had in 2020, albeit that the phasing of kind of those pass-throughs will be more weighted toward the early part of the year on some of the COVID studies rather than later in the year. So you should see some optical margin improvement as the year goes on.

If we exclude pass-throughs in their entirety, we are currently expecting the guidance we've given, somewhere between 10 and 20 bps basically improvement in our margins, excluding pass-throughs, again in 2021 as we kind of delivered in 2020.

Unknown speaker

Great. Thank you. That's helpful. And just on the back of capacity expansion.

Sorry, I know this has been touched on a few times, but how are you thinking about capacity expansion moving forward? Are there certain areas where you're seeing greater demand, whether that's by customer type, therapeutic area, geography? And how does that fit in with your overall capital deployment priorities? Thank you.

Bill Sharbaugh -- Chief Operating Officer

Yes. Kara, thanks. This is Bill. When you say capacity expansion, are you referring to the laboratories or more broadly about the company?

Unknown speaker

I was referring to the laboratory specifically.

Bill Sharbaugh -- Chief Operating Officer

Yes. So listen, our lab business is great and it's growing. I talked about it earlier. I think we're in the early innings of laboratory outsourcing, not related to the central labs but related to our GMP, bioanalytical, biomarker and vaccine labs.

And remember, the work we do is similar to the in-house capabilities of a pharma company. And it takes a long time to build these capabilities at both a global scale and to become a trusted partner. And I think we, as a CRO, have a solid competitive moat here. But that's because historically, over time, we have systematically been adding capacity and we're going to add another 100,000 square feet in 2021.

We're adding new capability, new technology and we're updating facilities. And that gives our customers confidence in our ability to do their work, not only by the results, but when they walk in and they see a facility and scientists who are on par and equal to their capabilities. So I think we're methodically going to do that. We planted a flag in China.

That lab is open. We're talking to customers about work there and have a couple of anchor projects that are moving forward. But we're expanding all of our laboratories with the exception of the central lab because there's a lot of automation and high-throughput capability there, it just really comes down to having the right people and the right instrumentation. But I -- look, we're going to continue to take advantage of capacity expansion.

We're going to do it in a careful way just ahead of demand so that we don't get out in front of ourselves too far. But it's important to do. And the reason PPD is growing is because we've been methodically doing it over the past decade and we've got the capability that is top two in the marketplace.

Unknown speaker

Thank you.

Operator

The next question is from David Windley from Jefferies. Please go ahead.

David Windley -- Jefferies -- Analyst

Hi, thanks. Good morning. Thanks for taking my question. I was hoping to ask two.

First one is on lab. Bill, kind of leveraging your last answer, it sounds like you're expecting going forward the lab business in total to be able to grow in the mid- to high-teens. I gather from what you just said about early innings of outsourcing that the bigger drivers of that are the non-central lab parts of the lab business, if you could kind of give us a view on that or confirm that. And how does that compare if I look at 2020 growth, which was extraordinary -- but kind of 2020 growth ex COVID, was it also in that ballpark? And then my last part of this question would be, I'm hearing that the kit supply process for predominantly central lab -- but kit supply is severely bottlenecked in the industry right now.

And I wondered if you could comment on that, so multifactor on central lab, please.

Bill Sharbaugh -- Chief Operating Officer

Yeah, Dave, I'll start and others can add in. And I'll try to get to your questions here. So yes, confirming that we see mid- to high-teen growth in our laboratories moving forward. As I said, even without COVID, that is happening and I expect that to continue.

One of your questions was, is that primarily outside the central lab and the other laboratory businesses? And I would say, no, we're seeing it across all of our all of our labs. And our central lab is well positioned in terms of experience and capability. It's got everything it needs to grow. And one of the reasons is we're seeing really strong cross-sell activity.

And we made mention that we've got a pretty robust biotech book of business. And as biotechs are generally willing to buy all the services associated with a company when they sign them up, and that includes our labs, and we've been strong on the cross-selling front so that central lab is also growing quite strongly. Just to give you an example, in October of 2020, we were selected at the 2020 World Vaccine Congress as the best central laboratory. We're the winner of that award.

And that's a reflection of 25 years of experience and lots of capability in our central lab, particularly in vaccine, infectious disease, etc. So that central lab is going to continue to grow. Now, your question on supply chain glitches and hitches related to the pandemic. Yes, they have existed out there.

I think at PPD, we were smart. We loaded up and stocked up as we could early in the pandemic and have a pretty robust inventory, which has allowed us to service customers and even have had some customers coming to PPD for rescue work because they weren't able to get things done with their providers. I mean, have we felt a little bit of pain? Yes, we have. But we're in a good spot, and it's actually loosening up a little bit right now.

So I think we're through the worst of it. So what I'm telling you is we're pretty well positioned to grow. And I think through the pandemic, in particular, we've enhanced our reputation as a laboratory, enhanced our ability to keep studies going and, from a scientific perspective, been thought partners with pharma companies in terms of assay development, etc. So I think we're strongly positioned.

