Medpace Holdings, Inc. 10-Q

Item 1A. Risk Factors There have been no material changes in the risk factors previously disclosed in the Company’s fiscal 2019 Annual Report on Form 10-K (“2019 Form 10-K”) in response to Item 1A of Part I of Form 10-K as amended and supplemented by our Quarterly Reports on Form 10-Q (“2020 Forms 10-Q”), except that we are adding the following modified risk factor discussion relating to coronavirus COVID-19, which should be read in conjunction with the risk factors discussed in our 2019 Form 10-K and 2020 Forms 10-Q. These risk factors could materially affect our business, financial position and results of operations. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may adversely affect our business, financial condition and/or operating results. - 26 - The outbreak of the coronavirus (COVID-19) is materially and adversely affect ing our business. On March 11, 2020, the World Health Organization declared the coronavirus COVID-19 outbreak to be a pandemic. This pandemic has resulted in increased travel restrictions and caused the shutdown of many businesses in countries in which we operate. While we continue to operate globally, the level of activity at each of our locations varies depending on the local governmental requirements and guidelines. Our office staff are effectively working in the office or remotely and our labs are fully operational with modifications made to ensure the safety of our employees. The diversion of resources to treat COVID-19 patients has significantly impacted the operations at most of the investigative sites where patients in our clinical trials are recruited and treated. This has resulted in reduced trial starts and slowed new business awards, each of which results in decreased revenues. Depending on the duration of the disruption, ongoing studies may be cancelled and some of our clients may lack the funding to complete trials which are extended due to slowed recruitment of patients. We work with many smaller clients with limited financial resources and market disruptions may make raising additional funds difficult for those clients. Travel restrictions and business closures have also impacted study participants and clinical sites which affects our ability to efficiently provide clinical trial services. As a result, we are working with our customers to develop solutions to limit disruption to clinical trials while following required regulatory guidelines and maintaining quality to ensure the health and well-being of study participants. These include alternative assessment methods such as virtual monitoring visits. The COVID-19 outbreak has already had a significant adverse effect on the first three quarters of fiscal 2020 and we believe that the outbreak will have a continued adverse impact on our results of operations in the future. In connection with this expected adverse impact, we have also evaluated our headcount needs in a number of geographies and implemented some staff reductions where appropriate. As we cannot predict the duration or scope of the pandemic, the future financial impact on our results of operations and financial condition cannot be reasonably estimated, but the impact will likely be material.