Caprion, which has provided biomarker discovery and validation services to the drug industry since 2002, said the acquisition had strengthened its market position and broadened its client portfolio and revenue base.
CEO Martin LeBlanc stressed that a key motivation for the deal was “the growing biomarker needs” of Caprion’s clients, which is an observation also cited by Covance, Icon, Quintiles and WuXi AppTec who have all recently invested in biomarkers.
The prevailing wisdom is that demand for biomarker analysis in discovery has increased in line with efforts to reduce attrition rates for early-stage because the approach means that only the most promising candidates are selected.
All of which makes sale of the Menlo Park, California biomarker unit seem like a counterintuitive move for PPD, particularly at a time when, biomarkers aside, demand for early-stage development is yet to fully recover after the economic downturn.
However, the move does make sense in the context of PPD business as a whole, given that discovery sciences is the smallest part of its business, generating just $1.1m of the $426.6m it reported in its most recently reported quarter.
It also fits with plans to spin off its compound partnering division, which is on track to take place in the first half of the year, and acquisition of Chinese CRO Exel PharmaStudies as a way of strengthening its Phase II-IV operations.
Guidance disappoints
Business strategy was also a key topic for PPD when it issued its 2010 guidance last week. The CRO predicted that net revenue for the year will be in the $1.3bn to $1.43bn range, on earning per share of between $1.00 and $1.12.
CEO David Grange stressed “strengthening our business models, establishing innovative partnerships and enhancing our global capacity” as key goals for the year but did not go into any details.
He also said that: “We have entered 2010 with clear objectives to restore growth in our business and to create long-term value for our shareholders.”
Despite Grange’s optimism, PPD’s share price was down 6.5 per cent in after hours trading the day it made the announcement as investors responded to the lower-than-expected earnings guidance.