What changed in this filing

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Item 1. Business

2025-03-03 compared with 2024-03-13 · 142 added, 159 removed, 318 unchanged (49% of the section changed)

Fortrea Holdings Inc.

is a leading global contract research organization (“CRO”), providing clinical development, patient access solutions and consulting to the life sciences industry.

We provide phase I through IV clinical trial management, clinical pharmacology, differentiated technology-enabled trial solutions and post-approval services.

is a leading global contract research organization (“CRO”), providing biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology and medical device customers.

We provide phase I through IV clinical trial management, clinical pharmacology, and consulting services for our customers.

For more than 30 years, we have supported our global pharmaceutical, biotechnology, and medical device customers across more than 20 therapeutic areas, providing agile delivery models that include Full Service, Functional Service Provider (“FSP”), and Hybrid structures.

We believe we are well positioned to leverage our global scale, access to clinical data-driven insights, industry network, and decades of experience to bring customers distinctive, expert solutions.

Our team of approximately 18,000 employees provides services in about 90 countries.

We believe we are well positioned to leverage our global scale, scientific and therapeutic expertise, access to clinical data-driven insights, industry network, and decades of experience to bring customers distinctive, expert solutions.

Our team of approximately 15,500 employees provides services in approximately 100 countries.

Our solutions streamline the biopharmaceutical product and medical device development process.

Additionally, we successfully utilize enabling technologies to optimize processes and evolve with a dynamic marketplace.

Fortrea combines decades of domain expertise with the nimbleness required to meet market demand for flexible engagements with large and small customers, delivering solutions that bring life-changing treatments to patients faster and creating value for all stakeholders.

Our expertise in the biopharmaceutical product and medical device development process has enabled us to design service offerings to better meet the needs of customers.

We manage our business in two reporting segments — Clinical Services and Enabling Services.

Our Clinical Services segment brings solutions to market that include clinical pharmacology and comprehensive clinical development capabilities.

Our Enabling Services segment provides patient access and technology solutions that can be deployed as a standalone offering or across our global solutions depending on the scope of our customers’ needs.

This comprehensive platform provides our customers with efficient processes across delivery models.

We manage our business in one reporting segment — Clinical Services.

Fortrea Holdings Inc.

was formed through a spin-off of the CRO business, which we refer to as the “Spin” or the “Separation,” from Laboratory Corporation of America Holdings, which we refer to herein as “Labcorp” or “Former Parent”.

was formed through a spin-off of the CRO business, which we refer to as the “Spin” or the “Separation,” from Labcorp Holdings Inc., which we refer to herein as “Labcorp” or “Former Parent”.

All references in this Form 10-K to “Fortrea”, “the Company”, “we”, “our” or “us” refer to Fortrea Holdings Inc., a Delaware corporation, and its subsidiaries, unless otherwise indicated by the context.

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References in this Annual Report on Form 10-K to “our consolidated and combined financial statements,” “our combined financial statements” and similar expressions refer to the combined financial statements of Fortrea and Labcorp due to the fact that as of certain dates and during certain periods presented in the financial statements, Fortrea was still a wholly-owned subsidiary of, and operated under those businesses of, Labcorp.

Clinical Services Segment:

On March 9, 2024, the Company, together with its wholly-owned subsidiary, Fortrea Inc., entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Endeavor Buyer LLC, an affiliate of Arsenal Capital Partners, to sell the operations of Fortrea Patient Access Inc.

and its subsidiaries and Endpoint Clinical, Inc.

and its subsidiaries;

which are all collectively referred to as the Enabling Services Segment.

The transaction closed during the second quarter of 2024.

Refer to Note 3, “Discontinued Operations” to the audited consolidated and combined financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

• Clinical Pharmacology .

We are a recognized leader in clinical pharmacology, known for exploratory clinical pharmacology and biopharma label support.

We are a recognized leader in clinical pharmacology, known for first-in-human and exploratory clinical pharmacology studies as well as biopharma label support studies.

We offer an integrated clinical pharmacology solution that delivers precision, quality and safety.

Our solutions include our clinical pharmacology units and external partnerships, project management, study design and monitoring, bioanalytics and biomarkers, pharmacokinetics (“PK”), modeling and simulation, and biometrics.

In 2023, we completed a multi-year effort to expand our clinical pharmacology solutions and capacity, which are now fully available for customers.

The expansion included a 100,000 square feet state-of-the-art facility in Leeds, U.K.

offering 100 bed capacity, as well as approximately 20,000 square feet of new or renovated space, adding capacity and capabilities across our clinical research units (“CRUs”) in Dallas, Texas with 100 bed capacity;

Fortrea’s clinical research units (“CRUs”) are located in Leeds, U.K.

offering 100 bed capacity;

Dallas, Texas with 100 bed capacity;

Daytona, Florida with 88 bed capacity;

and Madison, Wisconsin with 88 bed capacity.

The expansion also included new state-of-the-art current good manufacturing practice (“cGMP”) pharmacies in the Leeds and

Daytona CRUs.

All Fortrea CRUs now have cGMP pharmacies within them, enabling on-site manufacture of sterile and non-sterile drug product.

Our offerings include deep expertise in areas such as radiolabeled absorption, metabolism and excretion studies, as well as studies involving normal healthy volunteer and patient populations.

All Fortrea CRUs have current good manufacturing practice (“cGMP”) pharmacies within them, enabling on-site manufacture of sterile and non-sterile drug product.

A global bedside data capture system has been implemented across all CRUs.

• Clinical Development .

We are a leading full-service provider of phase I through IV clinical studies with a flexible approach to serving our customers.

We are a leading full-service provider of phase I through IV clinical and real-world evidence (“RWE”) studies with a flexible approach to serving our customers.

Clinical Development is Fortrea’s largest offering in terms of annual revenue contribution and has been for the last five years.

