PPD backs away from new facility lease
pharmafile | June 30, 2009 | News story | Research and Development |Â Â CRO, PPDÂ
PPD has cancelled plans to occupy a facility at the North Carolina Research Campus in the US, blaming construction delays which held up the project.
The contract research organisation (CRO) had planned to share occupancy of the 160,000 sq. ft. facility, taking about a quarter of the available space and employing 300 people there.
It had already taken a temporary unit as a home to its first 20 clinical researchers recruits, but that has now closed.
When the deal was announced, PPD's then chief executive Fred Eshelman described the deal as a 'once-in-a-lifetime opportunity'. But the intervening months have not been kind to the CRO sector, and like many of its peers PPD has suffered from project cancellations and delays in the second half of 2008 and early 2009 which have pegged back revenues and eaten into profits.
Unusually for a CRO, PPD also operates a drug development and product partnering unit, and that side of the business has also run into some hurdles. Earlier this month the firm said that its commercial partner for diabetes drug alogliptin, Takeda Pharmaceutical, had postponed filing for approval of the drug in Europe in order to carry out additional studies.
The company has continued to expand elsewhere despite the setbacks. On the CRO side it took over AbCRO in April to expand its presence in Central and Eastern Europe and opened a new office in Japan. Meanwhile, in the same month it also bought Magen BioSciences to expand its portfolio of compounds for the partnering division.
With the US and European clinical research service sectors in the doldrums, many CROs have been diverting investment dollars towards fast-growing emerging markets, and PPD seems to be following the same trend.
The North Carolina Research Campus was set up to bring commercial organisations such as PPD and academic researchers into close proximity, with eight local universities also planning to set up bases on the campus.
PPD's decision to pull away from its deal is a setback for the project, which has cost $1.5 billion to set up and is the brainchild of US billionaire David Murdock. Another company which said it may locate on the site, Pepsico, said its plans are under review.
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