Pharmaceutical Product Development, Inc. recently announced the appointment of Mr. Raymond Hill as its new Chief Executive Officer (CEO) and also a member of the Board of Directors effective from September 16. Raymond Hill was the president of IMS Consulting Group at IMS Health Inc. Prior to joining IMS Health, Mr. Hill served as a senior vice president for Acumen Sciences Limited.
PPD also recently announced expansion of its clinical microbiology laboratory globally to strengthen its laboratory services in infectious diseases to meet growing client demand. With the expansion, PPD can offer a full range of microbiology testing services such as bacteriology, mycobacteriology and testing of microbioterrorism pathogens.
We currently have a Hold recommendation on PPD. The company retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are impressed by the company’s strong bookings, stable backlog duration and sound expense control.
PPD is a leading contract research organization (CRO) providing drug discovery and development services to pharmaceutical and biotechnology companies. Companies like PPD and Charles River Laboratories suffered in 2008-2009 due to a decline in demand for their services in time of a depressed economy.
The environment for CROs is gradually improving. The improving RFP flows and key strategic partnerships secured by PPD with bio-pharma customers are a testament to such a revival, which would in its turn result in bottom-line growth. However, we remain concerned about the high cancellation rates.