Services include, but are not limited to, regulatory affairs, protocol design, operational planning, study and site start-up, patient recruitment, project management, comprehensive monitoring, data management and biostatistics, pharmacovigilance, medical writing, and mobile clinical services.

Services include, but are not limited to, regulatory affairs, protocol design, operational planning, study and site start-up, patient recruitment, project management, comprehensive site and medical monitoring, data management and biostatistics, pharmacovigilance, medical writing, and mobile clinical services.

Our service offerings are supported by technological innovations such as digital and decentralized clinical trial capabilities.

We focus on rapidly expanding research areas such as oncology, central nervous system and neurodegenerative, rare diseases, and cell and gene therapies.

Additionally, we have deep scientific expertise in a broad spectrum of therapeutic areas and diseases, such as cardiovascular, renal, autoimmune, metabolic, infectious disease, dermatology, ophthalmology, immunology, inflammation, respiratory, nephrology, rheumatology, women’s health, and MASH (Metabolic dysfunction-associated steatohepatitis, formerly referred to as NASH), among others.

We focus on rapidly expanding research areas such as oncology, central nervous system and neurodegenerative, metabolic disorders including MASH (metabolic dysfunction-associated steatohepatitis), immunology and inflammation (including autoimmune diseases and rheumatology), rare diseases, and cell and gene therapies.

Additionally, we have deep scientific expertise in a broad spectrum of therapeutic areas and diseases, such as cardiovascular disease, nephrology (renal), infectious diseases, dermatology, ophthalmology, respiratory, and women’s health, among others.

Over the previous five years, we have conducted more than 5,925 phase I through IV clinical trial projects involving more than 1,000,000 subjects.

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Integrates multiple disciplines from our service offerings to comprehensively support our customers in their development programs across key geographies.

Our service offering integrates protocol design and operational planning, site start-up and patient recruitment, project and program management, comprehensive site monitoring, centralized monitoring and medical data review, clinical and biometrics services, medical writing, and mobile clinical services.

Our service offering integrates protocol design and operational planning, site start-up and patient recruitment, project and program management, comprehensive site and medical monitoring, centralized monitoring and medical data review, clinical and biometrics services, medical writing, and mobile clinical services.

Our project-centric approach utilizes dynamic team resourcing with agile role-based structures.

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Our ability to tailor our services to customer needs demonstrates the agility we can offer customers across the industry value chain.

Fortrea offers this flexibility at a global scale and we expect to position our team as a partner of choice for customers that require a tailored approach.

Fortrea offers this flexibility at a global scale, and we are positioned as a partner of choice for customers that require a tailored approach.

• Consulting Services .

We provide comprehensive consulting services from product development and regulatory strategy to market access and health economics and outcomes research (“HEOR”), including real-world evidence (“RWE”) services.

Our teams provide expertise, innovation and support for all product development stages (nonclinical and clinical phases I-IV), for small and large molecules, cell and gene therapies and biosimilars, across multiple therapeutic areas, including rare diseases to help customers define the most appropriate stakeholder strategy and development pathway to optimize equitable and affordable access to life science innovation.

Enabling Services Segment:

• Patient Access .

Fortrea has established a comprehensive portfolio of services to optimize patient support, adherence and product access.

We provide solutions for co-pay, reimbursement and affordability assistance, real-time analytics and market access.

Our team operates on behalf of biopharmaceutical product and medical device manufacturers by employing highly trained agents within contact centers and field-based teams.

Our field reimbursement specialists enable healthcare practitioners in the United States to navigate product access for their patients.

Our nurse-educator staffed call centers provide customized patient support programs designed to address barriers to product use and adherence.

We have a non-commercial specialty pharmacy solution providing cold chain storage and specialty prescription dispensing on behalf of biopharmaceutical customers.

Our priority is to help patients gain access to treatments on behalf of our customers.

• Technology Solutions .

We provide our customers access to products that support critical decision points in the lifecycle of their assets.

endpoint Clinical TM (“Endpoint”) provides comprehensive randomization and trial supply management (“RTSM”) technology solutions, automating key trial processes, streamlining site and subject management, improving coordination and collaboration, accelerating time to launch and reducing costs.

Endpoint has expertise in oncology, cell and gene therapies, neurology and other complex therapeutic areas, with approximately 80% of its projects in late-stage studies.

It provides core services through its Pulse, Drive and analytics platforms.

Pulse is its core RTSM technology facilitating patient dosings and inventory services.

Drive is its centralized inventory hub and Investigator Sponsored Trial management services.

Its analytics platform offers cloud-based, cross-protocol clinical trial analytics and insights.

Endpoint has supported more than 100,000 sites spanning more than 90 countries.

We provide comprehensive consulting services from product development and regulatory strategy to market access and health economics and outcomes research (“HEOR”), including RWE services.

Our teams provide expertise, innovation and support for all product development stages (nonclinical and clinical phases I-IV), for small and large molecules, cell and gene therapies and biosimilars, across multiple therapeutic areas, including rare diseases to help customers define the most appropriate stakeholder strategy, evidence generation, and development pathway to optimize productivity, value and outcomes for life science innovation.

Market Opportunity

CROs provide services to customers to assist in phase I through phase IV clinical trials and commercialization to accelerate the development and access of safe, effective medical therapies and devices.

CROs provide services to customers to assist in phase I through phase IV clinical trials and commercialization to accelerate the development of and access to safe, effective medical therapies and devices.

Developing new biopharmaceutical products and medical devices for the treatment of human disease is a complex, costly, and lengthy process.

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We believe these underlying market trends represent a significant opportunity for us.

1 Geoffrey Levitt testimony before Senate Judiciary Committee July 31, 2021.

2 Simoens S and Huys I (2021) R&D Costs of New Medicines:

A Landscape Analysis:

10.3389/fmed.2021.760762 and 2022 Pharma R&D Spend.

