PPD lists market recovery and more acquisitions in 2010 forecasts
pharmafile | January 25, 2010 | News story | Research and Development | CRO, Caprion Proteomics, PPD
Pharmaceutical Product Development (PPD) expects revenues in 2010 to grow around 6% as the high rate of project cancellations in 2009 starts to dissipate, according to chief executive David Grange.
The contract research organisation (CRO) is predicting revenues in the $1.3-$1.4 billion range for 2010, with gains coming as larger pharmaceutical companies turn their attention away from cost-cutting and back to R&D, and funding improves for smaller biopharmaceutical players.
The predictions come at the tail-end of a difficult year for PPD, which suffered like many of its peers from high rates of project cancellations and implemented a top-to-tail revamp of the business to return it to health.
Despite the sales gains, PPD’s profit forecast of $1.00-$1.12 per share came in a little lower than analyst expectations.
Grange said on the call that PPD is well-positioned to follow its strategy of securing high-level deals with pharmaceutical companies because of its financial strength (high cash reserves and little debt) and presence in merging pharmaceutical markets.
“PPD is one of a small number of companies that can compete for complex global enterprise level outsourcing deals,” according to Grange, who gave as evidence a new wide-ranging deal in the oncology area with an unnamed big pharma company.
An international presence is a key part of that refocused strategy. PPD recently acquired two Chinese CROs – Excel PharmaStudies and BioDuro – and now has around 1,000 staff on the ground there.
The company expects to cut other deals during 2010 to ” strengthen our business models, global footprint and capacity”, said Grange.
Other developments at the firm have included the establishment of laboratories to cater for biologics and vaccine product development, a concerted effort to pick up business from government and non-government organisations engaged in healthcare and the opening of a call centre in Bulgaria to expand pharmacovigilance and medical communication services.
The company is also opening a Good Manufacturing Practice (GMP) laboratory in Athlone, Ireland, to offer service such as large molecule testing, extractables and leachables testing, product and materials characterisation and inhalation product testing. The move creates a facility in Europe to match the capabilities of PPD’s cGMP laboratory in Wisconsin, USA. The Irish Medicines Board is due to inspect the new facility at the end of February.
“Strengthening our business models, establishing innovative partnerships, and enhancing our global capacity remain key priorities for us in 2010,” said Grange.
PPD is unusual among CROs as it operates a product development and partnering unit alongside its outsourcing activities, but has been looking to separate the two businesses.
On the call, chief operating officer Dan Darazsdi said the company remains on track to spin the partnering division out as a separate company by the middle of 2010.
• Meanwhile, Canada’s Caprion Proteomics has acquired PPD’s biomarker services division based in Menlo Park, California, for an undisclosed sum. Caprion said it would fulfil PPD’s existing contractual obligations from its facilities in Montreal and a new facility in Menlo Park that will operate under the name Caprion Proteomics US.
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