PDI saw its sales drop to $27.8m (€20.3m) from $55.0m; while an operating loss of $3.9m and a pre-tax loss of $2.5m were recorded, as opposed to the firm previously making a small profit, in the comparable 2006 period.
The CSO has reported losses for a series of quarters now as it has struggled to overcome a number of key contract losses - in March one of PDI's major client has said it would be discontinuing its $35m contract sales deal with the firm; last October GlaxoSmithKline (GSK) told PDI that it would not be renewing its sales contract with the firm, signalling a devastating $65m-$70m loss in annual revenue; and prior to this AstraZeneca had already pulled the plug on a long-running service contract with the firm, which at the time was PDI's biggest client, and along with GSK and Sanofi-Aventis, accounted for 50-60 per cent of the company's revenue.
Contract woes were cited by PDI as the root cause of its disappointing second quarter results: lower revenue and profit losses were "primarily attributable to the winding down of certain significant contracts…", said company CEO Michael Marquard.
"In the second quarter, we continued our efforts to rebuild our business… however, we have not yet replaced all of the lost revenue to date".
On the positive side, Marquard pointed to the company's recent win of a one year sales services contract worth $23m with a top-five pharmaceutical company; and a one year $13m contract with a top-ten pharma firm for its Select Access, one of its diversified sales and marketing service divisions.
Recognising the need for serious damage control, the firm last year appointed a new CEO and CFO and said it was strengthening its business development and marketing efforts, part of which involved a five year plan for growth, with four key areas of focus, including decision support services (market research and market analysis); scientific support services (medical communications; marketing support services (teleconferencing and web-based conferencing); and sales support services (regional/seasonal or new approaches to sales).
"Following a slow start in the first quarter of this year, sales improved considerably during the second quarter in the three businesses that comprise our diversified marketing services segment…supported in part by new product offerings…", said Marquard.
"As a consequence of the new contracts, along with continued cost reduction efforts, the company now expects its cash burn from operations for the year to be reduced to $10m, compared with the $12m to $15m estimate previously provided".