David Windley -- Jefferies -- Analyst

That's great. My follow-up question, to change gears, David, in one of your earlier answers you were talking about, I think, site access metrics and monitoring levels kind of moving up. But it just depends on how much of that is remote versus in person. As you think about these DCT or hybrid-type capabilities and moving forward in that type of an environment, how are clients willing to pay for the remote capabilities? Does that change the pricing structure of deals? Does it change the cost structure commensurately? Is margin about the same? And how do the DCT capabilities and your site network complement or compete with each other as the world moves to trials that don't use as many sites?

David Simmons -- Chairman and Chief Executive Officer

Yeah. Firstly, in our own kind of paradigm, as we look at remote monitoring as a way of conducting clinical research and then monitoring it at an investigator site, separate from using digital technologies for a decentralized approach to the study, where we take portions of the study to the patients. On the site access piece, as Bill had mentioned, our total monitoring activity is pretty much where we need it to be. And the percentage of that total monitoring activity that's on-site versus remote varies based on access to the sites.

So while after this is all over, we expect there to be more remote monitoring than what the norm was pre pandemic. We don't expect it to fully take over from on-site monitoring. We need on-site monitoring. So that's on that front.

On the decentralized trial front -- and well, let me go back to the pricing piece. I don't see any pricing impact around the use of remote monitoring in the trials we're using. There is an impact on less travel from our sort of flow-through of travel cost to customers. The benefit to the customers is they have more work, but we're not profiting on that anyhow.

So it's neutral to us. And that happens, it gives us more productive capacity of the monitors. We've trained to do more work if they're not traveling so much. So that is good for the customers, good for us.

That's a net-net answer to your question on pricing. On the decentralized trials, it's far from clear what the economics are going to be on these in total, it depends. If you go to the extreme of a fully virtual trial, your cost structures are completely different. You do have a decrease in number of sites used, but you have an increase in point-to-point solutions on taking parts of the trial to the patient's home; nurse practitioners visiting a patient in their home instead of all the patients coming to one site; supply chain of investigational product; and for biologic elements that would go back for testing from the patient's home instead of from a central site.

So it's too early to tell on the economics of this. And is the benefits of reduced patient burden and access to patients, can one do it at the same cost? Or is it going to be more costly for customers? And will they pay for that? Or would it be less costly? It's -- it wouldn't be wise for me to comment where this shakes out just it's not clear yet.

Operator

The next question is from Ricky Goldwasser from Morgan Stanley. Please go ahead.

Ricky Goldwasser -- Morgan Stanley -- Analyst

Yeah. Hi. Good morning. Thank you for taking my question.

So I have one follow-up on the site access and then one other question. So it's interesting, right, because if we think about it 60% site access, but then to your point, you're really kind of like performing on par. And I understand that remote monitoring and telehealth visits are going to come down post pandemic. But do you see here sort of kind of like a longer-term opportunity as you think about potentially bringing more efficiencies to this site or kind of like rethinking the footprint and how many sites do you need? So that's my first question.

And then the second one, you talked about biotech being 45% of the backlog. At IPO, I think biotech was 30% to 35% of backlog. So can you talk a little bit about what's kind of like market growth versus share gains versus the COVID contribution? So what percent of that 6% of COVID in backlog is biotech? And then as we think about this backlog converting into revenues, am I right to assume that we should think about it as higher-margin revenues compared to more traditional pharma?

David Simmons -- Chairman and Chief Executive Officer

I'm sorry you got -- somebody is going to have to help me with all the questions. I'm sorry, Ricky, you asked like five questions in that. One is site access. OK, do you want to take the site access one?

Bill Sharbaugh -- Chief Operating Officer

OK. Yeah, I'll start, Ricky. This is Bill. You asked a great question here.

Is this level of remote monitoring and this move toward -- sticky move toward kind of decentralized or virtual trials, is it going to create more efficiency in kind of the process of running the clinical trial? And could it potentially result in the need for less sites? It's a really good question. I don't think anyone fundamentally can answer that at this point. We clearly think it's capable to run a clinical trial with a fewer number of sites. That's what our own site network is proving out, right? But it's still early days.

And I think the whole key here is quick identification of eligible patients, abilities to get to them and then to push them in either to your own site network or sites that are close to them and capable of running. But it depends what your definition of efficiency is. If your efficiency definition is time, I think the answer is yes. If your definition is cost, it's unclear now.

Because it just shifts the costs around in a clinical trial. And I think, as David's previous answer was, we're not quite sure. So far, we haven't seen it necessarily result in less cost for a clinical trial. It just moves those costs around a little bit.

It depends how long your view is. I think if your view is a really long view, like a decade, I think it is going to help bring down the cost of clinical trials. But at this point, it's shifting them around because it's early days. That's my personal opinion.

Maybe one of my colleagues wants to add.

David Simmons -- Chairman and Chief Executive Officer

I agree with that. I think that was -- there were other parts of the question.

Bill Sharbaugh -- Chief Operating Officer

Can you refresh our memory, Ricky?

Ricky Goldwasser -- Morgan Stanley -- Analyst

Sure. So the other part was on biotech and just as we think about that growth from 30% to 35% pre IPO to 45%. And how should we think about the margin profile of that book of business when it converts to revenues?

