Good news follows bad news for InVentiv
Inyx collapse, Inventiv Health had good news this week when it
reported its third quarter results.
InVentiv Health reported record sales across all its business segments to achieve a total revenue of $212.7m (€145.4), a 30 per cent improvement year-over-year. Pre-tax profit and operating profit regained a healthy glow after a suffering a significant blow during the second quarter. The good news comes only two weeks after the contract sales organisation (CSO) was forced to announce the cancellation of a key sales contract with a major pharma player, Novartis, who dropped the firm as part of a company-wide axe-wielding campaign. InVentiv had been providing 510 sales representatives to Novartis under a multi-year contract entered into between the two firms in August 2006. The company would not confirm what percentage of sales the Novartis contract accounted for, although it did say that no one client represented more than 10 per cent of the its revenue. The sales contract was earmarked for termination during the fourth quarter. InVentiv said it was "in talks" with other pharma firms in a bid to sign a new sales contract and redeploy some of the Novartis team, although it is unknown how the firm is progressing in this endeavour. Meanwhile, the company has made a recovery in the third quarter from the previous quarter when the bankruptcy of its client Exaeris was largely responsible for taking a chunk out of its earnings. Exaeris was a small subsidiary of specialty pharma contract manufacturer Inyx Inc. which is locked in a bitter legal battle with its principal financier over alleged defaults on loan payments.The entire UK operations of Inyx Inc. were forced into administration earlier this year and Inyx Inc. subsequently placed its US subsidiaries, Inyx USA and Exaeris under Chapter 11 bankruptcy protection. As a result of this, InVentiv reported a 36 per cent decrease in pre-tax profit and a 26 per cent decrease in operating profit during its second quarter after setting aside $8.2m because of unpaid bills that it was unlikely to ever receive from Exaeris, as well as in response to the identification of another unidentified pharma client that was deemed a "similar financial risk" after the Exaris bankruptcy prompted the firm to review its other accounts receivables. InVentiv was the exclusive provider of Exaeris' sales and marketing services and has since taken the firm to court in an attempt to recover some of the cash it says it is owed for past services rendered. According court documents, InVentiv continued to provide services to the firm even when it was under Chapter 11, on the premise that it would still be paid in full on a week by week basis. The documents state that this was a stipulation made between the two firms, however, on numerous occasions the company failed to pay as promised. The present status of the trial is unknown.