1 McKinsey and Company, Fast to first-in-human | Getting new medicines to patients more quickly February 2023

2 Deloitte, Unleash AI’s potential | Measuring the return from pharmaceutical innovation – 14th edition, April 2024

3 Industry Standard Research’s May 2023 report on CRO Market Size and Growth Projections and 2024 Pharma R&D Spend.

Evaluate Ltd.

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Over the past decade, we have seen the biopharma industry leverage science, technology, and AI to advance the level of understanding of the pathogenesis of human disease, and to identify new therapeutic targets and treatments.

Despite a relative downturn in 2022 compared to 2020 and 2021, over the medium to longer term we expect the biotechnology funding to be strong.

R&D spend of large biopharmaceutical companies is forecast to grow at approximately 3% CAGR over the period 2024-2027.

In 2024, biotechnology funding rebounded from the relative downturn in 2022-23 that followed historically high funding levels stemming from the COVID pandemic.

Over the medium to longer term we expect the biotechnology funding environment to be strong.

• Expanding Scope of Capabilities .

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The need for biopharmaceutical companies to expand the commercial potential of their products internationally has been a catalyst for the increasingly global nature of clinical trials.

CROs that can capitalize on extensive datasets to inform decisions and increase efficiency in international clinical trials have benefited from these changing dynamics.

As customers continue to prioritize their R&D pipelines with biologics and advanced therapies, such as cell and gene therapies, additional complex clinical trial capabilities will also be required from CROs.

CROs that can capitalize on extensive datasets to inform decisions and increase efficiency in executing international clinical trials have benefited from these changing dynamics.

As customers continue to reprioritize their R&D pipelines with biologics and advanced therapies, such as cell and gene therapies, additional complex clinical trial capabilities will also be required from CROs.

We are built to handle the increased complexity and global demand that underpin these industry tailwinds.

• Elevated Outsourcing Levels .

As large biopharmaceutical companies seek to reduce the cost and time to develop biopharmaceutical products, they have increasingly relied on CROs for services to preserve flexibility and reduce costs associated with clinical trials and improve time to market.

According to multiple industry investment sources, the CRO market is expected to grow more slowly for the next two years, at approximately 3-5%, and return to a growth rate of 6-9% in the longer term.

The growth is driven by low single-digit percentile growth from large pharmaceutical companies, double-digit percentile growth from smaller biotechnology companies, and a continued drive for more outsourcing generally.

As large biopharmaceutical companies seek to reduce the cost and time to develop biopharmaceutical products, and periodically reprioritize their pipeline investments, they have increasingly relied on CROs for services to preserve flexibility and reduce costs associated with clinical trials and improve time to market.

While some companies anticipate a reduction in Full Service in the near-term, they expect increased use of Functional Service Provider models, which is sometimes referred to as insourcing.

Both Full Service and Functional Service Provider delivery models create demand for CROs, and we believe Fortrea is well positioned as we offer flexible delivery models to the industry.

According to multiple industry investment sources, the CRO market is expected to grow more slowly in the short term, and return to a higher growth rate in the longer term.

Despite the large, attractive and growing market that Fortrea operates in, our business is subject to a number of risks inherent to our industry, including our customers’ ability to access sufficient funding to run clinical trials, our ability to generate net new business awards or our new business awards being delayed, terminated, reduced in scope, or failing to go to contract, and our ability to contract with suitable investigators and recruit and enroll patients for clinical trials, among others.

Any number of these factors could impact our business, and there is no guarantee that our historical performance will be predictive of our future operational and financial performance.

For a description of the challenges we face and the risks and limitations that could harm our prospects, see Part I.

For a description of the challenges we face and the risks and limitations that could harm our prospects, see Part I, Item 1A.

“Risk Factors” included elsewhere in this Annual Report on Form 10-K.

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We have an extensive history as a leading organization with a differentiated service offering.

We believe that our commitment to continuous services and technology innovations combined with Fortrea’s customizable approach and experience across more than 20 therapeutic areas will enable us to continue to differentiate ourselves from peers in the CRO industry.

We believe that our commitment to continuous service and technology innovations combined with Fortrea’s tailored approach to serve both biotechnology and large biopharmaceutical companies and experience across more than 20 therapeutic areas enables us to continue to differentiate ourselves from peers in the CRO industry.

Large and Diversified Customer Base

We have a balanced and diverse customer mix serving large and emerging pharmaceutical, biotechnology, and medical device organizations.

As of the fiscal year ended 2023, one customer accounted for approximately 10.6% of our revenue.

We have a balanced and diverse customer mix serving large, small and emerging pharmaceutical, biotechnology, and medical device organizations.

As of the fiscal year ended 2024, two customers accounted for approximately 14.3% and 10.5% of our revenue.

In 2024, 56% of our revenue came from leading pharmaceutical customers.

We seek to be the partner of choice for innovative biotechnology companies.

We believe our customer base positions us at the forefront of innovation in healthcare and allows us to help our customers efficiently bring the best therapeutic solutions to patients.

We seek to be the partner of choice for leading pharmaceutical companies as well as innovative biotechnology companies.

We believe our broad customer base positions us at the forefront of innovation in healthcare and allows us to help our customers efficiently bring the best therapeutic solutions to patients.

Global and Stable Customer Relationships

Our scale and expertise are key competitive advantages that make us a multi-dimensional partner for our customers.

Our top 20 customers have consistently represented approximately 58% of total revenue for 2023, and 60% for 2022, and 2021.

Our top 20 customers have consistently represented approximately 64% of total revenue for 2024, 61% for 2023, and 55% for 2022.

Additionally, most of our customers use us for more than one service.

On average, our customers leverage three or more of our services.

We believe that our global capabilities and expertise are considered a differentiator by our top customers.

We believe that our global capabilities and scientific expertise are considered a differentiator by our top customers.

With a portfolio of projects that extend over multiple years, our longer-term contract durations give us confidence and visibility into our future revenues.