David Simmons -- Chairman and Chief Executive Officer

Yeah. Going back to the beginning, I think biotech in our backlog, this may be going back to 2014, was in the realm of 25% of backlog. So the drivers from then until now, which includes your -- that IPO point, is a step in the journey to where we are now. There are two elements.

The first was we were challenging ourselves on how much visibility do we have to all the RFP volume occurring at biotech companies who were funded and had cash on their balance sheet to run the studies. And we found that our visibility back in 2014 was very low compared to what our aspiration should be. So we went after that. We did a very good job on lead generation, finding access to those companies, engaging them early, getting access to the RFPs.

As we started the early engagement on access at increased volume, our win rates started to increase and the increase in win rates hasn't stopped even through 2020. So if you look at there's capital flows and increase in R&D spending in biotech, in total, that's increased at maybe, let's say, 7% or 8% a year, maybe 9% a year. That's part of what drove it. But the bigger catalytic driver was increasing our visibility on competitive decisions.

And then increasing our win rate against that increased opportunity set. The -- I mean, really, COVID versus non-COVID is not relevant to us.

Chris Scully -- Chief Financial Officer

Just something to add. Ricky, I think on your numbers, I don't think it was at the time of the IPO as low as the 30% to 35%. I believe it was closer to a 60-40 split, if my memory is correct. That said, I think the point that you're saying is the right one, which is that the strength of PPD's biotech capabilities are underappreciated by investors today.

A big reason for our success in COVID was not just basically our strength in infectious diseases and vaccines, but it's really the dominance that we kind of have within the biotech kind of segment.

Operator

The next question is from George Hill from Deutsche Bank. Please go ahead.

George Hill -- Deutsche Bank -- Analyst

Hey, guys. And I'll try to keep this simple. Good morning and thanks for taking the question. I guess the public profile of the clinical research process has never been higher than it is right now.

And I guess my question is do you guys have a way to quantify maybe how many people were not even aware of the clinical research process before, who might be willing to participate now? And kind of how are you best positioned to capitalize on that opportunity?

David Simmons -- Chairman and Chief Executive Officer

I don't have figures on -- you're talking about the general population?

George Hill -- Deutsche Bank -- Analyst

Yeah. I think the general population was probably oblivious to a lot of the clinical trial process before. Now with COVID, everybody knows that the trials are going on and see an opportunity to participate.

David Simmons -- Chairman and Chief Executive Officer

I don't have numbers. But we do have a phenomenon that the clinical trial process historically has enrolled about 3% of people who could participate and meet the criteria of those clinical trials, so which -- and that's what was needed to run the trials. But the thing that we were always looking at and ties back in the last question, if -- to fill that 3% of people who could participate, how many actually were contacted, were aware of the trials, who were asked if they wanted to participate. And we think that, that volume was very low.

And we had an earlier question around the Acurian business we bought as part of enrollment solutions. The thesis of that business is going to the patients to make them aware of clinical trials that are conducted using predictive analytics that would predict underlying disease conditions, so the probability that the outreach would connect them to a trial that they would fit for and that would benefit them would be higher. We have seen that, that's been wildly successful in terms of the ability to prescreen patients, bring them -- on chronic disease conditions, bring them into the clinical trial process, which accelerates the trial, reduces the number of sites needed of tying into this last construct. So I think that there's been more awareness in the general population of clinical research.

But at the patient level, it's a head-scratcher. They don't even know where to go to try to connect. They might talk to their physician, their physician doesn't know where to go. So I think more and more work that our customers and we as an industry do to address this and give an easier path for patients to engage or identify if they can participate, letting them know that they can participate and then connecting them to the trial, so it will be -- it's good for the patients.

It also will help the speed of enrollment in the studies.

George Hill -- Deutsche Bank -- Analyst

OK, thank you very much.

David Simmons -- Chairman and Chief Executive Officer

OK.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd like to turn the call back over to David Simmons for closing remarks.

David Simmons -- Chairman and Chief Executive Officer

Well, I want to thank you all for joining our call. We really appreciate your interest and look forward to addressing you again on our first-quarter 2021 call. And we also hope to see some of you at our upcoming presence at the Barclays global healthcare conference on March 9. And as always, we're available for follow-up, should you need it.

Thank you all.

Operator

[Operator signoff]

Duration: 90 minutes

Call participants:

Tracy Krumme -- Vice President and Head of Investor Relations

David Simmons -- Chairman and Chief Executive Officer

Bill Sharbaugh -- Chief Operating Officer

Chris Scully -- Chief Financial Officer

Robert Jones -- Goldman Sachs -- Analyst

Jack Meehan -- Nephron Research -- Analyst

Erin Wright -- Credit Suisse -- Analyst

Tycho Peterson -- J.P. Morgan -- Analyst

Dan Brennan -- UBS -- Analsyt

Eric Coldwel -- Baird -- Analyst

Elizabeth Anderson -- Evercore ISI -- Analyst

Unknown speaker

David Windley -- Jefferies -- Analyst

Ricky Goldwasser -- Morgan Stanley -- Analyst

George Hill -- Deutsche Bank -- Analyst

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