PDI’s losses mount in Q1
Despite the slashing of pharma’s in-house sales teams, which could provide opportunities for contract sales providers, PDI has struggled in recent quarters and posted a $5.6m (€4.1m) operating loss in Q1.
This compares with a $1.7m operating loss in Q1 2008 but Nancy Lurker, CEO of PDI, believes the industry is still adapting to the new business environment. Lurker said that this will lead to increased outsourcing and noted that PDI was winning contracts from “companies that have not traditionally turned to outsourced sales in the past”.
She added: “We believe that PDI is now becoming better positioned to benefit from the increased outsourcing that we are seeing as evidenced both by requests for proposals and our own proactive discussions.
“We expect this trend will continue over the coming years, as pharmaceutical companies address the new realities of the business environment and show greater willingness to adapt to new commercial models.”
However, Lurker acknowledged that new opportunities are for “smaller, more flexible sales forces” than PDI has traditionally supplied.
Preparing for the future
PDI’s revenues fell by $8.7m to £23.5m in Q1 as new business and expansions on existing contracts were outweighed by the internalisation of a long-term client’s sales team and other contract terminations and expirations.
Despite this PDI believes that the measures it has taken in recent quarters will ensure that it is capable of prospering when the market improves.
These measures include “aggressive cost-containment activities” but operating expenses rose by one per cent in Q1, which PDI attributed to termination costs related to cutbacks in non-sales force personnel and expenditure on improving the company’s core capabilities.