Access to Actionable Clinical Data and Insights

Access to data is foundational to any CRO and we believe our arrangements with strategic data partners will be differentiated by the quality of insights our data can provide.

We intend to continue to prioritize actionable data as we further scale our data repositories.

We believe that we have the opportunity to optimize the clinical development process through accelerating recruitment, increasing the diversity and improving the retention of patients.

Access to data is foundational to any CRO and we believe our arrangements with strategic data partners provide a higher quality of insights to our customers.

We continue to prioritize actionable data as we further scale our data repositories.

We believe that we have the opportunity to optimize the clinical development process through identification of high performing investigator sites, accelerating recruitment and improving retention of patients in studies.

Further, in 2024 we launched a leading integrated solution to increase participation in clinical trials from historically underrepresented populations.

Expertise Across Therapeutic Areas

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Fortrea’s expertise spans oncology, CNS and neurodegenerative disease, cardiovascular, renal, MASH, rare disease, cell and gene therapy, and many more.

These scientific areas represent the majority of the industry’s drug development pipelines.

These scientific areas represent the majority of the life sciences industry’s drug development pipelines.

Oncology makes up a large portion of our business and continues to grow.

Over the previous five years, we have completed over 1,200 oncology clinical trials involving approximately 250,000 patients and more than 30,000 investigator sites.

In 2023, 46% of our therapeutic based revenue related to oncology studies.

In 2024, 47% of our full service therapeutic-based revenue related to oncology studies.

In addition to Fortrea’s success in oncology, we plan to leverage our capabilities in science, innovation, and technology to successfully capture additional market share across high-growth therapeutic areas, such as CNS and neurodegenerative disease, cell and gene therapy, cardiovascular, renal, MASH, rare disease, and more.

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The oncology market remains an area of unmet medical need that receives significant investment in R&D.

As part of our mission to drive value for customers, we will continue to try to capitalize on the expansion of opportunities in such key areas as oncology, CNS and neurodegenerative, MASH, and autoimmune.

As part of our mission to drive value for customers, we will continue to try to capitalize on the expansion of opportunities in these important, growing therapeutic areas.

While Fortrea has significant expertise and experience in these scientific areas, we believe that there is ample opportunity for future growth.

Support Sites to Solve the “Last Mile” Problems of Patient Recruitment and Trial Starts

Investigator sites have traditionally been a challenging part of the predictability and speed associated with clinical research.

Issues with site productivity and effectiveness, as well as investigator participation, have been exacerbated by the COVID-19 pandemic, global geopolitical challenges, increasing clinical trial difficulty arising from shifts to smaller patient populations and rising protocol complexity, and the proliferation of technology choices.

More positively, many sites and technology start-ups are innovating around data, electronic medical records, and technology.

Fortrea establishes high-value site relationships to support scientific engagement and reduce the time and cost for our customers to develop products.

The third-party clinical sites we work with include healthcare systems, dedicated research networks, large group practices, consortiums, and governmental coordinating bodies that represent multiple research partners around the globe.

We continue to expand our site network collaborations, which currently includes over 180 partnerships across 35 countries.

Our Global Site Advisory Board now includes more than 440 unique sites and includes representatives from customers.

In 2024, we established the China Chapter of the Board and created therapeutically focused site networks, starting with the Early Phase Oncology Network.

We leverage data-driven approaches to target sites that align with our customers’ protocols, with a focus on accelerating patient recruitment, efficiently executing trials with high quality, and enhancing the site experience.

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As noted below, Fortrea is leading a collaboration with top technology innovators in our industry to deliver integrated patient and site centric solutions that streamline the clinical trial experience.

Fortrea offers a range of site augmentation services to support sites with selecting trials, identifying and enrolling patients, conduct and close out of studies.

These services include administrative and clinical support, tools, data and analysis to enable sites to be more productive, help to overcome challenges with disparate technologies, complex protocols and their resource constraints.

We are committed to increasing the diversity of patient populations within clinical trials, and we developed a holistic strategy focused on partnering with customers, sites, investigators, and communities to address this commitment.

Fortrea offers a range of site augmentation services to support sites with selecting trials, identifying and enrolling patients, conducting and closing out of studies.

These services include administrative and clinical support, tools, data and analysis to enable sites to be more productive and help to overcome challenges with disparate technologies, complex protocols and their resource constraints.

We are committed to increasing the representation of patient populations within clinical trials, and we developed a holistic strategy focused on partnering with customers, sites, investigators, and communities to address this commitment.

Through these collaborations and by utilizing innovative solutions to support the diversity plans expected by global regulatory authorities, we will further strengthen our reputation as a strategic partner of choice.

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At the same time, geopolitical events and uncertainties have impacted the locations where clinical trials can be conducted.

In certain countries, such as the U.S., the need for inclusion of underrepresented minorities and other related goals has become paramount.

In certain countries the need for inclusion of underrepresented minorities and other related goals has become paramount.

Fortrea has the scale and expertise to advise, design and deliver our customers’ programs, projects and programs globally.

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For example, there is wider availability of electronic medical record data;

the proliferation of digital health and trial solutions with remote

consent, eCOA, ePRO, connective devices, telemedicine;

the proliferation of digital health and trial solutions with remote consent, electronic Clinical Outcomes Assessments, electronic Patient Reported Outcomes, connected devices, and telemedicine;

the use of natural language processing;

use of artificial intelligence, machine learning and robotic process automation (“AI/ML/RPA”);

use of artificial intelligence (“AI”), machine learning (“ML”) and robotic process automation (“RPA”);

and the integration of genetic, pathology and other data into key decision processes.

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We continue to explore new data sources that enrich our geographic, therapeutic and site data sets.

Fortrea has strategic relationships with a number of top technology vendors in the industry, including Veeva, Advarra, Medidata, and Cognizant among others.

