Market Intelligence Center  5 hrs ago  Comment 
For a hedged play on Covance Inc (CVD) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Feb. '15 $80.00 covered call for a net debit in the $75.49 area. That is also the break-even stock price for the covered call....
Benzinga  Oct 15  Comment 
CVD Equipment Corporation (Nasdaq: CVV) , a leading provider of standard and custom chemical vapor deposition systems, today announced that it has received in excess of $27.5 Million in new orders during the nine months ending September 30, 2014....
Market Intelligence Center  Oct 14  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on Covance Inc (CVD) that includes 2.09% downside protection. Sell one contract of the Feb....
GenEng News  Oct 10  Comment 
A clinical trial to evaluate an experimental Ebola vaccine has been launched in Mali by the Center for Vaccine Development (CVD) at the University of Maryland School of Medicine (UM SOM), the Center for Vaccine Development of Mali (CVD-Mali) and...
GenEng News  Oct 3  Comment 
Cardiovascular disease (CVD) is currently the leading cause of death of women in every major developed country and most emerging economies. Although about one-third of deaths in women are due to CVD, misconceptions still exist that it is primarily...
SeekingAlpha  Oct 1  Comment 
By Len Zehr: I recently sat down with the management team at Pivotal Therapeutics (OTCQX:PVTTF; CSE : PVO) to discuss the company's VASCAZEN product that addresses Omega-3 deficiency in cardiovascular disease ( ( CVD)) patients, an...
MedPage Today  Sep 12  Comment 
(MedPage Today) -- Among teens with lupus, vitamin D insufficiency may diminish the cardioprotective effect of statin therapy, researchers reported.
MedPage Today  Aug 27  Comment 
(MedPage Today) -- Assessing electrocardiographic change could improve cardiovascular disease (CVD) risk assessment in the elderly, according to a Danish study.
Market Intelligence Center  Aug 26  Comment 
Covance Inc (CVD) traded between $83.45 and $84.40 before closing at $83.96 Monday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Nov. '14 $85.00 covered call for a net...
Market Intelligence Center  Aug 22  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on Covance Inc (CVD). Look at the Nov. '14 $85.00 covered call for a net debit in the $81.06 area. This trade has a duration of 92...


Covance is an international scientific services company and is known as a Contract Research Organization (CRO). The company is contracted by pharmaceutical, biotechnology, agricultural and medical device companies to perform needed services involving drug and chemical development.

Covance is the second largest CRO in the world in terms of revenue, earning $1.36 billion in nine months of 2008 ending September 30, 2008.[1] In 2007 total revenue was $1.6 billion and in 2006 the company obtained 10% of the total global CRO revenue with revenue of $1.5 billion.[2] Yearly total revenue for the company has increased between 2005 and 2007 by 23.4% due to increases in demand, capacity expansion, acquisitions and selling of one of its businesses.[3] Revenue for Covance is driven primarily by the demand for outsourcing of research and development by pharmaceutical and biotechnology companies., Covance has also increased operating and net income margins between 2003 and 2007 by 16.2% and 29% respectively.[4]

Amidst high development costs, companies are increasingly turning to CROs to help move through the drug development and heavily regulated process to bring products to market quicker and and at a lower cost.[5][6] To take advantage of this trend Covance acquired three companies from 2005 to 2007 totaling $81.9 million and has increased its revenue from international deals by 10% over the past year to $85 million.

Company Overview

Covance provides drug development solutions from preclinical (before human testing) through commercialization for six main areas: biotechnology, pharmaceuticals, food and drug supplements, general research and vaccine testing.

Its services are divided into Early Development and Late Stage Development segments and include: research products, antibody products and services, nonclincal development services, risk assessment services, clinical pharmacology services, central laboratory services, cardiac safety services, clinical development and commercialization services.

