PDI faces another major contract loss from GSK
PDI that it will not renew its sales contract with the firm at the
end of the year, signalling a devastating $65m-$70m loss in annual
revenue for the struggling firm.
The one-year contract was an extension of an existing contract inititated with GSK in July 2003 and provided the drug giant with around 600 drug reps. PDI has been providing outsourcing services for GSK for over 10 years.
CEO of PDI Michael Marquard expressed his disappointment with the decision and stated: "Our immediate priority is to develop other opportunities to redeploy our employees who comprise this sales team."
The troubled firm has experienced a steady decline in revenue over the past couple of years, partly due to its over-reliance on a few key customers and its lack of focus on trying to diversify and expand its client base and business mix.
PDI reached a particular low point earlier this year when AstraZeneca pulled the plug on a long-running service contract with the firm. At the time AstraZeneca was PDI's biggest client, and along with GSK and Sanofi-Aventis, accounted for 50-60 per cent of the company's revenue.
The loss of the GSK contract will therefore strike a huge blow to PDI, who only a few months ago was just beginning to show signs of regaining stability with the appointment of a new CEO and CFO and strengthened business development and marketing efforts, resulting in the signing of a new agreement to provide contract sales services for a major, undisclosed pharmaceutical company in a deal expected to reap in $35-$40m in revenue over its one-year term.