Fortrea has strategic relationships with a number of top technology vendors in the industry, including Advarra, Cognizant, Medidata and Veeva among others.

Through partnerships with leading players, Fortrea aims to bring together best-in-class technologies and leverage Fortrea’s process expertise to deliver integrated patient and site centric solutions that streamline the clinical trial experience, and to enable Fortrea’s digital transformation to drive agility and efficiency.

Over the last five years, we have significantly invested in our platform to advance all facets of our clinical development services, key technologies, and data utilization to better serve our customers.

These investments include AI, ML and RPA, data visualization, a full suite of biometric services and clinical data management globally across all phases and delivery models, RTSM, and digital health and DCT capabilities, among others.

We will continue to invest in our capabilities, our ability to generate insights through data and analytics, reduce cost, and increase the speed and efficiency of clinical trial execution to enhance the quality of our offerings for our customers.

These investments include AI, ML and RPA, data visualization, a full suite of biometric services and clinical data management globally across all phases and delivery models, and digital health and DCT capabilities, among others.

In 2024, we continued to develop and deploy AI and ML technologies that drive speed, agility, quality and enhanced patient safety in clinical research.

Our approach is compliant with “Ethical Artificial Intelligence,” which refers to AI systems designed and deployed in alignment with principles such as fairness, transparency, accountability, privacy and respect for human rights.

We strive to ensure our AI systems operate responsibly, balancing innovation with societal values while minimizing harm and bias.

We plan to continue to invest in our capabilities, our ability to generate insights through data and analytics, reduce cost, and increase the speed and efficiency of clinical trial execution to enhance the quality of our offerings for our customers.

Become the Partner of Choice for Pharmaceutical, Biotechnology and Medical Device Companies

Fortrea partners with pharmaceutical, biotechnology and medical device companies of all sizes, from small/emerging, mid-size, to large.

Fortrea partners with pharmaceutical, biotechnology and medical device companies of all sizes, from small/emerging, mid-size, and large.

Our customers are looking for flexible and agile solutions to support their strategies, competencies and geographic priorities.

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Early sharing of development and pipeline goals, protocols and issues by all parties combined with strong relationship and program management increase efficiency and promote the adoption of innovative delivery models.

Fortrea supports many small and mid-size customers through contributing scientific, therapeutic, regulatory and operational expertise and insights to help shape their R&D strategy and protocol design to achieve their goals.

Fortrea supports many small and mid-size customers through contributing scientific, therapeutic, regulatory and operational expertise and insights to help shape their clinical development strategy and protocol design to achieve their goals.

We provide expert full-service teams, data-driven site selection and patient-centric recruitment approaches to deliver their studies with agility and flexibility, underpinned by quality.

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We will continue to expand our small and mid-size customer base and to build long-tenured partnerships with these customers, enhancing our offerings to meet their needs.

Fortrea also supports leading large pharmaceutical customers as a preferred provider for services across our range of offerings, including Clinical Pharmacology, Phase I-IV Full Service, Clinical/Biometrics/Safety FSP, Hybrid models that combine full service and FSP, Patient Access and Technology Solutions (e.g.

Fortrea also supports leading large pharmaceutical customers as a preferred provider for services across our range of offerings, including Clinical Pharmacology, Phase I-IV Full Service, Consulting Services, Clinical/Biometrics/Safety FSP, and Hybrid models that combine Full Service and FSP.

Customers are seeking to drive acceleration of their pipelines, deliver superior performance, and achieve significant cost reductions in R&D.

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Since our spin-off, Fortrea has collected input from employees and other stakeholders to develop and activate a culture to support our strategy.

Our FOUR culture beliefs underpinning how we care and deliver are:

Our FOUR cultural beliefs underpinning how we care and deliver are:

• Forward Together - I partner with my customers to understand their needs and achieve results together

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a broad range of learning and development opportunities;

our Diversity, Equity & Inclusion (“DEI”) People Advisory Committee to operationalize DEI throughout the organization;

and Employee Resource Groups.

our Responsible People Practices Advisory Committee to operationalize people initiatives throughout the organization;

and Employee Resource Groups (“ERG”).

These initiatives will be supported by investments in process and technology that benefit both our workforce and our customers.

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We are a market leader in clinical pharmacology studies, including highly specialized human absorption, metabolism, and excretion (“AME”) studies.

We are committed to growing our clinical pharmacology business through the recently completed expansion of our existing clinics and our new state-of-the-art facility in Leeds, U.K.

We have integrated technology and artificial intelligence successfully within our clinic scheduling process to optimize the utilization of bed-space and have implemented bedside data capture technology.

We are also focused on optimizing delivery in more complex hybrid study designs that include both healthy volunteers and patients through the utilization of our own clinics in combination with an expanded global site network, to expand our service offerings into phase 1B studies in patients, and serve as sites for phase 2 studies and vaccine studies.

We have integrated technology and artificial intelligence successfully within our clinic scheduling process to optimize the utilization of bedspace and have implemented bedside data capture technology to improve the speed and accuracy of data collection.

We are also focused on optimizing delivery in more complex hybrid study designs that include both healthy volunteers and patients through the utilization of our own clinics in combination with a global site network, to expand our service offerings into phase 1B studies in patients and serve as investigator sites for phase 2 studies and vaccine studies.

Our operations in the drug development services industry involve high levels of competition, consisting of hundreds of small, limited-scope service providers, and a smaller number of large full-service drug development companies.

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From the first touchpoint with a potential customer, we engage our therapeutic, scientific, and project personnel to build an understanding of the customer’s unique needs and culture.

They remain embedded

through the development of the opportunity and throughout the life of the project, program or partnership.

They remain embedded through the development of the opportunity and throughout the life of the project, program or partnership.

This strategy allows us to consult collaboratively with our customers throughout the lifecycle of our engagement.

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Employees are globally dispersed, with 28% in the Americas, 28% in EMEA, and 44% in Asia-Pacific.