Business and Financial Metrics

Operating and Net Income Margins [7]
2003 2004 2005 2006 2007
Operating Margin 12.4% 13.8% 14.7% 14.4% 14.8%
Net Income Margin 8.1% 9.6% 10.0% 10.8% 11.4%

Covance reported $1.36 billion in total revenue in the first three quarters of 2008.[1] The company's revenue increased by 15.4% in 2007 (12.8% when excluding foreign currency fluctuations) to $1.6 billion. This increase was partially due to currency movements, but were primarily determined by a 20% increase in the company's early development segment to $778 million (in revenue) and a 6.3% increase in its late-stage development segment to $769 million (in revenue).[8] Strong growth in the company's clinical development services outweighed decreases in its central laboratory, cardiac safety and commercialization services.[9] Covance also realized gains of $0.4 million due to a minority equity position (approximately 20%) in Bio-Imaging technologies and $2 million due to a minority position (approximately 47%) in Noveprim Limited in 2007.[10] As of Dec. 31, 2007 Covance had no debt and $319 million in cash and cash equivalents. Its operating margin has increased 16.2% over the past five years to 14.8% and its net income margin has increased by 29% over the same period to 11.4%.[4] In February 2007 Covance's Board of Directors authorized a 3 million share buyback plan and at the end of 2007 2.3 million remained for purchase under the plan.[11]

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Net Revenue by Location-2007[12]

Net revenue increased 12.3% in 2006 to $1.34 billion. Revenue changes were partially determined by acquisitions, but were primarily due to growth in its early development and late-stage development segments. Growth in the early development segment was fueled by strong performance in its global toxicology, chemistry and clinical pharmacology services, resulting in a 12.6% increase in net revenue. Strong performance in the company's central laboratory services resulted in a net revenue increase in its late-stage development segment of 12.2%.[13]

Net revenues increased 16.9% in 2005 to $1.19 billion. Net revenue growth was supported by strong performance across service offerings in both segments, resulting in a 17.5% growth in the company's early development segment and a 16.4% net revenue increase in its late-stage development segment.[14]

Acquisitions and Divestitures

In November of 2007 Covance sold its Electrocardiogram (ECG) business ("Cardiac Safety Services"), which was part of its Late Stage Development segment to eResearch Technology Inc. The company received an initial payment of $35.2 million and entered into a ten year agreement under which Covance will continue to offer the cardiac safety services. The deal also stated that Covance will be eligible to receive up to an additional $14 million relating to transferred backlog and future contracts.[15]

To strengthen its Early Development segment, Covance acquired the clinical pharmacology sites of GFI Clinical Services in 2005 for $6.2 million and the clinical pharmacology sites of Radiant Research Inc. in 2006 for $66.6 million. Also, in 2006 the company acquired Signet Laboratories Inc. for $9.1 million.[16]

Business Segments

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Percent of Revenue from Early Stage and Late-Stage Development Segments[8]

Early Development Services (47.7% of FY 2007 Revenue, 60.5% of FY 2007 Operating Income)[8]

Covance's early development services mainly support pre-human testing of animals and in vitro (non-animal models) experiments to develop drug and chemical profiles that if required, will then move into clinical trials. These services generated $778 million in revenue in 2007 and comprise six areas: toxicology, pharmaceutical and nutritional chemistry, bioanalytical, clinical pharmacology and research products.[8] Laboratories exist in Indiana, Wisconsin, Virginia, Germany, Singapore, and the United Kingdom.[17] These services range from testing the effects of compounds on immune systems to the development of research products to aid scientists in compound testing.[17] Early development services utilize StudyTracker, an internet-based program that allows customers of toxicology, bioanalytical, metabolism and reproductive and developmental toxicology services to review study data and schedules on a near real-time basis.[17]

Late Stage Development Services (47.1% of FY 2007 Revenue, 39.5% of FY 2007 Operating Income)[8]

Covance’s late-stage drug development services support human testing of compounds (clinical trials) and commercialization of approved drugs. These services generated $769 million in revenue in 2007 and include central laboratory, clinical development, trial support, and commercialization services.[8] These services range from the initial setup of clinical trials to the (domestic and international) marketing of products. The company has experience conducting clinical trials in North America, Europe, Latin America and the Asia Pacific.[18]

Other Reconciling Items (5.2% of FY 2007 Revenue)[8]

Revenues from other reconciling items are associated with reimbursable out-of-pocket expenses. It also includes depreciation and amortization on corporate fixed assets, as well as corporate expenses such as marketing and communications. These items generated $85.1 million in revenue in 2007.[8]

Gee whiz, and I thouhgt this would be hard to find out.

Articles like these put the conesumr in the driver seat-very important.

Market Share

In 2006 the total market for CRO services was estimated to be $15 billion. Of this Covance had a share of 10%, which equated to $1.5 billion.[2]

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Market Share of $15 Billion Total CRO Market-2006[2]

Back in school, I'm doing so much laerning.

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