PPD hits $1bn mark in 2005

The company has now joined rivals such as Quintiles and Covance to be amongst the few contract research organisations (CROs) with revenues in excess of $1bn.

The results were buoyed by a strong performance in the company's development segment, reporting a 21.4 per cent increase in net revenue to $921.8m for the full year of 2005.

PPD's discovery sciences segment also lifted its game in 2005, nearly tripling its net revenue of $14.3m in 2004 to $40.2m in 2005, while at the same time achieving an income from operations of $6.4m, compared to a loss from operations of $12.5m in 2004.

This positive result was boosted primarily through a $10m milestone payment related to the filing of the dapoxetine new drug application (NDA) and a $15m upfront payment for the transfer of the development and commercialisation rights for the DPP4 program to Takeda San Diego. It also included a $5m payment from ALZA Corporation related to dapoxetine.

On the whole, the pharma outsourcing trend is continuing to grow at a rate beyond that of R&D spending and as a result, 2005 was a strong growth year for most contract research organisations, out performing many analyst expectations.

"Many analysts predicted the outsourcing sector would grow around 15 per cent last year, however, PPD has had a string of quarters in a row with 20 per cent growth rate,"​ Steve Smith, PPD told Outsourcing-Pharma.com.​

In addition, the percentage of customers from the biotech sector grew for most CROs in 2005, due to strong early drug development activity, fuelled by the biotech boom.

"With significant backlog and the initiation of the Phase III program for Takeda's investigational compound SYR-322, PPD is positioned to continue its solid growth in 2006,"​ said Fred Eshelman, chief executive officer of PPD.

PPD is now forecasting 18 per cent revenue growth for 2006, with revenues predicted to be between $1.125bn and $1.140bn.