Of our global workforce, 97% of employees are full time, and 3% are part time.

Diversity, Equity and Inclusion

Fortrea thrives on an inclusive culture and is a company dedicated to the idea that people at all levels of our organization should reflect the communities we serve.

Diversity, equity, inclusion and belonging are more than just concepts;

Of our global workforce, 96% of our employees are full time, and 4% are part time.

Responsible People Practices

Fortrea thrives on an inclusive culture of excellence and is a company dedicated to the idea that people at all levels of our organization should be supported to contribute at the highest levels each day.

Respecting people and upholding integrity go beyond our cultural belief system;

they are woven into our DNA.

We believe in cultivating a workspace where all employees can thrive.

Our focus on DEI is core and fundamental to our purpose and strategy.

We believe in cultivating a workplace where all employees can thrive.

Our focus on responsible people practices is core and fundamental to our purpose and strategy.

With our code of conduct forming the foundation of who we are and how we work together, our company ethos is to promote the voice of all our employees.

All employees are responsible for upholding the our Code of Conduct, which forms the foundation of our personnel and ethics policies and practices.

Our diversity and inclusion efforts include a top-down element with our CEO signing the CEO Action Pledge committing to collaborate with the business community to drive change in advancing DEI in the workplace.

By signing this pledge, Fortrea has, among other things, dedicated itself to cultivating an environment that supports open dialogue on complex conversations around DEI.

Our Employee Resource Groups (“ERGs”) globally are important levers in driving our culture of inclusion and belonging.

They represent our diverse employee population – Black/African American, women, young professionals, lesbian, gay, bisexual, transgender, and queer (“LGBTQ+”), veteran, Asian, Hispanic, and Latin, and employees with disabilities.

ERGs are led by employee volunteers to foster connections, encourage belonging, support career development, and champion employee voices.

All employees are responsible for upholding our Code of Conduct, which forms the foundation of our personnel and ethics policies and practices.

Building on our CEO's signing of the CEO Action Pledge, we continue to collaborate with the broader business community to drive meaningful change in advancing responsible people practices in the workplace.

Over the past year, we have strengthened our commitment by implementing initiatives that foster open dialogue and promote opportunity across all levels of our organization.

Our global ERGs are important levers in driving our culture of inclusion and belonging.

Open to all employees, they represent our diverse population and are led by employee volunteers to foster connections, encourage belonging, support career development, and champion employee voices.

Workforce Diversity Profile:

The following charts set forth information with respect to our diversity profile as of December 31, 2023.

Global Workforce by GENDER

Workforce by GENDER

Workforce by RACE & ETHNICITY

Fortrea intentionally crafted a DEI strategic framework that focuses on our people (internally) and the patients our customers serve and other partners (externally).

The diverse global footprint of our operations enables us to leverage a robust range of diversity of thought and experience, and this is reflected in our global representation across our management and leadership.

Our DEI strategy is designed to grow and further evolve our inclusive workforce consistent with the changing dynamics of the global workforce.

Our diversity profile as of December 31, 2024:

In the United States, approximately 60% of our employees identify as white and approximately 40% identify as a minority, including 13% who identify as Black or African American.

Approximately 69% of our employees globally identify as female and approximately 60% of employees worldwide at management levels identify as female.

Fortrea intentionally crafted a strategic framework that focuses on our people (internally) and the patients our customers serve and other partners (externally).

Our broad global footprint enables us to leverage broad and deep experience and ideas, and this is reflected in our global representation across our management and leadership.

Our people strategy is designed to grow and further evolve in alignment with the changing dynamics of the global workforce.

Employee Listening and Engagement

Upon becoming an independent company, the Fortrea leadership team made it a priority to connect and hold dialogues with groups of employees from across the world in the Forward with Fortrea Interactive Employee Discussion Series.

Following those discussions we launched our first global employee engagement survey, which is a commitment from our leadership to listen to the voice of all our employees as we build our collaborative culture.

We had an approximately 74% response rate and scored well above benchmark favorability for overall engagement .

We are translating meaningful feedback and insights from the dialogues and the survey results into purpose-driven action planning and impactful measures.

Since becoming an independent company, Fortrea has prioritized connecting with employees through initiatives like the Forward with Fortrea Interactive Employee Discussion Series.

Following these discussions, we conducted our first annual global engagement survey, which set the foundation for our commitment to listening and acting on employee feedback.

In 2024, we built on this commitment by fielding both a pulse survey and repeating our annual engagement survey, achieving a strong response rate in both instances.

The results demonstrate sustained alignment with industry benchmarks and highlight our ongoing progress in fostering a collaborative and inclusive culture.

Learning and Development

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This allows us to cater to diverse learning styles and be more flexible in our delivery methods.

We leverage the latest technology to find innovative ways to enhance accessibility and effectiveness of our learning programs.

We leverage the latest technology to find innovative ways to enhance the accessibility and effectiveness of our learning programs.

We seek feedback from our employees to ensure our methods are creating a supportive environment focused on their development needs.

We ensure learning solutions are deployed and evaluated using technology, tools, and strategies that promote an audit ready, learning culture.

In 2023, we launched the following skills development programs:

Level-Up Learning, Fundamentals for Fortrea Leaders, and Fortrea Mentoring Program.

Level-Up Learning is a dynamic and comprehensive program designed to equip individuals with knowledge, tools and expertise to successfully thrive in their professional lives.

This program focuses on leadership and soft skills.

Key features of this program include real world applications, expert guidance, interactive workshops, and flexible delivery.

This program consists of approximately 20 different leadership and soft skill topics.

Across those topics more than 4,000 trainings were completed.

To create a powerful blend of customized and diverse learning opportunities, we partnered with LinkedIn Learning to include not only leadership and soft skill training but also technical and industry specific topics to fill skill gaps and support career goals.

