(RTTNews) - Tuesday, PPD Inc. (PPDI: News ) announced that its board has authorized management to proceed with preparations to spin off its compound partnering business from its core contract research organization business. PPD expects the transaction to be completed in the middle of 2010. Approval by PPD's shareholders is not required for completion of the spin-off.

The contract research organization, or CRO, business will continue to operate under the PPD name and will be focused solely on its drug discovery and development service businesses and will no longer be coupled with the earnings dilution from the company's compound partnering business.

Fred Eshelman, executive chairman said,"Each company will have the opportunity to focus exclusively on its core strengths, seek new strategic opportunities and compete more effectively in its respective market."

The compound partnering company resulting from the spin-off is expected to have the rights to royalties and sales-based milestones from the company's collaboration with ALZA Corp., a Janssen-Cilag affiliate, on Priligy, the first and only approved treatment for premature ejaculation, which has been approved for marketing in Sweden, Finland, Portugal, Spain, Austria, Germany, Italy, Mexico and South Korea.

PPD said that the company will also have rights to potential future regulatory and sales-based milestones and the statin compound licensed from Ranbaxy Laboratories Ltd. for the treatment of dyslipidemia.
PPD also announced it has entered into an agreement to acquire Excel PharmaStudies, Inc. After the acquisition closes, Excel's more than 300 employees will join PPD, and Mark Engel, co-founder, will work exclusively with PPD as a strategic consultant. The acquisition is subject to various closing conditions and is expected to close in the fourth quarter of 2009.

In addition, the company announced it has signed an agreement to invest $100 million in Celtic Therapeutics Holdings L.P., an investment partnership organized for the purpose of identifying, acquiring and investing in a diversified portfolio of 10 to 15 novel therapeutic product candidates.

Further, PPD announced it has been awarded a contract by the U.S. Food and Drug Administration to evaluate the agency's Center for Drug Evaluation and Research post-market spontaneous adverse event surveillance system.

The award of $2.7 million for year one, is part of a two-year project of FDA's Initiative for Maximizing the Benefit of Passive Adverse Event Collection throughout a Product's Life Cycle. Under the contract, PPD will comprehensively evaluate this FDA public health surveillance system.

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