PPD sees Op income and revs climb in Q3; signs new collaborations

By Gareth Macdonald

- Last updated on GMT

Related tags: Contract research organisation, Contract research organization, Clinical trial, Pharmaceutical industry

PPD signs clinical imaging and formulation development collaborations, reorganises reporting units and cites “improved performance in emerging markets” and spending controls as key to third quarter gains.

First up, the financials. The US contract research organisation’s (CRO) operating income for the three months ended September 30 grew 10 per cent to $51.6m with revenue for the quarter increasing some 7.3 per cent to $365m.

PPD's clinical development services division brought in some $260m, up around $10m on the year earlier period while its Laboratory services unit, formerly structured as its discovery and development segment, contributed $79m, up from $65m in Q3 2009.

The results mark something of a turnaround for the CRO, which saw operating income fall in both the first​ and second​ quarter of 2010 due to integration costs for businesses acquired earlier in the year and higher corporate spending.

PPD will hold a webcast to discuss its quarterly performance later today, however, in a press statement CEO David Grange said: “Gross authorizations continued to be strong, and operating margin expanded significantly … due to improved performance in emerging markets and our focus on overall company spending​.”

This was echoed by PPD chairman Fred Eshelman, who said that pharmaceutical industry demand for clinical development and laboratory testing services continued to be strong.

New deals

Eshelman’s prediction of continued strong drug sector demand fits with new business collaborations, with Bend Research and VirtualScopics, which PPD announced this week as important additions to its offering.

The VirtualScopics partnership establishes a set of clinical trial imaging services that, PPD said, will help customers make “more confident decisions on the development of their oncology compounds, creating time and cost efficiencies​.”

The collaboration, which is based on VirtualScopics’ range of MRI, PET and CT software, is in keeping with similar deals signed by peers like Covance​ and Parexel’s Perceptive Informatics​ unit in recent months and further underlines the CRO sector's focus in this area.

It is also the second partnership that VirtualScopics has announced in as many months, after its September​ deal with Dresden, Germany-based contract research organisation, ABX-CRO.

The collaboration with Bend is, in contrast, designed to bolster PPD’s development and analytical testing offering with the addition of formulation and particle engineering capabilities.

And, while PPD was not able to respond to Outsoucing-pharma’s request for more details ahead of publication, it is understood that a key focus of the partnership will be on the development of inhalation formulations.

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