Fundamentals for Fortrea Leaders is an internal program designed for both new, experienced and rising line managers to equip managers with the skills, knowledge, and tools needed to effectively lead teams, drive performance, and achieve organizational goals.

This program focuses on enhancing leadership capabilities, fostering emotional intelligence, and cultivating a results-oriented mindset to empower managers to excel in their pivotal roles.

In 2024, 118 employees completed this leadership program.

Fortrea Mentoring Program fosters meaningful, one-on-one relationships that promote learning, knowledge sharing, and skill enhancement in a structured and supportive environment.

This program connects experienced professionals with individuals seeking guidance, support and inspiration for their professional growth.

The mentoring program supports our commitment to making the organization an exceptional place to build great careers.

The goal of the program is to increase engagement, create a culture of mentorship throughout our organization, and deepen relationships.

We ensure our learning solutions and development programs are deployed and evaluated using technology, tools, and strategies that promote a user-friendly learning culture that is compliant with the expectations of regulatory authorities and our customers.

Talent Acquisition

Our success is rooted in our sustained ability to attract, develop, and retain a highly specialized and competent global workforce.

We balance this with the importance of managing labor costs while fostering an environment where our employees can thrive and add lasting value to the industry we serve.

We prioritize skills development, facilitating career transitions and retaining talent with a commitment to inclusion and learning opportunities.

We also recognize the need to supplement our talent pools from outside sources and have consistently attracted new employees to Fortrea.

Our Talent Acquisition team gives us a competitive advantage with its diverse and worldwide presence, using a mix of innovative and traditional recruitment strategies.

We continue to build relationships with universities and professional networks, fueling Fortrea with best in class experience and the next generation talent.

Our success is anchored in our ability to attract, develop, and retain a highly specialized global workforce.

We work to manage labor costs effectively while fostering an environment where employees thrive and add lasting value.

We prioritize skills development, career transitions, and talent retention with a strong commitment to inclusion and learning opportunities.

Recognizing the need for external talent, we market our people and brand across the globe and ensure that we are visible to top talent in every region.

Our Talent Acquisition team provides us with a competitive edge through its diverse and global presence, utilizing a blend of innovative and traditional recruitment strategies.

Candidates are meticulously screened and evaluated based on job-specific criteria, and we continuously enhance our candidate experience.

We are building strong relationships with universities and professional networks, ensuring that Fortrea is fueled with best-in-class experience and the next generation of talent.

By actively engaging with communities around the world, we ensure that we provide opportunities to the diverse populations we serve.

Global Benefits, Compensation, and Rewards

At Fortrea we recognize that our success is fused with our ability to attract, engage and retain high-caliber talent in a globally competitive and challenging landscape.

Our comprehensive compensation and benefits programs are thoughtfully designed to reflect our commitment to our employees and their well-being.

Our compensation philosophy is rooted in fairness and transparency and is tied to performance.

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to incentivize high performance, foster long-term commitment to our vision, and align our employees’ success with our corporate ambition.

In addition to delivering on key elements of a dynamic compensation package, Fortrea delivered equity awards to 15% of our workforce in 2023.

These Founder’s Awards recognized the next generation of leaders ascending in our organization with an equity stake in Fortrea’s success.

The Founder’s Awards reflect our commitment to recognizing Fortrean excellence and engaging an evolving workforce.

As a life sciences organization, we recognize that interconnected factors can contribute to a healthy environment.

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At the start of our journey as Fortrea, we held virtual focus groups with numerous Fortrea employees.

During that time of

questioning and listening, we learned a lot about what matters to our employees.

We learned that employees want choices — not just with plan designs, but also with carriers and providers.

During that time of questioning and listening, we learned a lot about what matters to our employees, and we strive to offer benefit choices that reflect what is most important to them.

Health and Safety

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at the federal, state and local level, including the Food and Drug Administration (“FDA”), as well as those of other countries, such as the European Medicines Agency (“EMA”) in the European Union, the Medicines and Healthcare products Regulatory Agency (“MHRA”) in the U.K., the National Medical Products Administration (“NMPA”) in China and the Pharmaceuticals and Medical Devices Agency (“PMDA”) in Japan.

These regulations apply to our customers and are generally applicable to us when we are providing services to our customers, either as a result of their direct applicability, through a transfer of

regulatory obligations from our customers, or as a consequence of acting as local legal representative on behalf of our customers in a particular country or countries.

These regulations apply to our customers and are generally applicable to us when we are providing services to our customers, either as a result of their direct applicability, through a transfer of regulatory obligations from our customers, or as a consequence of acting as local legal representative on behalf of our customers in a particular country or countries.

Consequently, we must comply with all relevant laws and regulations in the conduct of our services.

The following discussion describes the role of the FDA in the clinical drug development process in the U.S.

Clinical trials conducted outside the U.S.

are subject to the laws and regulations of the country where the trials are conducted.

These laws and regulations might not be similar to the laws and regulations administered by the FDA and other laws and regulations regarding the protections of patient safety and privacy and the control of study pharmaceuticals, medical devices or other materials.

Clinical trials are subject to the laws and regulations of the country where the trials are conducted.

The industry standard for the conduct of clinical trials is embodied in the FDA’s regulations for IRB/IECs, investigators and sponsors/monitors.

These regulations collectively are termed GCP by industry, and the Good Clinical Practice (“GCP”) guidelines issued by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) have been agreed upon by industry and regulatory representatives from the U.S., the European Union and Japan.

GCP requirements address, among other things, IRBs, qualified investigators, informed consent, recordkeeping and reporting.

These laws and regulations might not be similar to the laws and regulations administered by the FDA, and other laws and regulations regarding the protections of patient safety and privacy and the control of study pharmaceuticals, medical devices or other materials may apply.

FDA laws and regulations may apply to clinical studies conducted outside the U.S.

if, for example, such studies are conducted under an investigational new drug application (“IND”) or offered as support for an IND.

