QUOTE AND NEWS
Penny Stock DD  Jan 9  Comment 
Financial Analysis: Pharmaceutical Product Development, Inc. (NASDAQ:PPDI) generated the total revenue of (stock picks) $415.39 million for the quarter ended September 30th, 2011 as compared to revenue of $365.38 million for the same period...
Stock Blog Hub  Dec 6  Comment 
Pharmaceutical drug research company Pharmaceutical Product Development, Inc. (PPDI) recently announced that its shareholders have approved the merger with privately held firms The Carlyle Group and Hellman & Friedman. The merger was announced in...
StreetInsider.com  Dec 5  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/NNN+to+Replace+PPDI+in+S%26P+MidCap+400%2C+ONE+to+Replace+NNN+in+SmallCap+600/6996835.html for the full story.
StreetInsider.com  Nov 2  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/PPD+%28PPDI%29+Reports+Expiration+of+30-Day+%27Go-Shop%27+Period/6904777.html for the full story.
Marketwire  Oct 20  Comment 
MACAU -- (Marketwire) -- 10/20/11 -- Today, www.EquityMarketsInc.com announced its research report highlighting Human Genome Sciences (NASDAQ: HGSI) and Pharmaceutical Product Development, Inc. (NASDAQ: PPDI). Full content and research is available
Stock Blog Hub  Oct 11  Comment 
Pharmaceutical drug research company Pharmaceutical Product Development, Inc. (PPDI) recently announced that it has entered into an agreement to be acquired by privately held The Carlyle Group and Hellman & Friedman for $3.9 billion in...
Forbes  Oct 4  Comment 
With more drugmakers outsourcing more trials to contract research organizations, few should be surprised that the CRO sector is generating investor interest. The attention-grabbing deal announced this week in which two private equity firms -...
StreetInsider.com  Oct 3  Comment 
Eastman Kodak (NYSE: EK) 91% HIGHER; correcting today following a more than 50 percent plunge last Friday on bankruptcy fears. The company issued a statement late Friday saying it has "no intention to file for bankruptcy." PPD (Nasdaq: PPDI)...
StreetInsider.com  Oct 3  Comment 
Pharmaceutical Product Development, Inc. (Nasdaq: PPDI) today announced that it has entered into a definitive merger agreement under which it will be acquired by affiliates of The Carlyle Group and Hellman & Friedman in an all-cash transaction...




 

Pharmaceutical Product Development, Inc (NASDAQ: PPDI) is a global contract research organization (CRO).[1] A CRO serves as a middle-man who finds doctors, recruits patients, and compiles data. CROs are organizations that offer many different pharmaceutical research services to clients.[2]

PPD has offices in 33 countries and has partnerships with pharmaceutical, biotechnology, medical device, academic and government organizations.[3] The goal of PPD is to maximize the returns of its clients' and partners' research and development investments.[1]

PPD's development services include preclinical programs and Phase I through Phase IV clinical development services, as well as bioanalytical, cGMP, global central laboratory and vaccines and biologics laboratory services.

Company Overview

The use of CROs, such as PPD, is increasing as these kind of companies become more and more crucial to drug development. CROs help accelerate the time of development and project failure decisions and help increase approval success rates among outsourcing partnerships. [4]The company offers a range of services, from toxicology testing and biomarker discovery in the earliest phases of drug research, to the management of large, multi-site clinical trials, in which drug compounds are tested in humans. PPD is also developing some of its own compounds in partnership with other firms. Its customers include most of the world's 50 most prominent pharmaceutical companies. [5]

Business and Financial Metrics

Second Quarter 2010 Results[6]

During the second quarter, PPD recorded net revenue of $369.9 million, compared to $354.6 million for the second quarter of 2009. Second quarter 2010 operating income was $40.1 million, compared to $58.3 million for the same period in 2009. Operating income for the second quarter of 2010 was lower than the same period last year due primarily to operating and integration expenses related to PPD's recent acquisitions and an increase in business development expenses. Second quarter 2010 operating income was also impacted by increased compound partnering research and development expenses prior to the spin-off and general and administrative costs related to the spin-off. These costs will not continue since the spin-off was completed in mid-June.

Diluted earnings per share for the second quarter of 2010 were $0.18, compared to $0.49 for the second quarter of 2009. Second quarter 2009 diluted earnings per share included the after-tax gain on the sale of Piedmont Research Center of $0.16 per share. Second quarter 2010 diluted earnings per share included a charge for income taxes of $3.8 million, or $0.03 per share, related to the spin-off of PPD's compound partnering business and a loss from discontinued operations, net of taxes, of $2.6 million, or $0.02 per share, resulting from the closing of the company's dermatology business unit. The dermatology business unit was part of PPD's discovery sciences segment, and the financial results for this business unit have been reported in discontinued operations.

