Canadian life sciences company MDS Inc continues its efforts to turn around its beleaguered MDS Pharma Services unit, announcing an expansion of the contract research organisation’s (CRO) development and regulatory services in Europe.

The US-based unit will now offer full-service Development & Regulatory Services (DRS) consulting to its European clients. The European DRS organisation will also be fully integrated with consultants in the US and Canada to provide product development, programme management and regulatory affairs services for new drugs and biopharmaceutical products.

“This expansion in Europe will greatly broaden our consulting capabilities in development and regulatory services,” said MDS Pharma Services president David Spaight. “We will now be able to provide expertise to support our biotechnology and Asian pharmaceutical clients in the process of commercialising their products in North American and European markets.”

The CRO has made two key appointments to support the European initiative. Dr Didier Saur will head up MDS Pharma Services product development consulting, programme management and regulatory affairs services for drugs and biopharmaceutical products in Europe as vice-president of medical affairs, based in Sèvres, France. Dr Saur, a specialist in cardiovascular and metabolic disorders with more than 20 years’ experience as a doctor in the pharmaceutical and contract research industries, will also be responsible for organising and chairing the DRS organisation’s Medical Advisory Board.

Dr Sarah Roberts has been named senior director of regulatory affairs. Based in Winnersh, UK, she will provide expert regulatory affairs consulting for clients on European regulatory issues. An oncology research specialist, Dr Roberts has worked with the Dana Farber Institute in Boston, US and the Gray Cancer Institute in London, UK. She was most recently director of Smart Regulatory Solutions Ltd, an independent consulting firm established by Dr Roberts.

US$61 million provision

MDS is still suffering the fall-out from problems in the US with bioequivalence studies performed by MDS Pharma Services at its Canadian facilities in St. Laurent and Blainville, Quebec. Early this year the Food and Drug Administration (FDA) asked a number of MDS clients to re-evaluate pharmacokinetic studies conducted by the company for approved or pending branded and generic medicines.

MDS Pharma Services took a US$61 million provision in the second quarter to cover the costs of reimbursing clients for audit and other expenses related to the FDA review. The CRO also recorded restructuring charges of US$26 million for profit improvement initiatives and a loss of US$4 million for the sale of a Phase I facility in Hamburg.

The moves to streamline the MDS Pharma Services business include consolidating its North American bioanalytical LCMS operations at the MDS site in Lincoln, US and refocusing the Montreal site on early clinical research, ligand-binding services, development and regulatory services, and global clinical development.

These measures pushed the operating loss for MDS Pharma Services up to US$97 million in the second quarter, compared with a US45 million loss in the same period of 2006. Net revenues rose by 2% to US$115 million, with a 22% increase in late-stage revenues diluted by the continuing problems at the Montreal-area bioanalytical business. Early-stage revenues at MDS Pharmaceutical Services dropped by 12% in the quarter to US$60 million.

Reporting on progress with the FDA review in early June, MDS said its bioanalytical clients had completed around 70% of the independent audits required by the US agency. The expectation is that all of the FDA audits will be “substantially complete” by the end of fiscal 2007.