However, some regions and countries do not allow for clinical trials to be conducted under foreign country legislation.

Therefore, the FDA may waive certain requirements such as the institutional review board (“IRB”) requirements for a foreign institutional review board/independent ethics committee (“IRB/IEC”) that operates in accordance with good clinical practice (“GCP”) but may not meet all the IRB requirements contained in Title 21 Part 56 of the U.S.

Code of Federal Regulations.

if, for example, such studies are conducted under an investigational new drug application (“IND”) or offered as support for an NDA.

Prior to commencing human clinical trials in the U.S., a company developing a new drug must file an IND with the FDA.

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Similarly, the development of new medical devices in the U.S.

requires an investigational device exemption application, unless exempt, prior to conducting human clinical trials.

requires an IDE (investigational device exemption) application, unless exempt, prior to conducting human clinical trials.

For therapeutic and diagnostic products that combine drugs, devices, and/or biological products, these are considered combination products.

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IRB/IECs have the authority to review, approve and monitor clinical trials, and clinical trials are subject to oversight by IRB/IECs.

The industry standard for the conduct of clinical trials is embodied in the FDA’s regulations for IRB/IECs, investigators and sponsor/monitors.

These regulations collectively are termed GCP by industry, and the GCP guidelines issued by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) have been agreed upon by industry and regulatory representatives from the U.S., the European Union and Japan.

GCP requirements address, among other things, IRBs, qualified investigators, informed consent, recordkeeping and reporting.

In addition, certain services, such as manufacturing of investigational medicinal products for use in phase I clinical trials, must conform to cGMP.

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Regulatory authorities enforce GCP and cGMP requirements through periodic inspections, and violations of GCP or cGMP requirements could result in enforcement actions including the issuance of warning letters, civil penalties, product recalls, criminal prosecutions or debarment from involvement in the submission of New Drug Applications/Biologics License Applications (“NDAs” and “BLAs”, respectively).

Our global standard operating procedures are written in accordance with all applicable FDA, EMA, MHRA, NMPA, PMDA, ICH, GCP, and cGMP requirements.

Our global standard operating procedures are written in accordance with all applicable global regulations, including ICH.

This enables our work to be conducted locally, regionally and globally to standards that meet all currently applicable regulatory requirements.

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If a clinical trial is not conducted in accordance with regulatory requirements, the applicable regulatory agency may require that a clinical trial be modified, suspended or terminated, and we or our customers may be subject to a variety of sanctions.

For example, violations could result, depending on the nature of the violation and the type of product involved, in the issuance of a warning or untitled letter, suspension or termination of a clinical study, refusal of the FDA to approve clinical trial or marketing applications or withdrawal of such applications, injunction, seizure of investigational products, civil penalties, criminal prosecutions, or debarment from assisting in the submission of NDAs.

For example, violations could result, depending on the nature of the violation and the type of product involved, in the issuance of a warning or untitled letter, suspension or termination of a clinical study, refusal to approve clinical trial or marketing applications or withdrawal of such applications, injunction, seizure of investigational products, civil penalties, criminal prosecutions, or debarment from assisting in the submission of NDAs.

IRBs may also suspend or terminate research not conducted in accordance with IRB requirements or that has been associated with unexpected serious harm to participants.

After receiving IRB/IEC approval, clinical trials usually start on a small scale to assess safety and then expand to larger trials to test both efficacy and safety in the target population.

The trials are generally conducted in three phases (phases I, II and III), which may overlap or be combined, although the FDA may require, or sponsors may voluntarily conduct, a fourth phase of clinical trials (phase IV) as a condition of approval or to obtain additional data on the product under investigation, respectively.

The trials are generally conducted in three phases (phases I, II and III), which may overlap or be combined.

For applications to the FDA, the FDA may require, or sponsors may voluntarily conduct, a fourth phase of clinical trials (phase IV) as a condition of approval or to obtain additional data on the product under investigation, respectively.

After the successful completion of the first three clinical phases, a company requests approval for marketing its product by submitting an NDA for a drug or a BLA for a biologic product.

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We have established processes and frameworks, including appropriate technical and organizational safeguards, to protect the personal and health information we collect, process and otherwise maintain.

We are also subject to

privacy and security obligations as part of our contractual commitments with our customers and affiliates.

If we fail to perform our services in accordance with these processes, frameworks and contractual commitments, we could be subject to monetary fines, civil penalties or criminal sanctions as are described in Part I.

We are also subject to privacy and security obligations as part of our contractual commitments with our customers and affiliates.

“Risk Factors—Risks Relating to Regulatory and Compliance Matters—Failure to comply with privacy and security laws and regulations could result in fines, penalties and damage to our reputation with customers and have a material adverse effect upon our business.”

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the assessment of potential work-related risks and establishment of work practice and engineering controls, and providing protective clothing and equipment, training, and medical surveillance;

designed to minimize risk to employee health and safety and the environment.

We are committed to reducing our carbon footprint.

We plan to conduct environmental sustainability impact assessments and participate in environmental sustainability rating processes.

We are seeking to implement energy-saving measures within our operations in the future.

Funding for these and similar projects are expected to continue in 2024.

they are designed to minimize risk to employee health and safety and the environment.

We are committed to conducting research in a sustainable manner, in line with applicable regulatory standards and customer requirements.

We seek to comply with all relevant environmental and employee health and safety laws and regulations.

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Our website address is www.fortrea.com, and our investor relations website is located at http://ir.fortrea.com.

Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and our proxy statement for our annual meetings of stockholders, and any amendments to those reports, as well as Section 16 reports filed by our insiders, are available free of charge on our website as soon as reasonably practicable after we file the reports with, or furnish the reports to, the Securities and Exchange Commission (“SEC”.) In addition, the SEC maintains an Internet site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

In addition, the SEC maintains an Internet site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Information on the SEC's website does not constitute part of this Annual Report on Form 10-K.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business