Business Segments[7]

Development Segment

PPD specializes in developing integrated product development that provide companies with interdisciplinary preclinical, chemistry, manufacturing and controls (CMC), medical, and regulatory road maps for the development of their products through global marketing approvals and the post-marketing life-cycle. Its 330+ bed Phase I clinic in Austin, Texas, is engaged in conducting first-in-man studies, cardiac safety monitoring and large, complex, procedure-intensive Phase I trials. Its Phase I unit also includes a dental surgical and research clinic to evaluate the safety and effectiveness of analgesic compounds in third molar extraction models.

With laboratory facilities in Highland Heights, Kentucky, Brussels, Belgium, Singapore and Beijing, China, PPD’s global laboratories provide standardized efficacy and safety testing services with customized results databases for pharmaceutical and biotechnology companies engaged in clinical drug development, as well as government-funded studies. The Company’s vaccines and biologics testing facility is involved in vaccine testing for influenza, Human Immunodeficiency Virus (HIV), adenovirus, haemophilus influenza type B, human papillomavirus, pneumococcus, staphylococcus, hepatitis A and B, measles, mumps and rubella, varicella zoster virus, rotavirus, as well as other viruses and bacteria.

The Company provides bioanalytical services through good laboratory practices (GLP)/FDA Guidance-compliant laboratories in Richmond, Virginia and Middleton, Wisconsin. Its bioanalytical laboratories analyze biological fluid samples from animal and human clinical studies. Its service offerings also include dedicated laboratory space to conduct immunologic Opsonophagocytic Assay (OPA) bioassays for the vaccine industry. The Company provides non-GLP early preclinical development services and product analysis laboratory services through its cGMP compliant laboratory located in Middleton, Wisconsin. Its product analysis services include inhalation, biopharmaceutics, dissolution, stability and microbiology studies.

Discovery Sciences Segment

Discovery Sciences segment focuses on the discovery research segment of the biopharmaceutical research and development outsourcing market. The Company’s two Phase II-ready therapeutic compounds are licensed from Janssen Pharmaceutica N.V. Through the acquisition of Magen, the Company acquired in-process research and development. At acquisition, the acquired in-process research and development was related to the MAG-131 compound, which was in the pre-IND phase of research.

Acquisitions

In May 2009, the Company completed its disposition of its wholly owned subsidiary Piedmont Research Center, LLC. In December 2009, the Company completed its disposition of its wholly owned subsidiary PPD Biomarker Discovery Sciences, LLC. On April 2, 2009, the Company acquired Magen BioSciences, Inc. On April 21, 2009, the Company acquired AbC.R.O., Inc. On November 6, 2009, the Company acquired Excel PharmaStudies, Inc.

Trends and Forces

Costs of Research and Development for Biopharmaceutical Companies is Increasing, Accelerating Growth in the Outsourcing Market

New drug development costs have risen from $0.8 billion (1997) to an expected $1.9 billion (2013).[4] The average total research and development costs for new drugs in the late 1990s was more than double the cost in the 1980s and more than 5 times the cost in the 1970s. This increase in cost is driven by steep increases in costs for clinical testing - the number of experimental subjects and the complexity of the clinical trials have both increased.[8] These increases in costs are driving companies to switch to outsourcing for drug development (CROs). Companies are finding that outsourcing ends up saving them large amounts of time and money. [4] The CRO market is expected to grow at an annual rate of 14-16% per year[9], giving PPD much potential to grow.

Move to More Global Clinical Trials Lets Large CROs Increase Market Share

A record number of clinical trials are being done with Investigational New Drugs (INDs) than before.[9] The United States Food and Drug Administration (FDA) investigational new drug program is the means by which pharmaceutical companies obtain permission to ship experimental drugs across state lines.[10] The desire for more global clinical trials is helping large CROs seize market share from smaller companies.[9]

Increase in Potential New Drug Candidates Pushes Companies Toward Using CROs

Over the past 5 years, the number of drug compounds in different stages of development has increased steadily. Since many biotechnology and pharmaceutical companies do not have sufficient resources to pursue development for all of these upcoming drugs, they are looking to drug discovery and development outsourcing companies (CROs) to reduce cost. [11]

Competition

PPD is one of the largest CROs and so competes with major and national CROs. Among these, the most important include:

References

  1. 1.0 1.1 PPDI 2008 10-K, Item 1: Business Overview, page 1
  2. Wikipedia: Contract research organization
  3. Pharmaceutical Product Development, Inc. Website
  4. 4.0 4.1 4.2 Wai Lang Chu."CRO's drug R&D contributions have never been more significant"
  5. Hoovers profile: Pharmaceutical Product Development, Inc.
  6. PPDI: "PPD Reports Second Quarter 2010 Financial Results" July 27, 2010
  7. Reuters Profile: PPD
  8. Mark Moran. "Cost of Bringing New Drugs To Market Rising Rapidly"
  9. 9.0 9.1 9.2 "The CRO Market Outlook" - Business Insights
  10. Wikipedia: Investigational new drug
  11. PPDI 2008 10-L, Item 1: Business Overview, page 4
  12. Wikipedia: Covance
  13. PAREXEL - Case Studies
  14. Reuters: Charles River Labs, Inc.



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