Pharmaceutical Product Development Inc. (PPDI) recently announced that it has been awarded a multi-year contract by the US Army to support biodefense and vaccine development programs. The contract covers a five-year period from April 15, 2011, with a ceiling value of $45.5 million. It will be an indefinite delivery, indefinite quantity (IDIQ) contract.
Under the US Army Medical Research Acquisition Activity: Regulatory Affairs & Compliance Support, PPD will provide global regulatory and biostatistics services to assist the army in advancing its various drug development programs including vaccine development aimed at protecting military personnel. PPD will also help the US army in preparing and filing regulatory applications with the US Food and Drug Administration (FDA) and other regulatory authorities worldwide. PPD will also provide statistical consulting, study design and statistical analysis support services.
PPD has been providing clinical support services to the US government for the last 21 years with collaborations in more than 900 government and public health drug development projects in its kitty.
Our Recommendation
We currently have a Neutral recommendation on PPD. PPD is a leading contract research organization (CRO) providing drug discovery and development services to pharmaceutical and biotechnology companies.
We are impressed by the company’s strong bookings, stable backlog duration, sound expense control and improving margins.
Companies like PPD and Charles River Laboratories (CRL) suffered in 2008-2009 due to a decline in demand for their services due to the depressed economic environment. The environment for CROs is gradually improving. The improving request-for-proposals (RFP) flows and key strategic partnerships secured by PPD with bio-pharma customers are testament to a revival, which would in its turn result in bottom-line growth. We, however, prefer to remain on the sidelines until visibility improves on the impact of the changing environment on CROs.
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