PPD’s Q2 project cancellations just shy of “unprecedented” Q1 levels

21-Jul-2009 - Last updated on 22-Jul-2009 at 12:11 GMT

PPD's woes have continued in the second quarter with revenue from its development segment down nearly 11 per cent to $330.2m (€232.5m).

Contract cancellations for the period were $212.9m, just shy of the “unprecedented” $215m worth of cancelled projects PPD reported at its last financial presentation in April.

One area of success was the firm’s discovery sciences operations, which saw revenue double to around $800,000 largely due to royalties from the sale of Priligy (dapoxetine) in Europe by Janssen-Cilag.

Also on the positive side for PPD, the sale of its Piedmont Research Center in April brought in just over $19m, equivalent to $0.16 per share after tax.

Overall however, Q2 was difficult for the US contract research organisation (CRO) compared with last year. Operating income from continuing operations was $38.6m, or 33 cents per share, down 20 per cent on the equivalent period in 2008.

Net revenue for the period was also down, falling around 12 per cent to $355.2m, although this was ahead of the $334.3m consensus estimate of analysts polled by Thomson Reuters.

PPD's CEO, David Grange, was upbeat about the firm’s performance explaining that “we remain very optimistic about the long-term prospects for the CRO industry as a whole [and] continue to believe we are particularly well positioned.”

This optimism was echoed by executive chairman Fred Eshelman who said: "With the start of Priligy royalties and the advancement of the development programs for alogliptin and our dermatology portfolio, we remain confident that our compound partnering efforts will generate long-term, sustainable growth."

PPD is due to hold a live conference call later today to discuss its latest results.