Irish clinical trials group ICON, which plunged by more than 60 per cent on the Nasdaq last month, has said that the discovery of more new drugs and increasing regulatory demands should continue to drive the sector in which it operates.

Mr Peter Gray, the company's chief financial officer, told an investment conference that a growing number of pharmaceutical companies were now out-sourcing their clinical research to contract research organisations (CROs) which takes significant time out of the development process. Productivity in drug discovery was also on the rise, he told NCB Stockbrokers' annual equity conference.

He said regulatory demand would continue to drive growth in the industry, particularly as the Food and Drug Administration (FDA) in the US, a country that accounts for around 60 per cent of ICON's revenues, was considering increasing the requirements for clinical research. The average number of clinical trials per new drug application now stands at 75, more than double the average a decade before.

Mr Gray said the recent decision by an unnamed client to scale back a significant investment project would have a $1.6 million (€1,494,908) impact on revenues in the fourth quarter of the 1999 financial year which ends in May. The move, which triggered the collapse in the share price, would cut revenues by around $3 million next year, although growth was expected to resume in the third quarter, Mr Gray said.

ICON said the scaling back of the contract resulted from a $1 million over-run in the department of the client company dealing with the project and had left 60 of ICON's staff, assigned to the project, under-utilised.

He admitted that cancellations were a risk in the sector but said that getting bigger was one way of overcoming the risks involved in its business.

The conference was also addressed by Mr Maurice Keane, chief executive of Bank of Ireland, who said the bank would like to diversify its business in Britain. He said the bank was concentrating on making Bristol & West, its British subsidiary, as cost effective as possible while keeping an eye out for possible opportunities in that market.