US-based contract research organisation PPD, Inc has narrowed its guidance for revenues and earnings per share in 2007, after already lowering the guidance last July as R&D costs accelerated and new business authorisations fell short of target.
However, the company is a good deal more bullish about 2008, when milestone payments from a compound development partnership with Japan’s Takeda Pharmaceutical Company Limited are expected to help push net revenues up by 20% compared with the revised forecast for last year.
PPD now expects net revenue, which excludes reimbursed out of-pocket costs, to be in the range of $1,295 million to $1,310 million for 2007. The guidance given at the second-quarter stage was $1,290 million to $1,340 million, although the new forecast is roughly in line with analysts’ expectations.
The same goes for earnings per diluted share (EPS), which PPD has updated to $0.33 to $0.35 for the fourth quarter of 2007 and $1.36 to $1.38 for the full year. The previous EPS guidance for 2007 was $1.35 to $1.39.
A significant factor in boosting guidance for 2008 has been the prospect of $40 million in milestone payments for the discovery sciences segment from its collaboration with Takeda on alogliptin (SYR-322), a DPP-4 inhibitor for the treatment of type-2 diabetes. The Japanese company recently filed a new drug application with the US Food and Drug Administration (FDA) for the compound.
If the FDA accepts the submission, which PPD expects it to do during the first quarter of 2008, this will trigger a $15.0 million milestone payment to the CRO. A further $25.0 million milestone payment is due if the FDA approves alogliptin, which PPD is forecasting for the fourth quarter of 2008.
Accordingly, the CRO is projecting net revenues of US$60-65 million for its discovery sciences segment in 2008, compared with revised guidance of $20 million for 2007. In the core development segment, net revenues are expected to reach $1,475 million to $1,525 million in 2008, against revised guidance of $1,275 million to $1,290 million for 2007. Total revenues for PPD in the current year are projected at $1,535 to $1,590 million and EPS at $1.64 to $1.72.
Going global
PPD also continues its efforts to internationalise its Phase II-IV clinical trial services. The company has announced a further appointment to head up one of the regional territories it created last year following criticism from analysts that the CRO was not doing enough to capitalise on the trend for shifting clinical trials to emerging and other non-US markets.
Dr Sebastian Pacios was named as PPD’s senior vice-president of clinical operations for Europe, Middle East and Africa. He was previously vice-president responsible for clinical research and project management in Europe, Africa and Asia Pacific at PRA International, and before that was co-director of Staticon International Espana, a Madrid, Spain-based CRO acquired by PRA in April 2002.
