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This Undervalued Stock May Be Just What the Doctor Ordered

With Big Pharma shifting its drug development toward a strategic-partnership model, wide-moat Icon PLC's scale makes it one of the few companies capable of bidding on and winning these new contracts.

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David Krempa: We think Icon PLC has a positive moat trend. The company is a clinical research organization, or CRO, which conducts outsourced drug development for pharmaceutical and biotech companies. We think its competitive advantages are strengthening due to the industry shift toward strategic partnerships.

Historically, Big Pharma firms such as Pfizer would outsource their clinical trial work to dozens of CROs across the globe. But more recently, we've seen them adopt the strategic-partnership model, where they select just one or two CROs and give all of their clinical trials to those CROs.

David Krempa does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.