For the period March 31, the US contract research organisation (CRO) saw operating income drop 66 per cent on the comparable period in 2009 to $26m (€19.4m) while total revenue fell 4.6 per cent to just under $347m.
Development services recorded revenue of $324m, down 3 per cent, while discovery sciences saw sales drop to $300,000 from $5.2m in the first three months of 2009 in which PPD received payments following approval of Janssen-Cilag’s Priligy.
Other factors affecting performance in the period included costs associated with the integration of recent acquisitions Excel PharmaStudies and BioDuro as well as those related to its soon to be spun off compound partnering business.
But, despite the financials, CEO David Grange was positive about PPD’s performance so far in 2010 explaining that: “During the first quarter, request for proposal activity improved, cancellations and adjustments decreased to a normal level.”
This normalisation is good news for PPD given that, like many of its peers in the early-stage research sector, the firm repeatedly cited “unprecedented cancellations levels” as a major negative factor in its performance last year.
Grange also said that the CRO has seen “a 30 percent sequential increase in gross authorizations for the first quarter of 2010,” suggesting that demand for contract drug research is genuinely starting to recover.
Company executive chairman Fred Eschelman, for PPD CEO, was also upbeat about PPD’s first quarter, citing progress made in its global expansion strategy as a significant positive.
“We continued to advance our global laboratory strategy in the quarter with the opening of a cGMP laboratory in Ireland and the launch of our new Vaccines and Biologics Center of Excellence in Pennsylvania.”
China vaccine lab
In other news, PPD announced the opening of a vaccine research centre in Taizhou, China which it said would provide local and international sponsors with development services.
And, although Charles River Laboratory’s acquisition of Wuxi makes the new unit the second biggest story affecting China’s CRO sector this week, the potential of the country’s vaccine market should not be underestimated according to PPD.
Company VP of clinical development in Asia Pacific Simon Britton said: "The vaccines market is one of the fastest growing segments in the industry, and in China the clinical trial market is growing at about 20 percent each year.
"Our strong expertise in vaccine clinical research and large presence in China make us well positioned to help our clients ensure adherence to global standards while addressing unique requirements for monitoring vaccine studies."