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

By Gareth Macdonald

- Last updated on GMT

Related tags Contract research organisation Contract research organization

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.

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