harmaNet Development Group, the US-based contract research organisation (CRO) whose run of financial problems culminated earlier this year with an agreement to merge with affiliates of private equity firm JLL Partners, says it is now out of the woods and looking to the future.
“With our financial challenges behind us, clients can be assured PharmaNet Development Group is in a strong position for long-term growth,” said president and chief executive officer Jeffrey McMullen.
Notably, PharmaNet has completely paid off its Convertible Senior Notes due in 2024 and has obtained a credit line that can be used for general corporate purposes.
“The combination of our financial restructuring, business process improvements and solid operating performance has resulted in a healthy backlog of new business and renewed optimism,” McMullen commented.
PharmaNet announced last December that it was working with its financial adviser “to pursue strategic alternatives, including the potential sale of the Company and the exploration of alternatives to retire the Company’s convertible notes”.
The CRO had cut its 2008 financial guidance for the second time last September, blaming largely the cancellation or postponement of clinical development projects in its crucial late-stage segment and a lower than expected sample volume of early-stage business.
Under the merger agreement subsequently announced in February, which valued PharmaNet’s common stock at around US$100 million, JLL made a US$250 million equity commitment that included the necessary funds to settle the US$144 million principal amount of the CRO’s outstanding convertible notes.
PharmaNet has also made further moves to beef up its presence in the Asia Pacific region. A recently opened office in Manila, the Philippines extends an existing network that takes in two offices in India, two in China, offices in South Korea, Singapore and Taiwan, and field-based staff in Australia, Malaysia and Thailand.
The CRO plans to expand its Singapore office next year and says it continues to invest in personnel and other strategic assets.